Federal Court of Australia

Jorgensen v JML Rose Pty Ltd (Security for Costs) [2026] FCA 64

ORDERS

THE COURT ORDERS THAT:

1.    By 4.00 pm AEST on 9 March 2026, the appellant give security for the first respondent’s costs of this appeal and the appeal in QUD 609 of 2025 in the sum of $30,000 to be provided by payment into Court in this proceeding to be dealt with pursuant to r 2.42 of the Federal Court Rules 2011 (Cth).

2.    In the event of non-compliance with order 1 this appeal be stayed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    Order 1 in appeal QUD 205 of 2025 made this day has effect as if it is made also in this appeal, but for the avoidance of doubt, there is only one sum of $30,000 on account of security for the first respondent’s costs of both appeals that the appellant must pay into Court.

2.    In the event of non-compliance with order 1 in appeal QUD 205 of 2025 this appeal be stayed.

3.    The appellant’s interlocutory application filed 3 January 2026 to adduce evidence on the appeal be adjourned to a date to be fixed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FR JUDGMENT

WHEELAHAN J:

1    There are two interlocutory applications before the Court. The first is an interlocutory application by the first respondent for security for costs of two appeals. The second is an interlocutory application filed by the appellant in QUD 609 of 2025 for leave to adduce evidence on the appeal. At the hearing I determined to adjourn the latter application to a date to be fixed for reasons including its complexity, that it might more appropriately be considered by a Full Court allocated to the appeals, and moreover that pending the outcome of the security for costs application, it was premature.

2    These reasons concern the first respondent’s interlocutory application for security for costs.

Background

3    The appellant is self-represented and has filed two notices of appeal by which he challenges –

(a)    orders of Logan J made 20 March 2025 in JML Rose Pty Ltd v Jorgensen (No 2) [2025] FCA 282 which dismissed an application for review and affirmed a sequestration order under s 52(1) of the Bankruptcy Act 1966 (Cth) made by a Registrar; and

(b)    orders of Wheatley J made 19 August 2025 in JML Rose Pty Ltd v Jorgensen (No 3) [2025] FCA 976 dismissing the appellant’s application under s 153B of the Act to annul the bankruptcy.

4    A Registrar of the Court ordered on 16 October 2025 that the two appeals be case-managed and heard together.

5    The first respondent to each notice of appeal is the petitioning creditor, being a firm of solicitors, JML Rose Pty Ltd (JML). The appellant, Mr Jorgenson, is a former client of the firm. The second respondent is the trustee of Mr Jorgensen’s bankrupt estate. The trustee took a neutral position on the application, stating through counsel that he would abide by the decision of the Court.

6    On 29 June 2022, JML obtained a default judgment against Mr Jorgenson in the Magistrates Court of Queensland in the sum of $55,983.25 together with interest of $360.37 and costs of $2,153.16. JML caused a bankruptcy notice dated 7 August 2024 to be issued and served on Mr Jorgensen. The debt due under the default judgment together with accrued interest was the subject of the bankruptcy notice.

7    On 5 October 2024, Mr Jorgensen lodged an application with the Magistrates Court to set aside the default judgment. In a decision published 30 May 2025, and referred to below, a Magistrate held that the application lodged on 5 October 2024 was not accepted for filing and the documents were returned to Mr Jorgensen as “unprocessed”.

8    On 16 October 2024, the Registrar made the sequestration order. Mr Jorgenson did not appear at the hearing for reasons that are not material to this application.

9    On 21 October 2024, and after the sequestration order was made, Mr Jorgensen filed an application in the Magistrates Court to set aside the default judgment, which was accepted and processed by the Magistrates Court.

10    On 11 November 2024, Mr Jorgensen applied to the Court for a de novo review of the Registrar’s orders. On 29 November 2024, Logan J dismissed an application by Mr Jorgensen to stay the sequestration order and made orders for the orderly filing of affidavit material by the parties in relation to the de novo review.

11    Both parties filed affidavits that were outside the terms of Logan J’s orders of 29 November 2024, with Mr Jorgensen filing five affidavits out of time, and JML filing one affidavit out of time. On 31 January 2025 the parties were advised by email from a court officer that the affidavits would be removed from the Court file pursuant to r 2.28(1)(b)(i) of the Federal Court Rules 2011 (Cth). The parties were advised in the email that it remained open to them to seek leave of the Court to read and rely on the documents at the hearing of the review, which was fixed for 4 February 2025, but was later adjourned to 20 March 2025.

12    In the meantime, Mr Jorgensen’s application to set aside the default judgment was heard by the Magistrates Court over four days, being 20 December 2024, 29 and 30 January 2025, and 4 February 2025. The Magistrate reserved her decision.

13    On 20 March 2025, Logan J dismissed the application to review the sequestration order. His Honour was satisfied that an act of bankruptcy had occurred and was satisfied that the debt remained due and owing to JML. His Honour declined to go behind the default judgment because he was not satisfied on the material that there was reason to question the default judgment or the existence of the underlying debt. In addressing that question his Honour identified the affidavits relied on by Mr Jorgensen as being those filed on 15 October 2024 and 1 November 2024 and dealt with the issues arising from those affidavits. It is not evident from his Honour’s reasons that any application was made for leave to rely on the affidavits that had been removed from the Court file, and there is no material before me to suggest that any application for leave was made.

14    Nor was his Honour persuaded to allow more time to enable the Magistrates Court to give its decision on the application to set aside the default judgment or otherwise to decline to make a sequestration order: see [43]–[44]. His Honour had adjourned the hearing of the petition once and was not persuaded to defer again the exercise of the Court’s jurisdiction. Relevant to that issue was the existence of a supporting creditor, Body Corporate for Cairns Central Plaza Apartments Community Titles Scheme 40022. The supporting creditor made submissions and filed material claiming an indebtedness well in excess of the bankruptcy threshold. His Honour stated that if it transpired that Mr Jorgenson was successful in his application to set aside the default judgment, then it was open to him to apply to annul the bankruptcy.

15    On 10 April 2025, Mr Jorgensen filed the notice of appeal in QUD 205 of 2025 against the orders of Logan J dismissing his application to review and affirming the sequestration order.

16    On 30 May 2025, the Magistrates Court of Queensland set aside the default judgment. The Magistrate accepted a submission on behalf of the trustee that Mr Jorgensen lacked standing to bring the application, as it was filed after the sequestration order had been made. However, the Magistrate held that the Court’s power under the Uniform Civil Procedure Rules 1999 (Qld) to set aside a default judgment was not expressed as being dependent upon an application by a party to the proceeding. In setting aside the default judgment the Magistrate held that the judgment had been regularly entered. However, the Magistrate set aside the judgment on the grounds that her Honour was satisfied that Mr Jorgensen had satisfactory explanations for not filing a notice of defence and for the delay after judgment in bringing the application to set aside and that Mr Jorgensen had raised a valid prima facie defence to the claim. That defence involved a claimed failure by JML, on the evidence before the Magistrate, to give a costs disclosure notice to Mr Jorgenson, contrary to ss 308 and 310 of the Legal Profession Act 2007 (Qld). Her Honour referred to evidence given on the basis of information and belief that a costs disclosure had been provided to Mr Jorgensen, and to references to costs disclosure in the body of the costs agreements themselves. However, her Honour acted on the absence of other documentary evidence. Her Honour accepted a submission by Mr Jorgensen that, in the absence of disclosure notices, the fees were incapable of being recovered by JML or were liable to be assessed. The effects of s 316 of the Legal Profession Act include that if a legal practice does not make a required disclosure, then the client need not pay the legal costs, and a law practice may not maintain proceedings to recover the costs unless the costs have been assessed under Division 7 of the Act. Assessments under Division 7 are made by a person appointed under the Uniform Civil Procedure Rules as a cost [sic] assessor: s 300. Further, in assessing the relevant costs the amount may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose: s 316(4).

17    Separately, the Magistrate addressed a submission by JML that there was no utility in setting aside the default judgment because the costs had already been assessed in the District Court. This submission was rejected on the ground that the assessment in the District Court was undertaken on a standard basis and limited to legal services provided in that proceeding alone, whereas the claim for the recovery of legal costs in the Magistrates Court was broader, and was calculated on a solicitor and own client basis.

18    On 16 July 2025, Mr Jorgensen filed an application under s 153B of the Bankruptcy Act for an order that his bankruptcy be annulled. That application was dismissed by Wheatley J on 19 August 2025. The reasons for the dismissal of the application were summarised by her Honour at [9] of the reasons for judgment –

(1)    First, Mr Jorgensen has not established that there is no debt owing by him to JML upon which the bankruptcy proceedings could have relied on, even though the judgment has been set aside. Further and separately, there was and is evidence of a supporting creditor who was willing to be substituted on the creditor’s petition on the date of the sequestration order. There remains a debt owing to that supporting creditor. Accordingly, I am not satisfied that the Court was not bound to make the sequestration order on 16 October 2024 or on 20 March 2025. That is, I am not satisfied that the sequestration order ought not to have been made, and hence Mr Jorgensen has not satisfied the first element of s 153B(1) of the Act.

(2)    Second, and in any event, including even if I was satisfied that the sequestration ought not to have been made, I would not, in an exercise of discretion, annul the bankruptcy. Mr Jorgensen has not provided sufficient evidence of his solvency, either at the time of the sequestration, or now. In contrast, there is evidence of outstanding amounts that are due and owing. Mr Jorgensen also has not provided full and frank disclosure of his financial affairs, completed his statement of affairs and he has not made any proposal for the payment of the fees and disbursements of the Trustee. The lack of evidence of Mr Jorgensen’s financial position and solvency is a sufficient reason not to exercise the discretion in favour of annulling the bankruptcy. When the discretion is also considered in the totality of the evidence (or lack of it), it is clear it does not weigh in favour of granting the annulment sought.

19    In identifying Mr Jorgensen’s failure to provide sufficient evidence of his solvency and his failure to make full and frank disclosure of his financial position as independent discretionary reasons to refuse the application, Wheatley J applied established principles summarised in Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18 at [16] (Rares, Flick and Bromberg JJ), Yang v L & H Group (A Ltd Partnership) [2015] FCA 932 at [29](d) (Beach J), and Zaghloul v Commissioner of Taxation [2020] FCA 1045 at [12] (Banks-Smith J). See also the helpful summary of principles in Phillips v Carrafa, in the matter of Phillips (Bankrupt) [2025] FCA 870 at [90], [92] and [104]–[105] (Hill J).

20    On 4 September 2025, Mr Jorgensen filed a notice of appeal in QUD 609 of 2025 against the dismissal by Wheatley J of his annulment application.

The grounds of appeal

QUD 205 of 2025

21    By his notice of appeal in QUD 205 of 2025 against the dismissal of the review application Mr Jorgensen raises grounds of appeal under the following thirteen headings which refer to various sections of the Bankruptcy Act –

(a)    Disputed Debt, Excessive Interest, and Procedural Unfairness (s 40(1)(g)).

(b)    Defective and Illegal Bankruptcy Notice (s 41).

(c)    Procedural Unfairness, Mental Health, and Late Disclosure (s 52).

(d)    Invalid Cost Agreement and Breach of Pre-emptive Disclosure (s 308).

(e)    Negligence in Failing to Place Equitable Lien.

(f)    Registry Bias and Prejudicial Material (s 52).

(g)    Misrepresentation, Abuse of Process, and Miscarriage of Justice.

(h)    Procedural Unfairness in Scheduling and Prejudice as Self-Represented Litigant (s 52).

(i)    Failure to Apply Bankruptcy Act as Last Resort (s 52).

(j)    Unlawful Freezing of Discretionary Trust Accounts by Trustee (s 116).

(k)    Failure to Assess Quantum and Mischaracterisation of Recovery (s 52).

(l)    Suppression of Application to Set Aside Default Judgment (s 52).

(m)    Failure to Meet Criteria for Affirming Sequestration Order (s 52).

22    The grounds of appeal under these headings are wide-ranging. It is not necessary to set out the detailed particulars of all the grounds. Many of the grounds appear confusing. Some grounds appear to overlap from one ground to the next. Some of the grounds appear to challenge the decision of the Registrar rather than the orders made on the de novo review. One ground alleges bias on the part of the Court’s Registry in rejecting some of Mr Jorgensen’s documents.

23    On a beneficial reading of Mr Jorgensen’s grounds of appeal there is within them a challenge to the primary judge’s finding that the debt was still owing to JML, which is accompanied by a claim that Mr Jorgensen disputed the debt. This challenge emerges from subparagraph 3(d) of the notice of appeal which claims that there was an invalid costs agreement and which cites ss 308, 316, 322(1)(a), 322(3)(b) and 328 of the Legal Profession Act. It is open to read the notice of appeal as implicitly challenging the primary judge’s decision not to go behind the default judgment. In written submissions in opposition to the application for security for costs Mr Jorgensen relied on ss 308 and 316 of the Legal Profession Act to support his claim that the costs were not due and payable and did not qualify as a debt for the purposes of the petition.

QUD 609 of 2025

24    By his notice of appeal in QUD 609 of 2025 against the dismissal of the annulment application Mr Jorgensen raises twelve grounds of appeal under the following numbered headings which again refer to sections of the Bankruptcy Act and are briefly elaborated upon in the notice –

(1)    Invalid act of bankruptcy (s 52(1); s 40(1)(g)).

(2)    No liquidated sum (s 41(1)(d)).

(3)    No jurisdiction after set-aside.

(4)    Defective bankruptcy notice and no debt.

(5)    Supporting creditor could not cure petition.

(6)    Failure to go behind the debt (s 52 duty).

(7)    Misapplication of s 153B.

(8)    Irrelevant post-sequestration matters.

(9)    Erroneous insolvency finding.

(10)    Fraud on the Court.

(11)    Abuse of process.

(12)    Cumulative miscarriage of justice.

25    On a beneficial reading of the grounds of appeal against the annulment decision there is at least a claim that the judge erred in treating JML’s claim for costs as a debt when Mr Jorgensen alleges, amongst other things, that it was an unliquidated claim. There is also a ground alleging that the judge erred in treating the claim of the supporting creditor as one of the matters which resulted in her Honour not being satisfied that the sequestration order should not have been made. There are other claims of fraud, abuse of process, and miscarriage of justice.

The competency of the appeals

26    JML has filed a notice of objection to the competency of each appeal, which is a procedure provided for by r 36.72(1) of the Federal Court Rules. In McKinnon v Commonwealth Bank of Australia [2006] FCAFC 10, the Full Court (Black CJ, Stone and Young JJ) stated at [6] that to say that an appeal is incompetent is to employ a term of art, and that “what it means is that the matter simply cannot proceed because the law does not allow it to”. Examples of appeals that are incompetent include an appeal against an interlocutory order brought without leave, and an appeal where the grounds of appeal are incomprehensible or unrelated to the issues that were the subject of the judgment: Lindsey v Philip Morris Ltd [2004] FCAFC 40 (Whitlam, Marshall and Finkelstein JJ); Zegarac v Dellios [2007] FCAFC 58 (North, Weinberg and Jessup JJ).

27    In relation to the appeal in QUD 205 of 2025, the notice of objection to competency alleges irregularities such as the failure to join the trustee and the supporting creditor, which have now been cured. Other grounds of objection challenge some of the orders sought and address the merits of the grounds of appeal, claiming that some of them raise issues that were not raised at first instance.

28    In relation to the appeal in QUD 609 of 2025, the notice of objection to competency also challenges the availability of some of the orders sought and the merits of the grounds of appeal claiming in places that no “legal error” is identified.

29    One matter not raised by JML’s objection to competency in QUD 609 of 2025 is whether leave to appeal is required. Under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) an appeal shall not be brought from an interlocutory judgment without leave. There is authority that an order dismissing an application for the annulment of a bankruptcy is interlocutory: Re Ditfort; Ex parte Deputy Commissioner of Taxation (NSW) [1988] FCA 275; 19 FCR 347 at 350 (Gummow J). At the hearing of this application, I raised with the parties the fact that no leave had been sought to bring the appeal in QUD 609 of 2025.

The orders sought by JML on the application

30    JML seeks the following orders –

(1)    Within seven days, pursuant to r 36.09 of the Rules and s 56 of the Federal Court of Australia Act, the appellant provide security for costs of the first respondent in the sum of $30,000 in respect of the two appeals.

(2)    In the event of non-compliance with a security for costs order, the appeals be stayed.

(3)    The appellant pay the costs of the first respondent in respect of this interlocutory application.

The evidence on the application

31    JML read two affidavits to the Court on the application. The first was an affidavit of the solicitor handling the matter on behalf of JML, Mr Lavercombe, sworn 21 October 2025. That affidavit was received into evidence without objection. The main points made by the evidence in that affidavit are –

(a)    JML has not been paid the costs of $4,585.00 that were ordered by the Registrar to be paid to it out of Mr Jorgensen’s bankrupt estate;

(b)    the costs that were ordered to be paid to JML out of Mr Jorgensen’s bankrupt estate by Logan J on 20 March 2025 and 19 August 2025 have not been taxed or otherwise fixed;

(c)    no substantive steps have been taken in the appeals;

(d)    Mr Jorgensen had still not provided a statement of affairs, as required by s 54 of the Bankruptcy Act notwithstanding the finding by Wheatley J that he had not provided a statement of affairs and the relevance of that fact to her Honour’s discretionary decision to dismiss the application to annul the bankruptcy;

(e)    Mr Jorgensen had deposed to his solvency in an affidavit filed on 18 September 2025 in the appeal QUD 609 of 2025, and that if this were the position, an order for security for costs would not stultify the appeals;

(f)    JML wrote to Mr Jorgensen on 26 September 2025 proposing that he provide security for costs to which JML had not received a proposal in response;

(g)    Mr Jorgensen had continued to use artificial intelligence in the presentation of his material, which was noted by Wheatley J at [98] of her Honour’s reasons, and which added to JML’s costs of the litigation; and

(h)    JML did not seek security for its own professional costs but sought security to cover the fees of junior counsel at $4,400 per day and other disbursements, which was claimed in the total sum of $30,000.

32    JML also read without objection the affidavit of Mr Jorgensen affirmed 18 September 2025. That was a course open to JML: Muirfield Properties Pty Ltd v Erik Kolle & Associates [1988] VR 167 (Brooking J). That affidavit contains statements by Mr Jorgensen directed to support a claim that he was solvent at the time the sequestration order was made on 16 October 2024. Mr Jorgensen annexed to the affidavit three Suncorp Bank account statements. Each statement was addressed to Mr Jorgensen in his capacity as trustee for the Leigh Jorgensen Family Trust. One statement was an investment loan statement showing a closing balance of indebtedness on 21 September 2024 of $74,907.78. The investment loan statement showed payments into the account of $50,000 and $110,000 on 10 September 2024. The source of the payments cannot be ascertained on the evidence. The other statements were for deposit accounts. A statement for a business saver account showed a balance in the sum of $5,180.19 on 31 December 2024. It also showed a deposit into, and then an immediate withdrawal from, the account of $200,000 on 1 July 2024. Another deposit and immediate withdrawal occurred on 2 July 2024 in the sum of $40,000. A statement for an everyday options account showed a balance of $191.79 on 5 September 2024.

33    The claims made by Mr Jorgensen in the affidavit of 18 September 2025 include the following –

(a)    Mr Jorgensen describes himself as a “disability support pensioner and property investor” (emphasis added);

(b)    as at 16 October 2024, his “directly and indirectly held assets exceeded $2 million, including real property and trust related investments”;

(c)    against those assets his mortgage liability was approximately $200,000;

(d)    his net equity exceeded $1.8 million;

(e)    he received a disability support pension of approximately $3,000 per month;

(f)    he received rental income of approximately $5,000 per month “from family assets, more if ever needed – but it’s not”;

(g)    he came from “a hardworking and industrious family, with significant assets and excessive liquidity by anyone’s standards”;

(h)    he had been a party to other court proceedings that he identified that had been “derailed”; and

(i)    he was about to be appointed as a director of Nevgold Pty Ltd, “a family company that controls substantial wealth”, and that his appointment had been held back as a result of the sequestration order.

34    Mr Jorgensen read one affidavit on the application, being an affidavit filed in QUD 609 of 2025 and sworn on 27 January 2026, two days before the hearing. The affidavit and annexures are 48 pages in length. The affidavit was filed outside the time fixed by a Registrar of the Court for the filing of material, which was 7 November 2025. JML objected to the affidavit on the ground that broad assertions of fraud were made in the affidavit to which it had not had an opportunity to respond. In response to this submission, I proposed and then made a direction under s 136 of the Evidence Act 1995 (Cth) that no representation of fact in the affidavit was received as evidence of its truth. I explained to Mr Jorgensen that the effect of this ruling was that I would receive the affidavit as evidence of the fact that he made the claims in the affidavit and not as evidence of the truth of the fraud, and Mr Jorgensen indicated that he was content for the affidavit to be received on that basis as that was his intention.

35    Amongst other things, Mr Jorgensen’s affidavit of 27 January 2026 annexes the email dated 31 January 2025 by which the parties were advised that the several affidavits filed outside the terms of Logan J’s orders of 29 November 2024 were removed from the Court file. Mr Jorgensen claimed in the affidavit that the effect of the removal of the documents from the Court file prior to the hearing before Logan J had the result that the Court file did not contain significant affidavit material on which he intended to rely and that the hearing proceeded upon the basis of a materially incomplete record.

36    The affidavit also annexes material that Mr Jorgensen would seek to adduce as new evidence in the appeals. Much of that material is directed to documents that were apparently before Wheatley J in a hearing bundle which included copies of disclosure statements given by JML to Mr Jorgensen in relation to the legal costs giving rise to the alleged debt. The tenor of Mr Jorgensen’s claims in the affidavit is that these copy documents had been reconstructed and were not authentic. The claims relied on a purported comparison of metadata, and what was claimed to be different formatting of the letterhead and logo of JML at different times.

JML’s submissions

37    In support of its application, JML submitted that the appeals are unmeritorious and that therefore there is a risk that it would be left out of pocket by continuing to defend the appeals unless security is ordered. JML submitted that ordering security for costs in a matter at first instance is distinct from ordering security at the appellate level because in the latter scenario there has already been “a determination adverse to the person against whom security for costs is sought”: Du Bray v ACW [2020] FCA 1680 (Du Bray) at [13] (Flick J). In exercising the broad and unfettered discretion to determine an application for security for costs, JML submitted that the principles outlined by Flick J in Du Bray at [9]–[15] provide appropriate guidelines which ought to be taken into account.

38    JML submitted that the relevant principles that emerge from Du Bray, as they apply to its application, include the following.

39    First, it is relevant whether the application for security for costs has been brought promptly. JML submitted that only limited procedural steps in the appeals had been taken prior to the application being filed, including two case management hearings in QUD 205 of 2025 and one case management hearing in QUD 609 of 2025.

40    Secondly, JML submitted that there is a risk that the appellant would not meet any costs order against him in the event that his appeals are unsuccessful. JML relied on Mr Jorgensen’s failure to file and to furnish to the trustee a statement of affairs as required by s 54 of the Bankruptcy Act. JML submitted that Mr Jorgensen had denied liability for debts incurred as trustee, had alienated assets said to be held by him as trustee of a discretionary trust, and had failed to satisfy previous orders for costs. JML relied on a costs order that was made on 16 October 2024 at the time the sequestration order was made, and further costs orders made on 20 March 2025 and 19 August 2025. It is convenient to identify immediately that each of these costs orders provided that JML’s costs be paid from the estate of Mr Jorgensen in accordance with the Bankruptcy Act and did not require Mr Jorgensen to pay the costs personally. Further, the costs the subject of the orders made on 20 March 2025 and 19 August 2025 were not fixed and are yet to be assessed.

41    Thirdly, JML submitted that security for costs would not stultify the appeals because Mr Jorgensen had claimed that he has substantial wealth, relying on Mr Jorgensen’s affidavit of 18 September 2025 which JML read into evidence. JML submitted that in his affidavit Mr Jorgensen had identified assets that were held by him as a trustee, and that there was no evidence before the Court of any assets held by Mr Jorgensen beneficially.

42    Fourthly, JML submitted that the appeals do not enjoy prospects of success. This was for reasons including that the grounds of appeal do not identify “legal error” on the part of either primary judge and were an attempt to re-litigate issues.

43    Fifthly, JML submitted that the cause of Mr Jorgensen’s impecuniosity was irrelevant because he claimed to be of means.

44    Sixthly, JML submitted that there were no relevant public interest factors or matters particular to the case.

45    Finally, JML submitted that Mr Jorgensen had previously relied upon artificial intelligence that produced references to non-existent authorities or authorities that did not support the propositions for which they were cited: see JML Rose Pty Ltd v Jorgensen (No 3) [2025] FCA 976 at [7] and [104]–[105]. JML submitted that this conduct added unnecessarily to the cost of the litigation and if continued would result in additional costs being incurred by JML, justifying the amount of security sought.

Mr Jorgensen’s submissions

46    Towards the commencement of the hearing I requested Mr Jorgensen to identify the written submissions on which he relied. Mr Jorgensen indicated that he relied on his written submissions dated 8 November 2025, 7 December 2025, 8 December 2025 and 16 January 2026. Mr Jorgensen also made oral submissions in response to the application.

47    Mr Jorgensen’s submissions dated 8 November 2025 advanced claims in relation to the sequestration order of false evidence, fraud, abuse of process, denial of procedural fairness, and a claim that JML lacked standing to bring the application for security for costs. I reject the submission that JML, as a party to the appeals, lacks standing to bring the security for costs application. Within the first set of submissions is a claim at [8] that, “as a person presently subject to a sequestration order, any security could only be provided by the Trustee”.

48    Mr Jorgensen’s submissions dated 7 December 2025 attached an annexure citing, inter alia, Wren v Mahoney [1972] HCA 5; 126 CLR 212 and Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132 in support of his claim that there was no debt and that the Court should have gone behind the default judgment. He submitted that any order for security for costs would operate oppressively and stifle a meritorious appeal.

49    The submissions dated 8 December 2025 elaborated upon Mr Jorgensen’s claims that there was no debt, that the Court should have gone behind the default judgment, and that the appeals had strong prospects of success. Amongst other things, Mr Jorgensen submitted that in the bankruptcy context, special caution is required. It was submitted that where the appeal raises questions whether there was ever a valid petitioning creditor’s debt, or whether the sequestration order is a nullity because jurisdictional preconditions were not satisfied, the Court should not lightly shut out that challenge by imposing an obligation to provide security for costs.

50    Mr Jorgensen’s submissions dated 16 January 2026 are titled “Outline of Submissions for the Appellant in Opposition to Security for Costs and in Support of Appeal Grounds (Focus: Consequences of Non-disclosure Under the Legal Profession Act 2007 (QLD) – No Qualifying Petition Debt)”. The submissions address the merits of the grounds of appeal, including Mr Jorgensen’s claim that there was no debt. The penultimate paragraph of the submissions addresses factors relevant to the discretion to grant the security for costs application and claims that an order for security for costs would stifle the appeal.

51    In oral submissions, Mr Jorgensen claimed that the debts owing to other creditors such as those arising from levies on properties were “trust debts” and submitted in relation to the claimed indebtedness to the supporting creditor that “the judgment debt is for the trust” and that it was “under active appeal in the District Court”. See, however, Vacuum Oil Co Pty Ltd v Wiltshire [1945] HCA 37; 72 CLR 319 at 324 (Latham CJ) and Re Johnson (1880) 15 Ch D 548 at 552 (Jessel MR) concerning the liability at law of a trustee. In relation to Mr Jorgensen’s claim that the debt owing to the supporting creditor was the subject of an appeal to the District Court he relied on a transcript of a hearing on 26 April 2024 before a judge of that Court that was annexed to his 18 September 2025 affidavit to support a submission that the judgment would be set aside. The transcript shows that there was some argument put on the appeal, but that the hearing was adjourned to enable Mr Jorgensen to amend his notice of appeal. There is no direct evidence that there has been any decision on the appeal, and I infer from Mr Jorgensen’s submissions that the appeal, if it remains on foot, has not been determined.

52    In relation to the debt claimed by JML which was the subject of the creditor’s petition, Mr Jorgensen reiterated that the debt was disputed and that the default judgment was set aside on the basis of that dispute. Mr Jorgensen submitted that the relevant costs agreement lacked clauses required by statute and that there was no costs disclosure, which I understood Mr Jorgensen to submit were findings made by the Magistrate. I pause to note the effect of s 91 of the Evidence Act, and that the Magistrate’s decision was not a final decision on the existence of the debt but was an interlocutory decision that there was a prima facie defence.

53    Mr Jorgensen further submitted that he was solvent, but that the trustee had control of his property. He submitted that he had not understood that solvency would be an issue in his annulment application. Mr Jorgensen acknowledged that he had still not provided a statement of affairs but submitted that he had sought to cure that failure by providing his affidavit of 18 September 2025 to which he referred as the “solvency affidavit”. In relation to his claimed indebtedness to the supporting creditor, Mr Jorgensen submitted, consistently with his written submissions, that “the judgment debt is for the trust”.

54    Mr Jorgensen was otherwise given a full opportunity to develop oral submissions in which he maintained that the appeal was not hopeless based upon the disputed nature of the debt and what he described as “record integrity problems”, which I understood to be a reference to his claims about the authenticity of JML’s documentary evidence concerning the giving of costs disclosures. He submitted again that an order for security for costs would stultify the appeal. Mr Jorgensen submitted that because control of property was with the trustee, an order for security would prevent the appeal from being heard.

55    The hearing of the interlocutory application took place on Thursday 29 January 2026. I reserved my decision to read and consider the detailed written submissions and affidavit material that had been read to the Court.

56    In the days after the hearing Mr Jorgensen lodged with the Court two further sets of submissions and emailed the Queensland Registry of the Court purporting to make an “administrative complaint” against the Registrar who made the sequestration order. The occasion for Mr Jorgensen to make submissions to the Court was at the hearing, and he had a full opportunity to do so. Communications to the Court after a hearing without leave should not be made: see Frugtniet v Secretary, Department of Social Services [2021] FCAFC 127; 285 FCR 159 at [85] and the cases cited therein. No leave was given to Mr Jorgensen to file further submissions. I directed the Registry pursuant to r 2.27(e) of the Federal Court Rules not to accept the further submissions for filing and I have not had regard to them or the email correspondence that Mr Jorgensen sent to the Court after the hearing.

An order for security for costs should be made

57    The principles that guide the exercise of the Court’s discretion to order security for the costs of an appeal pursuant to r 36.09 of the Federal Court Rules and s 56 of the Federal Court of Australia Act are well known. The general principles were set out by Abraham J in Lehrmann v Network Ten Pty Limited [2024] FCA 1226 at [19]–[26] in terms that I respectfully adopt –

[19]    The power to order security is discretionary and has been described as “broad”: James v Australian and New Zealand Banking Group Ltd (No 1) [1985] FCA 539; (1985) 9 FCR 442 at 444; Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 (Madgwick) at [6]; Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418 (Stapleton) at [6]-[7]. The discretion “is to be exercised in light of the facts and circumstances of the particular case”: Stapleton at [6], quoting Botsman v Bolitho [2018] VSCA 111 at [36]. The issue is essentially one of risk management: East Grace Corporation v Xing (No 1) [2005] FCA 219 at [6].

[20]    Against that background, the authorities reflect the type of factors which have been considered as relevant on such applications, which have included the following.

[21]    First, whether the application for security for costs has been brought promptly: KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76; (1995) 56 FCR 189 at 197.

[22]    Second, whether the applicant (or appellant) is impecunious such that they would not be able to satisfy a costs order against it: Bell Wholesale Co. Ltd v Gates Export Corporation [1984] FCA 29; (1984) 2 FCR 1 at 4; Australian Equity Investors v Colliers International (NSW) Pty Ltd [2012] FCAFC 57 at [25]-[30].

[23]    Third, whether the appellant is a natural person or a corporation. Although courts are disinclined to order security against natural persons, even if impecunious, as Lindgren J observed in Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]-[33], it has been recognised that being a natural person is no bar to an order for security for costs.

[24]    Fourth, the prospects of success of that person’s claim, or the merits of that claim: see, e.g., Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643 at [12]-[13]. Prospects of success may be especially relevant to an application for security for costs of an appeal given “the appellant has had his day in court”: Singh v Secretary, Department of Employment and Workplace Relations [2007] FCA 90 at [12].

[25]    Fifth, interrelated with impecuniosity is whether an order for security would stifle the litigation. It is generally observed that poverty is no bar to a litigant: Cowell v Taylor (1885) 31 Ch D 34 (Cowell) at 38. This is particularly so where it is a primary proceeding, although the position on appeal may be different: see, e.g., Dye v Commonwealth Securities Limited [2012] FCA 992 (Dye) at [27]. Cf Nyoni v Shire of Kellerberrin (No 9) [2016] FCA 472 (Nyoni) at [8]. It is for the party resisting the order to show that impecuniosity would stultify the proceedings.

[26]    The factors that may be relevant cannot be exhaustively stated, with the only limitation being that the discretion is exercised judicially: Madgwick at [6]. The Court’s discretion is to be exercised having regard to whether the interests of justice are best served by making or refusing an order: Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd [1992] FCA 592; (1992) 8 ACSR 405 at 411; Karis at [38].

58    Of importance to this application are the following considerations –

(a)    the prospects of the appeals;

(b)    the risk that a costs order would not be satisfied;

(c)    whether an order for security would stultify the appeals; and

(d)    the overriding consideration of the interests of justice in exercising the discretion which is undertaken in light of the facts and circumstances of each particular case.

The prospects of the appeals

59    It is not possible to form a firm view one way or the other about the underlying merits of Mr Jorgensen’s appeal from the orders of Logan J. That is for reasons including that the Court on this application cannot form a view on the contested question whether JML gave costs disclosure statements to Mr Jorgensen.

60    However, the appeal faces the following difficulties. Mr Jorgensen seeks to raise issues that do not appear to have been the subject of evidence or submissions before Logan J. To be clear, I am not referring to the fact that the default judgment was set aside. The setting aside of the default judgment did not affect the existence of the act of bankruptcy, which was the failure to comply with the bankruptcy notice which Mr Jorgensen did not apply to have set aside. And nor do the Magistrate’s reasons on the interlocutory application to set aside the default judgment determine or otherwise constitute admissible evidence on the question of the existence of the debt. Rather, I am referring to the actual basis on which the underlying debt was put in issue before Logan J and the fact that it does not appear that any evidence or arguments were directed to whether the disclosure notices had been given, and it does not appear that any application was made for leave to rely on any of the affidavits that were removed from the Court file. I am therefore not satisfied that Mr Jorgensen contested the debt on the grounds now advanced. While it is possible to advance an appeal on grounds not argued below, it is the practice of the Court to permit that course only with leave. The hearing before Logan J was not a preliminary skirmish: Coulton v Holcombe (1986) 162 CLR 1 at 7. Further, there is a likelihood that Mr Jorgensen would not be able to advance his arguments on appeal without adducing evidence before the Full Court, for which he would also require leave. Otherwise, to the extent that the appeal seeks to challenge a discretionary decision not to adjourn the hearing of the de novo review, or not to make a sequestration order on the ground that there was other sufficient cause, Mr Jorgensen would have to identify an error of the type discussed in House v The King [1936] HCA 40; 55 CLR 499 at 504–505 that resulted in the miscarriage of either of those discretions: see Endresz v Australian Securities and Investments Commission (No 2) [2015] FCAFC 33; 228 FCR 334 at [41] (Edmonds, Gordon and Beach JJ). In that event too, the state of the evidence and submissions before Logan J would be relevant.

61    In relation to the purported appeal from the orders of Wheatley J, as I have mentioned, I raised with the parties at the hearing of the application the question whether leave to appeal is required because an order refusing an application to annul a bankruptcy is interlocutory. If leave is required, Mr Jorgensen would have to satisfy the Court that leave should be given by reference to the established principles referred to in cases such as Décor Corp Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397. One question that would likely loom large on any leave application is whether the decision of Wheatley J is attended with sufficient doubt to warrant a grant of leave to appeal. An independent basis on which her Honour declined to exercise the discretionary power to annul the bankruptcy was the unsatisfactory state of the evidence about Mr Jorgensen’s solvency and his financial position. Mr Jorgensen has not advanced any persuasive submissions to suggest any arguable error on this account. A striking feature of the case is Mr Jorgensen’s long-standing and continued failure to provide a statement of affairs to the trustee, which he was required to provide within 14 days of being notified of the bankruptcy, noting that the original sequestration order was made on 16 October 2024. This failure is compounded by the evidence in Mr Jorgensen’s affidavit affirmed 18 September 2025 which paints an opaque picture of substantial assets being held in trust, or by family members, or by an associated company, with funds being available to Mr Jorgensen if needed. The Court has not ever had before it any of the detail that Mr Jorgensen would be required to supply in a statement of affairs in the approved form. And on the assumption that leave to appeal is not required, these matters indicate that the appeal itself would have poor prospects.

62    Further, a consideration of the above issues points to the fact that the appeals are likely to involve many interlocutory steps and the potential marshalling of fresh evidence which will add to the cost and complexity of the appeals.

The risk that a costs order will not be satisfied

63    I am satisfied that there is a real risk that neither Mr Jorgensen nor his bankrupt estate would be able to satisfy an order for the costs of the appeals if he was unsuccessful. The failure of Mr Jorgensen to provide a statement of affairs coupled with the absence of any cogent evidence of substantial current assets, but only a substantial liability to Suncorp Bank together with other liabilities, readily supports this conclusion.

Whether an order for security would stultify the appeals

64    Courts are usually slow to make an order for security for the costs of a proceeding with some merit if to do so would likely stultify the proceeding. This consideration is discretionary, rather than a bar to making the order: Maher v Official Trustee in Bankruptcy [2013] FCA 1143 at [5] (Jessup J); Live Board Holdings Ltd v Cody Live Pty Ltd [2017] NSWCA 302 at [91]–[93] (Bathurst CJ, Leeming JA and Barrett AJA). Any prospect of stultification has a tempered significance in the case of Mr Jorgensen’s appeals, because he has already had the benefit of the first instance decisions: Tran v The Commonwealth [2009] FCA 921; 111 ALD 111 at [3]–[6] (Jagot J).

65    By his submissions Mr Jorgensen put in issue the question whether the appeals would be stultified if an order for security for costs was made. He made much of the fact that upon the making of the sequestration order his property vested in the trustee under s 58 of the Bankruptcy Act. However, it does not follow from this fact that the appeals would be stultified if an order for security for costs were made, as the circumstances referred to in Frigger v Kitay [2019] FCA 624 at [31]–[33] (McKerracher J) illustrate. Mr Jorgensen had to do more than merely assert stultification. To have a persuasive case on stultification in the circumstances of this case he had to adduce relevant and cogent evidence: see generally, Madgwick v Kelly [2013] FCAFC 61; 212 FCR 1 at [81] (Allsop CJ and Middleton J). Mr Jorgensen was uniquely placed to give a full and candid account of his financial position and to address by evidence whether he would be unable to secure funds to meet an order for security for costs. His silence on this issue is important. There was no statement by Mr Jorgensen in either of his affidavits that the appeals would be stultified if an order for security for costs was made, still less a candid and complete account of his financial affairs or evidence addressed to his ability to call upon family assets or trust property or assets held by the family company to which he adverted in his affidavit evidence. Against this background, Mr Jorgensen’s failure to file a statement of affairs is significant and weighs heavily against him. A failure to file a statement of affairs has been held to be relevant in other decisions to order security for costs: Du Bray at [36]–[37] (Flick J); BLG23 v BLH23, in the matter of BLG23 [2023] FCA 572 at [85] (Goodman J).

The interests of justice

66    Taking account of all the above considerations, I am persuaded that the making of an order for security in favour of JML would satisfy the requirements of justice. The appeal from the orders of Logan J seeks to raise questions that appear not to have been raised at first instance, and the ostensible appeal from the orders of Wheatley J has poor prospects in my estimation. There is a likelihood that the appeals will have complexities and will require interlocutory hearings. There is a prospect that the appeals will be pursued by Mr Jorgensen in the same manner in which he has pursued his litigation to date, involving multiple submissions and affidavits, some filed without leave, and requiring many attendances. I am satisfied that there is a real risk that Mr Jorgensen will not meet any order for costs of the appeals. Moreover, I am not satisfied that Mr Jorgensen has been candid in his evidence about his financial affairs, and he has not persuaded me by evidence that the appeals would be stultified if security for costs were ordered and he nonetheless desired to pursue the appeals in that circumstance.

The amount sought is reasonable

67    JML sought security in the amount of $30,000 on account of counsel’s fees and other disbursements. There was no submission by Mr Jorgensen that the amount is unreasonable. Having regard to the prospect that Mr Jorgensen will attempt to pursue the appeals in the same way he has pursued the proceedings below, including the filing or attempted filing of multiple documents and the indiscriminate use of artificial intelligence that was the subject of the findings of Wheatley J, I am satisfied that the sum of $30,000 is a reasonable sum.

Disposition

68    I will make an order that within 28 days Mr Jorgensen give security for JML’s costs of the appeals in the sum of $30,000 to be provided by payment into Court in proceeding QUD 205 of 2025 to be dealt with under r 2.42 of the Federal Court Rules. JML sought an order that security be provided within seven days, but I consider 28 days to be reasonable. The appeals in QUD 205 of 2025 and QUD 609 of 2025 will be stayed if the order is not complied with. JML sought to be heard on costs of the application. I will order that the application to adduce evidence be adjourned to a date to be fixed and that the costs to date of that application be reserved.

Associate:

Dated:    9 February 2026