In New South Wales case law, ‘stultify’ (or ‘stultification’) describes a situation where a court order, typically an order for security for costs, effectively prevents or hampers a party, often an impecunious plaintiff, from pursuing their legal rights. The principle states that courts should not issue orders that make it impossible to continue legitimate proceedings, thereby “stultifying” them.
Stultification is distinct from related doctrines such as abuse of process. While abuse of process concerns the misuse of court procedures to achieve unjust or improper outcomes, stultification concerns orders that unintentionally prevent a party from accessing justice at all. Unlike the broader doctrines of case management or the striking out of frivolous claims, stultification specifically addresses whether compliance with an order would render a claim or defence incapable of a proper hearing.
A distinction that highlights the unique role of stultification in ensuring fair access to justice, particularly when financial barriers could prevent genuine claims from being adjudicated.
Key aspects of “stultify” in NSW case law include:
Security for Costs Application: When dealing with applications for security for costs, the party opposing the order must demonstrate that granting security would stultify the proceedings. The party must show that compliance would render them unable to continue with the case.
Impecuniosity: The concept of impecuniosity is central to many arguments about stultification. Though a plaintiff’s poverty does not bar them from litigating, if an order for security for costs prevents an impecunious plaintiff from proceeding, it may be considered to “stultify” the case.
Balancing Exercise: Courts engage in a thorough balancing exercise when considering whether to order security for costs. This process weighs the injustice to a plaintiff who may be forced to abandon a legitimate claim if required to post security, against the injustice to a defendant who, if successful, may be unable to recover their legal costs. Courts typically consider several main factors during this balancing exercise:
• The plaintiff’s financial position and capacity to provide security.
• The bona fides and merits of the claim, including whether the claim is advanced in good faith and is not plainly unmeritorious.
• Whether the order for security would realistically stultify or prevent the plaintiff from continuing the proceedings, rather than simply making it more difficult.
• The conduct of both parties, including any delay in seeking security or conduct which may have caused or contributed to the plaintiff’s impecuniosity.
• The quantum of security sought and whether it is proportionate.
• The stage of proceedings, including whether the action is at an early or advanced stage.
• Public interest considerations, for instance, if the case involves significant rights or matters of public importance.
• The prospects of recovering costs if security is not ordered.
For example, in Precise Training Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 1202, the Court assessed the plaintiffs’ genuine inability to provide security against the likelihood that the proceedings would not be abandoned and found that security would not have stultified access to justice. Similarly, in Waters v Frank; Frank v Waters [2025] NSWSC 1389, the Court considered the appellant’s evidence of limited financial resources and determined that requiring significant security would prevent the appeal from proceeding, and declined an onerous security order.
Litigation Funders: Their involvement often brings the issue of stultification to the forefront. The concept of stultification is relevant when deciding whether to make an order against a plaintiff with limited or underfunded resources.
In Precise Training Pty Ltd v Chief Commissioner of State Revenue [2020] NSWSC 1202, the NSW Supreme Court considered an application for security for costs against the plaintiff company in the context of a tax dispute. The Court closely examined the plaintiff’s financial position, the nature of the dispute, and the fact that the proceedings were largely defensive. In its reasoning, the Court weighed whether ordering security would stultify the proceedings by effectively preventing the plaintiff from continuing its claim.
The Court found that, despite financial difficulties, the plaintiffs were more likely to secure the necessary funds to comply with the order rather than abandon the case altogether. As a result, the Court decided that ordering security for costs in this instance would not stultify the plaintiffs’ access to justice and accordingly ordered it. This case demonstrates how the principle of stultification is applied: the Court requires evidence that an order for security would actually prevent the proceedings from proceeding before declining to make such an order.
Eastmark Holdings Pty Limited v Kabraji [2012] NSWSC 802 demonstrates the application of the stultification principle in a real-world context. This case involved a Supreme Court application to strike out a dispute over nine North Sydney apartments, where Eastmark claimed that the owners’ corporation’s executive committee breached fiduciary duties.
The 2012 decision, frequently referenced in procedural fairness cases, emphasised that summary dismissal is unsuitable when factual disputes are present, even if the claim has little chance of success. It also cites multiple authorities about the Court’s discretion to require security for costs and the potential to hinder legal proceedings.
In Carre v Owners Corporation – SP 53020 [2003] NSWSC 397, the case involved defective air-conditioning units in a strata scheme, where some components were within a lot and others on common property. The plaintiff, Ms Carre, sought to sue the developer over these defects. However, since the developer owned 75% of the other lots and exercised its voting power to block the owners’ corporation from joining the suit, Barrett J ruled that the Supreme Court has equitable jurisdiction to allow a lot owner to pursue a claim on behalf of the owners’ corporation.
Often called the “justice exception” to the proper plaintiff rule established in Foss v Harbottle (1843), where the company itself, as a separate legal entity, is the proper plaintiff for wrongs done to it, not individual shareholders. The Court further held that it should not make an order if it would hinder the proceedings.
Redland City Council v Kozik [2024] HCA 7: The High Court of Australia examined whether a restitution claim would undermine a statutory scheme, or create inconsistencies, and whether enforcing an unlawful contract designed to protect a specific class and contravene the law’s intent.
The High Court considered two issues were considered: whether regulations under the Local Government Act 2009 (Qld) permitted the respondents to recover “special charges” paid to Redland City Council when those charges were levied under invalid resolutions; and whether the Council could defend a restitution claim by showing the money was used for beneficial works. The respondents owned land near waterways in Redland, and between July 2011 and July 2017, the Council levied special charges to fund mandated works, such as dredging and maintenance.
After discovering the resolutions were invalid, the Council refunded unspent amounts but kept the funds used for works. The respondents sued in the Supreme Court of Queensland for repayment, claiming the spent charges were recoverable as money had and received and under regulations requiring the refund of wrongly levied charges.
The primary judge ruled that the Council must refund. Still, the Court of Appeal held that the Council was liable in restitution at common law for a mistake of law, rejecting the good consideration defence. The High Court dismissed the respondents’ cross-appeal, stating they couldn’t recover as a statutory debt because the regulations didn’t apply without valid resolutions.
The High Court also dismissed the Council’s appeal, ruling the respondents were entitled to restitution for money paid by mistake, and rejecting the good consideration defence because the works were statutory obligations, the respondents did not benefit, and allowing this would undermine the Act.
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498: The High Court of Australia dismissed five appeals from the Court of Appeal of the Supreme Court of Victoria, which had held that Ian Alexander Haxton, Robert Samuel Bassat, and Cunningham’s Warehouse Sales Pty Ltd (“the respondents”) were not liable to repay funds advanced under loans held by Equuscorp Pty Ltd (“Equuscorp”) highlighting that legal remedies should be denied if they lead to “incoherence” or “self-stultification of the law,” where a court order contradicts an overriding legal prohibition.
Although Equuscorp was not a party to the earliest loan agreements with the respondents, it was assigned to these agreements as an arm’s-length financier. In this context, ‘self-stultification of the law’ refers to the idea that courts should not make orders or grant remedies that would defeat or undermine the fundamental legal principles or policies established by statute.
A concept aligning with the broader stultification principle by illustrating how courts are careful to avoid outcomes—whether procedural or substantive—that render the exercise of legal rights meaningless or impossible. Just as procedural stultification prevents a party from accessing the Court due to an unjust order for security for costs, doctrinal or legal ‘self-stultification’ prevents the law from contradicting itself by enforcing rights or remedies that are prohibited by core legal rules.
Both forms of stultification serve the function of maintaining justice and coherence within the legal system, ensuring that parties are not blocked from the courts on one hand, and that the courts themselves do not issue orders that would undermine the law’s fundamental purposes on the other.
The respondents invested in tax-driven blueberry farming schemes promoted by Anthony and Francis Johnson (“the schemes”), which allowed the public to claim tax deductions for investments in farming enterprises. These activities took place in north-east New South Wales.
Waters v Frank; Frank v Waters [2025] NSWSC 1389
Under the schemes, each respondent signed a management agreement with Johnson Farm Management Pty Ltd, a company controlled by the Johnsons, which agreed to manage farm maintenance and harvesting for an annual fee. Fees could be prepaid and were assumed to be tax-deductible. Additionally, each respondent entered into a loan agreement with Rural Finance Pty Ltd (“Rural”), also controlled by the Johnsons, to finance their prepayments.
Contrary to s 170(1) of the Companies Code (“the Code”) of their home State, no valid prospectus regarding the schemes had been registered when the respondents were offered a “prescribed interest’ as defined by the section. After July 1 1991, none of the respondents received proceeds from farm produce sales, nor did they make loan repayments.
In 1995, Equuscorp, which had previously provided loans to the Johnson-controlled companies, sold the farmland as mortgagee in possession. Rural sold the loan agreements to Equuscorp in May 1997 under an asset sale agreement. Under this agreement, Rural assigned its interests and debts under the loan agreements to Equuscorp via a deed that included an “absolute assignment” of the legal rights and remedies under those agreements.
Between November 1997 and March 1998, Equuscorp initiated proceedings against investors, including the respondents, for breach of the loan agreements. The primary judge found these agreements unenforceable as illegal under the Code and instead sought restitution of the funds, considering the loans as a money had and received case. The judge concluded that the respondents owed Rural restitution and that the Deed effectively assigned this right to Equuscorp. The Court of Appeal, however, ruled that Rural’s right to claim restitution was unavailable and that the Deed did not assign such a right. Equuscorp appealed to the High Court. The high-level scope limited the appeal to whether restitution was available; the enforceability of the loan agreements was not disputed.
The High Court, by majority, dismissed the appeals, confirming the respondents’ non-liability to repay Equuscorp. Equuscorp argued that its claim was based on “failure of consideration,” asserting that Rural had advanced the loans believing they were enforceable and that unjust enrichment would result if the respondents did not repay. The Court rejected this, stating that allowing restitution would undermine the Code’s policy of protecting investors like the respondents. Therefore, no cause of action existed for Rural to assign. The Court also noted that if Rural had a right to restitution, it could be assigned to Equuscorp, but the question of whether the Deed transferred such a right split the Court evenly.
Waters v Frank; Frank v Waters provides a contemporary example of stultification issues arising in probate litigation. It concerned a contested Will and involved Dr Percy Waters (the deceased), a highly vulnerable and elderly man. His dependence on his carer, Lavinia Williment (the second defendant), intensified in the later years of his life. Over time, successive Wills increasingly benefited the carer, at the expense of his daughters. These changes prompted close judicial scrutiny of the circumstances under which those documents were prepared.
The Court examined three key issues.
First, it assessed whether the deceased had the necessary testamentary capacity.
Next, it considered whether the surrounding circumstances were sufficiently suspicious to demand clear proof of knowledge and approval.
Finally, it looked into whether his free will had been overborne by undue influence.
Probate in common form was granted to Mr Andrew Frank (the first defendant) on April 3 2021, in respect of the deceased’s Will dated August 5 2019. One of the deceased’s daughters, Laura (the plaintiff), sought to have that grant revoked. The plaintiff also seeks a grant of probate of an earlier Will dated June 3, 2009. Kevin Emanuel (the third defendant) filed an amended cross-claim seeking probate of the August 5 2019 Will.
On November 8 2024, the first defendant was excused from further conduct of the proceedings on account of illness. An administrator was appointed to the estate and added as a third defendant and cross-claimant. The appellant’s role below was limited to defending claims of undue influence. She did not propound any Will.
In November 2025, Elkaim AJ revoked the grant of probate in respect of the 2019 Will and instead ordered that probate be granted in solemn form of the 2009 Will. His Honour made orders as to the costs of the proceedings, which included an order that the first defendant was entitled to recover costs from the deceased’s estate on an indemnity basis. The appellant sought to appeal against the entire decision below. Since Adamson JA made her orders, Ms Waters has filed a cross-appeal against Elkaim AJ’s order as to the first defendant’s costs.
The key issues before the Court were:
(i) whether there was a material change of circumstances warranting the cessation or variation of the orders of Adamson JA;
(ii) whether special circumstances existed to warrant an order that security for costs be provided under UCPR, r 51.50(1); and
(iii) whether an order for security for costs was likely to stultify the appeal.
The Court’s reasoning on security for costs and stultification in Waters v Frank is instructive. The Court of Appeal held that a cross-appeal filed by one of the daughters altered the proceedings. The cross-appeal required a detailed review of the factual findings and evidence at first instance. As a result, appellate costs could not be attributed solely to the appellant carer. The Court found this constituted a material change in circumstances and justified reconsideration of the security for costs orders.
The decision includes observations on the practical conduct of probate litigation. The Court noted that beneficiaries often limit their involvement at first instance to reduce personal exposure to costs, especially where executors or administrators propound the Will. If those parties do not appeal, beneficiaries with larger financial interests may seek to challenge the judgment on appeal. The Court found that this conduct is not unreasonable and does not constitute a special circumstance justifying onerous security orders.
The judgment addresses the approach appellate courts take when assessing the prospects of probate appeals at interlocutory stages. The Court stated that applications for security for costs should not function as preliminary appeals, notably in complex succession matters involving factual findings, expert medical evidence, credibility assessments, and allegations of undue influence.
The Court accepted that necessitating considerable security for costs would likely prevent the appeal from proceeding. Evidence showed the appellant had limited financial resources, relied on pension support, lived in rented accommodation, and had modest entitlements under a separate overseas estate. The Court declined to infer undisclosed financial capacity based solely on previous assistance from the deceased.
The Court of Appeal emphasised that probate litigation encompasses not only the validity of testamentary documents but also procedural considerations such as who propounds a Will, the allocation of litigation risk, and the preservation of appellate rights where there is a financial imbalance. The case illustrates the courts’ method of balancing access to justice with the protection of parties from unrecoverable appellate costs.
For future litigants and legal practitioners, this balancing test holds concrete significance. In practice, it means that courts will carefully scrutinise any request for security for costs to ensure it does not create an insurmountable barrier for parties with legitimate claims or appeals, especially where financial hardship is a factor.
Legal practitioners advising clients in probate disputes should be prepared to present clear evidence of impecuniosity and the risks of stultification, and to anticipate the Court’s close attention to the broader implications for access to justice and the fair allocation of costs. Law students should recognise that these principles not only set out procedural fairness in theory, but are actively applied to protect real parties from being unfairly excluded from pursuing their legal rights.