Federal Court of Australia

Lamb v Karageozis (Trustee), in the matter of the Bankrupt Estate of Lamb [2026] FCA 901

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s application for leave to appeal be dismissed.

2.    The applicant pay the respondents’ costs of that application.

3.    The applicant’s application for a stay of the sequestration order made on 9 February 2023 be dismissed.

4.    The applicant pay the respondents’ costs of that application.

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

REASONS FOR JUDGMENT

JACKMAN J:

Introduction

1    This is an application for leave to appeal from the decision of the primary judge in Karageozis (Trustee), in the matter of the Bankrupt Estate of Lamb [2026] FCA 164 (the Primary Judgment or PJ). The application contains 18 grounds, and comprises some 39 pages, most of which is in the nature of submissions, which I have treated as such. The application was accompanied by an affidavit of Ms Lamb dated 11 March 2026, annexing a draft notice of appeal comprising some 20 pages, which also sets out Ms Lamb’s submissions.

2    On 1 May 2026, I gave Ms Lamb an opportunity to amend her application for leave to appeal and her draft notice of appeal, which she has not taken up. At that time, Ms Lamb appeared to have been generously offered representation by a barrister on a pro bono basis, and the hearing today was set to meet the barrister’s anticipated convenience in light of some serious personal difficulties. Ms Lamb has informed me that the barrister is unfortunately not available by reason of a grave medical condition. On 19 June 2026, Ms Lamb requested that I make a referral for pro bono assistance, which I duly did. It appears that the referral has not as yet been successful, and Ms Lamb has been unable to obtain legal representation for today’s hearing.

3    At the outset of today’s hearing, Ms Lamb applied for an adjournment. Ms Lamb’s grounds for adjournment are the unavailability of counsel to represent her and her claimed inability to represent herself. It is unfortunate that Ms Lamb has not been able to obtain the services of a barrister, but I do not regard that as a sufficient ground for an adjournment, particularly in circumstances where Ms Lamb represented herself before the primary judge. As to her claimed unfitness to represent herself, Ms Lamb relies on a one-line medical certificate by a Dr Lu dated 19 June 2026 to the effect that Ms Lamb has an unspecified medical condition and is not fit to file documents. Ms Lamb also relies on an affidavit by Dr Amanda Gearing, who is not a medical practitioner but says that she is an investigative journalist and an expert in coercive control. That evidence is not sufficient to justify an adjournment. My own observation from Ms Lamb’s conduct of her adjournment application for over half an hour is that she is well able to represent herself. Ms Lamb also relied on steps which she had taken with a view to having her bankruptcy annulled, and other circumstances relating to her bankruptcy, but I do not regard those matters as particularly relevant to whether there should be an adjournment of her application for leave to appeal.

4    Accordingly, I refused the adjournment application.

Salient reasons of the Primary Judge

5    Before the primary judge, Ms Lamb applied for an order that the sequestration order made on 10 February 2023 by Logan J be set aside and declared void, together with orders that no further steps be taken pursuant to the sequestration order pending the final determination of that application. That application was made by Ms Lamb by way of interlocutory application filed on 7 April 2025 (PJ at [2]) in proceedings commenced by her trustee in bankruptcy on 28 October 2024 (PJ at [1]).

6    The circumstances giving rise to the sequestration order were as follows. On 9 June 2020, Mr Sherman (being the petitioning creditor) filed proceedings seeking damages for defamation in the District Court of Queensland against Ms Lamb. On 3 August 2021, Ms Lamb filed an interlocutory application to strike out the defamation proceedings, which was dismissed on 12 August 2021: Sherman v Lamb [2021] QDC 192. Ms Lamb’s appeal against the strike-out decision was also dismissed: Lamb v Sherman [2021] QCA 290. On 29 March 2022, after a costs assessment, Ms Lamb was ordered to pay Mr Sherman’s costs of the strike-out application in the amount of $64,199.91 (the Costs Order). On 22 April 2022, the Official Trustee issued a Bankruptcy Notice requiring Ms Lamb to pay to Mr Sherman the amount of $64,199.91 (the Bankruptcy Notice). On 15 June 2022 at 4.37 pm, being seven minutes after the period fixed for compliance with the Bankruptcy Notice had ended, Ms Lamb lodged an application and affidavit challenging the Bankruptcy Notice.

7    On 16 June 2022, after the final day for compliance with the Bankruptcy Notice, Mr Sherman lodged a creditor’s petition. On 7 July 2022, the District Court of Queensland ordered that enforcement of the Costs Order be stayed until seven days following the determination of the defamation proceeding, including the costs of that proceeding. On 14 July 2022, a Registrar of this Court extended the time for compliance with the Bankruptcy Notice to 6 October 2022, and a further extension was then made to 24 November 2022. Ms Lamb’s application to set aside the Bankruptcy Notice was heard on 24 November 2022, and it was dismissed on 8 December 2022. On 23 September 2022, judgment was entered against Ms Lamb in the defamation proceeding in the amount of $10,000: Sherman v Lamb [2022] QDC 215.

8    On 8 February 2023, Mr Sherman’s creditor’s petition was heard by Logan J. Justice Logan noted that Ms Lamb had tendered monies towards the costs found to be owing by her, but said that the amount tendered would neither satisfy the debt in full nor bring it below the threshold at which a Bankruptcy Notice and later creditor’s petition might proceed in a court exercising bankruptcy jurisdiction: Sherman v Lamb [2023] FCA 168 at [13]. His Honour considered the various formal requirements and discretionary matters, and concluded that a sequestration order should be made against the estate of Ms Lamb.

9    On 17 February 2023, Ms Lamb filed a notice of appeal against the sequestration decision, which was dismissed by the Full Court on 25 May 2023: Lamb v Sherman [2023] FCAFC 85; (2023) 298 FCR 79.

10    On 15 December 2023, the Court of Appeal allowed Ms Lamb’s appeal in the defamation proceeding, and ordered Mr Sherman to pay Ms Lamb’s costs of the defamation appeal but did not disturb the Costs Order and invited submissions from the parties in respect of costs.

11    The primary judge, after reciting the background to the dispute, rejected Ms Lamb’s attempt to rely on a 150-page affidavit which had been provided to the petitioning creditor and trustee at 5pm on the day before the hearing: PJ at [15]–[22]. The primary judge then expressed the view that Ms Lamb was precluded from prosecuting much of her claim on the basis of principles of issue estoppel, Anshun estoppel or res judicata: PJ at [25]–[29]. The primary judge said that there were only four issues of substance remaining which Ms Lamb could properly ventilate: PJ at [29].

12    The first of those issues was whether the Bankruptcy Notice was based on an interlocutory costs order which did not constitute a “final judgment or final order” as required by s 41(3)(a) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). The primary judge referred to r 740 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) which has the effect that a costs order of a Registrar of the District Court, after assessment, takes effect as a judgment of the District Court: PJ at [36]–[37]. The primary judge then referred to a number of authorities which favoured the view that such an order was a final order, including Worchild v The Drink Nightclub (Qld) Pty Ltd [2005] FCAFC 240; (2005) 224 ALR 339 and Francis v Eggleston Mitchell Lawyers Pty Ltd [2014] FCAFC 18. The primary judge was satisfied that a costs order of the District Court directing the payment of money finally determines the parties’ rights in respect of that issue, and is a final order for the purposes of ss 40(1)(g) and 41(3)(a) of the Bankruptcy Act: PJ at [45].

13    The primary judge then dealt with the issue whether there was any contravention by either Mr Sherman, or the trustee in bankruptcy, of the stay ordered by the District Court, and found that the Bankruptcy Notice had been issued on 22 April 2022 before the stay order was made on 7 July 2022, and thus the conduct of the petitioning creditor did not contravene the stay: PJ at [46]–[52].

14    The primary judge then dealt with the issue whether the sequestration order ought to be set aside for some other reason of public interest or justice, and held that it should not be: PJ at [53]–[63].

15    The primary judge then dealt with Ms Lamb’s application for a stay of enforcement of the sequestration order made by Logan J on 10 February 2023, and refused that application: PJ at [64]–[67].

16    Accordingly, the primary judge dismissed Ms Lamb’s application with costs: PJ at [68]–[70].

Should Leave to Appeal be granted?

17    It is well established that two criteria need to be satisfied in granting leave to appeal: first, whether the judgment was attended with sufficient doubt to warrant it being reconsidered by the Full Court; and second, whether substantial injustice would result if leave were refused: Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 at [2] (Sheppard, Burchett and Heerey JJ).

18    The central issue before the primary judge was an application pursuant to s 153B of the Bankruptcy Act for a discretionary decision whether to annul Ms Lamb’s bankruptcy. The principles governing annulment are well settled, and involve the Court considering first whether the sequestration order ought not to have been made, and then if so, whether in the exercise of discretion the bankruptcy should be annulled; and the Court is entitled to consider not only the case as disclosed at the time when the sequestration order was made but also those facts now known then to have existed: Heinrich v Commonwealth Bank of Australia [2003] FCAFC 315 at [20] (Carr, Finn and Sundberg JJ); Rigg v Baker [2006] FCAFC 179; (2006) 155 FCR 531 at [61] (French J, with whom Spender J agreed). I will deal in turn with each of the 18 grounds relied upon by Ms Lamb for seeking leave to appeal.

19    Ground 1 is headed “Substantive Injustice” and appears to be directed to the second of the criteria referred to above for the grant of leave to appeal, rather than being a substantive ground of appeal. I am prepared to accept that Ms Lamb’s bankruptcy has had a substantial adverse effect on her which may well be alleviated if the bankruptcy were annulled. However, Ms Lamb must also satisfy the first criterion for leave to appeal, and I do not regard any of the matters referred to in relation to Ground 1 as going to that question. The fact that she was ultimately successful in the defamation proceedings, and her complaints about Mr Sherman’s motivation in bringing the defamation proceeding and engaging in other conduct, are not relevant to the annulment application. To the extent that Ms Lamb’s complaints might support a submission that the defamation proceedings were an abuse of process, that was a matter which should have been raised before Logan J if it were to be relied upon.

20    Ground 2 alleges error in the application of s 40 of the Defamation Act 2005 (Qld). That provision deals with matters to which the court either may or must have regard in awarding costs in defamation proceedings. Ms Lamb contends that the costs order which underlay her bankruptcy was not enforceable because r 740 of the UCPR detracts from the uniform operation of the Bankruptcy Act across the various States of Australia. However, r 740 merely provides for the result of a costs assessment to take effect as a money judgment, and s 79 of the Judiciary Act 1903 (Cth) (Judiciary Act) provides relevantly that the procedural law of each State shall apply where the court is exercising federal jurisdiction in the particular State, subject to any contrary law made by the Parliament. Ms Lamb also contends that the primary judge failed to address an argument that s 40 of the Defamation Act 2005 (Qld) operated to render the costs order contingent and unenforceable through the bankruptcy regime, but that argument is plainly incorrect as s 40 cannot conceivably be construed as having that effect. Ms Lamb further contends that r 740 of the UCPR is inconsistent with the Bankruptcy Act and is invalid by reason of s 109 of the Constitution, on the supposed basis that r 740 expands the class of orders capable of founding a Bankruptcy Notice beyond those that would otherwise qualify. However, the Bankruptcy Act does not define what amounts to a “final order” or “final judgment”, and whether an order is to be treated as final depends on its legal effect. In my view, Ground 2 has no realistic prospect of success.

21    Ground 3 alleges a failure to comply with s 78B of the Judiciary Act. This ground contends that the primary judge’s determination was affected by jurisdictional error because the primary judge proceeded without notice having been given to the Attorneys-General under s 78B of Ms Lamb’s arguments in relation to s 109 of the Constitution and r 740 of the UCPR. Ms Lamb says that the argument was raised before the primary judge, although that does not appear to me to be correct. In any event, even if Ms Lamb had raised this supposed constitutional matter before the primary judge, any failure to observe s 78B does not nullify the continued existence of jurisdiction: Glennan v Commissioner of Taxation [2003] HCA 31; (2003) 198 ALR 250 at [13] (Gummow, Hayne and Callinan JJ). Moreover, I regard the constitutional point sought to be made by Ms Lamb as trivial or unarguable, and on that basis s 78B was not engaged merely because Ms Lamb asserts that the proceedings involved a matter arising under the Constitution or involving its interpretation: see Panesar v Attorney-General (Commonwealth) [2025] FCA 477 at [44] (Feutrill J), where the relevant authorities are helpfully collected. Accordingly, there is no realistic prospect of Ground 3 succeeding.

22    Ground 4 alleges that, but for the unanimously overturned erroneous judgment of the District Court, Ms Lamb would not be bankrupt, and that injustice was allegedly compounded by Logan J having made a sequestration order against an unrepresented person appearing against senior counsel after an adjournment was refused. In my view, the fact that Ms Lamb ultimately succeeded in the underlying defamation proceedings is irrelevant, as the Costs Order arose from the separate matter concerning Ms Lamb’s unsuccessful attempt to have the defamation proceedings struck out as an abuse of process. That order was not disturbed by the Court of Appeal. As to Logan J’s refusal to adjourn the hearing of the creditor’s petition, that argument was not raised before the primary judge, and the appropriate forum for a complaint about Logan J’s refusal to adjourn the hearing was in Ms Lamb’s appeal to the Full Court from Logan J’s decision. Accordingly, I do not regard Ground 4 as having any realistic prospect of success.

23    Ground 5 contends that the primary judge erred in applying Anshun estoppel on the basis that that principle is incompatible with the s 153B jurisdiction which Ms Lamb submits expressly requires the Court to consider facts not before the Court making the sequestration order that were in existence at the time the order was made. I do not regard there as being any such incompatibility. If an applicant for annulment was aware of a matter that could have been raised in opposition to the making of a sequestration order, and it was unreasonable for that person not to do so, an Anshun estoppel may well preclude reliance on that matter in the annulment proceedings. Accordingly, I do not think that Ground 5 has any realistic prospect of success.

24    Ground 6 contends that the Costs Order was vitiated by fraud. However, the primary judge identified that issue as a matter which Logan J had already considered (PJ at [28]), and found that Ms Lamb was precluded from raising that issue on her annulment application. Moreover, the matter does not appear to have been raised on appeal from Logan J’s decision to the Full Court. Further, Ms Lamb has previously attempted to have the Costs Order set aside on the ground of fraud by application to the District Court of Queensland, which was dismissed on 23 April 2026. Accordingly, there is no merit in Ground 6.

25    Ground 7 seeks to contend that the primary judge erred in failing to apply the principle in Ahern v Deputy Commissioner of Taxation (1987) 76 ALR 137. However, in that case, the debtor applied for an adjournment of the hearing of the creditor’s petition on the basis that a tax appeal against the same debts which founded the petition was on foot in the Supreme Court of Queensland, and the primary judge refused to adjourn the petition. The Full Court overturned that decision, observing that it was well established that, in general, a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, provided that the appeal is based on genuine and arguable grounds: at 148 (Davies, Lockhart and Neaves JJ). By contrast, in the present case there was no appeal pending against the order relied on as the foundation of the bankruptcy proceedings, as the appeal concerned a different judgment to that which underlay the creditor’s petition. In any event, the time to raise Ahern was in the appeal to the Full Court from the decision of Logan J. Accordingly, Ground 7 has no realistic prospect of success.

26    Ground 8 contends that the Costs Order was not a “final order” for the purposes of ss 40(1)(g) and 41(3)(a) of the Bankruptcy Act. However, the Costs Order was final, because it conclusively dealt with the parties’ rights regarding who was to pay the costs of Ms Lamb’s strike-out application, and r 740 of the UCPR made it plain that the Costs Order was enforceable. No error has been shown in the conclusion reached by the primary judge, and Ground 8 has no realistic prospect of success.

27    Ground 9 concerns the effect of the Full Court’s decision on the appeal from Logan J’s decision. This ground appears to be based on two propositions. The first appears to be that the primary judge erred in having regard to the Full Court’s decision in considering the application of the principle of Anshun estoppel and res judicata. That complaint has no merit, as the Full Court’s decision was plainly relevant to the preclusionary principles preventing re-litigation. The second is a submission that the Full Court erred in its consideration of Guss v Johnstone (2000) 171 ALR 598. However, the Full Court’s decision binds the parties by way of res judicata or Anshun estoppel, irrespective of whether it was correctly decided. Accordingly, there is no merit in Ground 9.

28    Ground 10 contends that the primary judge erred in failing to address the principle derived from Sarks v Cassegrain [2015] FCAFC 38 to the effect that costs orders are final orders for bankruptcy purposes only where the orders make a final declaration of the liability of the parties and do not reserve any power for further judicial consideration on liability. However, the Costs Order was a final order in that sense, and was neither provisional nor did it require further consideration to take effect or to be enforceable. Accordingly, Ground 10 has no merit.

29    Ground 11 seeks to contend that it is in the public interest to annul Ms Lamb’s bankruptcy by reason of “weaponisation of bankruptcy as instrument of coercive control”. This ground appears to seek to impugn Mr Sherman’s motivation for pursuing the defamation proceedings and Ms Lamb’s bankruptcy. I do not regard those complaints as relevant to Ms Lamb’s annulment application, and I do not see any merit in Ground 11.

30    Ground 12 alleges error in the decision of the primary judge not to admit Ms Lamb’s 150-page affidavit which was served the day before the hearing before the primary judge. The primary judge dealt with that matter in detail (PJ at [15]–[22]), and the primary judge’s reasoning strikes me as an entirely sound exercise of discretion on a matter of practice and procedure. Ground 12 has no realistic prospect of success.

31    Ground 13 alleges procedural unfairness arising from the rejection of Ms Lamb’s 150-page affidavit. Ms Lamb submits that she attempted to file that affidavit electronically on 13 June 2025 (being three days before the hearing), although the deadline under the primary judge’s case management orders was 7 April 2025 (PJ at [15]). In any event, Ms Lamb did not raise any difficulty with the electronic filing system at the hearing before the primary judge. Accordingly, Ground 13 has no realistic prospect of success.

32    Ground 14 complains that the primary judge refused an application for an adjournment for Ms Lamb to obtain legal representation. However, the oral application for an adjournment of the hearing was made at a relatively late stage (being towards the end of Ms Lamb’s oral submissions), without any evidence as to when she had sought representation or the length of any adjournment that might be required. Accordingly, the primary judge’s decision to refuse an adjournment was an entirely sound exercise of discretion, and Ground 14 has no realistic prospect of success.

33    Ground 15 alleges an abuse of process in the conduct of the underlying defamation proceedings and in the conduct of the bankruptcy proceeding before Logan J by reason of Mr Sherman’s rejection of a monetary tender by Ms Lamb. The primary judge correctly rejected the relevance of both matters: PJ at [28]. The proper forum to raise complaints about the conduct of the defamation proceeding was in the defamation proceeding, or perhaps before Logan J. As to the monetary tender, the primary judge correctly held that the issue had been considered by Logan J, and that his finding in that regard was conclusive. Accordingly, Ground 15 has no realistic prospect of success.

34    Ground 16 makes complaints concerning the conduct of the trustee in bankruptcy. Those complaints could not affect whether Ms Lamb’s bankruptcy ought to have been annulled. Accordingly, Ground 16 has no realistic prospect of success.

35    Ground 17 contends that the Australian Financial Security Authority (the AFSA) was a necessary party before the primary judge because Ms Lamb’s application involved a challenge to the legal validity of a specific exercise of statutory power by the Official Receiver. However, Ms Lamb did not apply to join the AFSA before the primary judge or otherwise suggest that the AFSA was a necessary party. She has now conceded that the AFSA does not need to be a party to this application for leave to appeal. In general, it is not necessary for the Official Receiver to be a party to every proceeding brought under the Bankruptcy Act, particularly where the Official Receiver acted on the basis of information supplied by creditors who are the proper respondents to proceedings under the Act. Accordingly, there is no realistic prospect of Ground 17 succeeding.

36    Ground 18 contends that Ms Lamb was solvent at the time the sequestration order was made. Ms Lamb sets out matters which she claims establish her solvency as at 9 February 2023. However, even if Ms Lamb could demonstrate that she was solvent as at February 2023, that would not have led to any different result before the primary judge. Even taking Ms Lamb’s submissions at their highest, the Court must consider solvency not only at the time of the sequestration order, but also at the time of the annulment application: Thredgold v Fyfe Pty Ltd [2013] FCA 1363 at [39] (White J). Further, a demonstration of solvency as at 9 February 2023 would not realistically have led to any different result given the very lengthy period between then and the annulment application, the absence of any proposal to pay all provable debts in full, and the absence of any undertaking to pay the costs of the petitioning creditor and trustee: see Phillips v Carrafa [2025] FCA 870 at [92] (Hill J). Accordingly, Ground 18 does not have reasonable prospects of success.

Conclusion

37    It follows that Ms Lamb’s application for leave to appeal should be dismissed with costs.

38    Ms Lamb has applied for a stay of enforcement of the sequestration order made on 10 February 2023. I ordered on 11 May 2026 that that application be heard with the application for leave to appeal. That application is supported by an affidavit of Ms Lamb dated 29 April 2026. In light of my decision that the application for leave to appeal should be dismissed, the stay application should also be dismissed. No appeal lies from a refusal of leave to appeal, and thus there is no question of ordering a stay pending any further appellate proceedings: see Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424 at 431 (Bowen CJ, Lockhart and Sheppard JJ).

Associate:

Dated:    9 July 2026