Di Gregorio v Lumi Financial Pty Ltd

The background facts 6 In the primary judge's reasons (Di Gregorio v Lumi Financial Pty Ltd [2022] FCA 94) (J) her Honour set out some of the background facts at J[8]-[16]. In short: (a) on 19 June 2019 Lumi entered into a loan agreement with Efektiv Pty Ltd, in respect of which Ms Di Gregorio (who at all material times was a non-executive director of Efektiv) and others provided guarantees; (b) on 25 September 2019 Efektiv defaulted on the loan agreement. On 10 October 2019 Lumi sent a letter of demand to Efektiv and the guarantors but no payments were made in response; (c) on 14 November 2019 Lumi instituted proceedings in the Local Court, naming Ms Di Gregorio as the fifth defendant, seeking judgment in the sum of the outstanding loan amount plus interest and costs; (d) Ms Di Gregorio did not file a defence in the Local Court proceeding, and on 5 February 2021 a default judgment was entered in favour of Lumi against Ms Di Gregorio for the sum of $67,588.60; (e) on 2 September 2021 a bankruptcy notice was issued that was addressed to Ms Di Gregorio (the Notice); and (f) on 20 September 2021 Registrar Cridland made orders for substituted service of the Notice (the Orders). The Orders relevantly stated: 1 Service of Bankruptcy Notice No. BN 254129 issued 2 September 2021 and addressed to [Ms Di Gregorio] together with a sealed copy of this order may be effected by the following means: (a) by sending by pre-paid ordinary post addressed to [Ms Di Gregorio] at [her] […residential address]; (b) by handing to any person apparently over the age of sixteen years but, if this is not possible, by leaving in the letterbox or affixing to the front door in a sealed envelope addressed to [Ms Di Gregorio at her] […residential address]; and (c) by scanning and sending by email to [Ms Di Gregorio] at [her then solicitor's email address]. 2. Service in accordance with this order shall be deemed good and sufficient service of the Bankruptcy Notice upon [Ms Di Gregorio]. 3. The Bankruptcy Notice shall be deemed to have been served on [Ms Di Gregorio] on 30 September 2021. (Emphasis added.) 7 On the basis that the Notice was deemed to have been served on 30 September 2021, as provided by order 3, Ms Di Gregorio had 21 days from that date (i.e. until 21 October 2021) to comply with the notice before she was taken to have committed an act of bankruptcy pursuant to s 40(1)(g) of the Bankruptcy Act. She also had until 21 October 2021 to institute any proceeding to set aside the default judgment or to commence an application to set aside the Notice, in order to enliven the Court's power to extend the time for compliance with the Notice pursuant to s 41(6A) of the Bankruptcy Act. Ms Di Gregorio did not comply with the Notice by 21 October 2021, and the primary judge found that she did not institute a proceeding in the Local Court to set aside the default judgment until 22 October 2021 (although that finding is challenged in the appeal). It is not in contest that Ms Di Gregorio did not file an application in this Court to set aside the Notice until 4 November 2021. 8 In the meantime, on 16 December 2021, by consent of the parties the Local Court made orders to set aside the default judgment entered on 5 February 2021 (at J[19]). Also, on 4 February 2022, an alleged co-debtor of Ms Di Gregorio, Mr Shivesh Kuksal filed a summons in the New South Wales Supreme Court seeking judicial review of the default judgment (at J[63]). In the hearing before me, Ms Di Gregorio submitted that Mr Kuksal's summons seeks an order that the default judgment is a nullity.

The primary judgment 9 The primary judge's reasons may be summarised as follows. 10 Ms Di Gregorio submitted that the Notice should be set aside because it did not comply with the Orders. That argument turned on the meaning of the Orders, which specified three methods by which substituted service was to be performed and expressly stated that upon such performance the Notice was deemed to have been served on Ms Di Gregorio on 30 September 2021. In summary, she submitted that each of the three specified methods of service were required to be completed before service was deemed to have been achieved, and because she received the Notice in the post (as a result of one of the three methods of service) at 6pm on 11 October 2021, the effective date of service was 12 October 2021 (in accordance with the Federal Court Rules 2011 (Cth) (the Rules)) rather than 30 September 2021. 11 The primary judge did not accept those arguments and decided (at J[28]-[29]) that, as a matter of construction, the Orders prescribed three actions by which substituted service was to be effected, and that service was effected by those three actions being carried out in accordance with the Orders, not by the documents actually being received by Ms Di Gregorio. Lumi adduced evidence that it took steps to effect all three methods of service on 21 September 2021 which her Honour accepted. As a matter of practicality, her Honour also had regard (at J[31]) to the fact that although Ms Di Gregorio did not receive the posted documents until the evening of 11 October 2021, on her own evidence a process server dropped the documents at her feet at her residential address on 23 September 2021, and Lumi's solicitor emailed the documents to her solicitor on 21 September 2021. Thus, Ms Di Gregorio had received two copies of the Notice well prior to the receipt of the posted documents and the deemed date of service. 12 The primary judge found that the Notice was deemed to have been served on 30 September 2021, and that there was no non-compliance with the Orders which might justify setting aside the Notice (at J[34]). 13 Ms Di Gregorio also submitted that the Notice should be set aside on the basis that it did not comply with the following: (a) Section 41(2A) of the Bankruptcy Act, as it did not specify a 21 day period after service of the Notice for compliance, pursuant to the statutory period for compliance defined in s 5 of the Bankruptcy Act. The primary judge did not accept that submission (at J[37]), noting that the Notice, as amended by the Orders, expressly stated: You are required, within 21 days after 30 September 2021, to either: (a) pay to the creditor the amount of the debt claimed; or (b) make arrangements to the creditor's satisfaction for settlement of the debt. (b) Section 41(2) of the Bankruptcy Act and reg 9 of the Bankruptcy Regulations 1996 (Cth) (the Regulations), as it was not in the prescribed form. The primary judge did not accept that submission (at J[38]), noting that the Notice was in the prescribed form in Schedule 1 of the Regulations, and Ms Di Gregorio did not identify any suggested errors in the Notice. (c) Section 41(3)(a) of the Bankruptcy Act, as the default judgment on which the Notice was based was obtained improperly in one of several ways: fraudulently or in bad faith; in breach of Ms Di Gregorio's entitlement to natural justice; in breach of Ms Di Gregorio's equitable rights; in breach of Ms Di Gregorio's legitimate expectations; as a result of jurisdictional error, owing to Wednesbury unreasonableness (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223) on the part of the Registrar who made the default judgment; and owing to the failure of the Registrar to consider relevant matters in making the default judgment. The primary judge did not accept that submission (at J[41]). Her Honour noted that at the time the Notice was issued Lumi had obtained a default judgment against Ms Di Gregorio and it was entitled to rely on that judgment to issue the notice. Her Honour did not consider it appropriate to go behind the default judgment when determining whether the Notice complied with the requirements in s 41. Her Honour said that the authorities on which Ms Di Gregorio sought to rely in support of its submission that the Court should go behind the judgment concerned proceedings on a creditor's petition under s 52 of the Bankruptcy Act (e.g. Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132) and were not generally applicable to s 41 of the Bankruptcy Act. 14 Having decided that there was no reason to set aside the Notice, the primary judge turned to consider the alternative application for an extension of the time within which Ms Di Gregorio could comply with the Notice, pursuant to s 41(6A) of the Bankruptcy Act. That section provides: Where, before the expiration of the time fixed for compliance with a bankruptcy notice: (a) proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; or (b) application has been made to the Court to set aside the bankruptcy notice; the Court may, subject to subsection (6C), extend the time for compliance with the bankruptcy notice. As the primary judge noted (at J[46]), this section empowers the Court to extend the time for compliance with a bankruptcy notice where, before the expiration of the date for compliance (in the present case 21 October 2021), a proceeding to set aside the judgment in respect of which the notice was issued have been instituted by the debtor. 15 The primary judge found (at J[47]-[48]) that the evidence showed that Ms Di Gregorio lodged an application to set aside the default judgment with the Local Court Online Registry at 11:59pm on 21 October 2021. On 22 October 2021 at 12:03 am the Local Court notified Ms Di Gregorio, by way of an automatically-generated filing acceptance email, that the "filing date" of the application was 12:00 am on 22 October 2021. The question therefore arose as to when the application to set aside the default judgment was taken to have been filed. As the primary judge noted (at J[49]), rule 3.4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) which applies to civil proceedings before the Local Court, provided the answer. The relevant parts of that rule provide as follows: (3) A document that is filed by means of the Online Registry is taken to have been filed when the Online Registry gives notice of acceptance of the document. (4) Notice of acceptance of a document, and the date and time of the acceptance, is to be given, by means of Online Registry, to the registered user by whom the document was filed. (5) Despite a document being submitted to be filed by means of Online Registry, and notice of acceptance being given by Online Registry, the document may subsequently be rejected by the court if the document fails to comply with any substantial requirements of the approved form or the rules in relation to such a document. (Emphasis added.) 16 On that basis her Honour concluded (at J[51]) that Ms Di Gregorio's application to set aside the default judgment was instituted on 22 October 2021 and was therefore made outside the 21 day period permitted by s 41(6A)(a). 17 Her Honour said (at J[52]) that Ms Di Gregorio had until 21 October 2021 to either comply with the Notice, commence proceedings to set aside the judgment in respect of which the Notice was issued, or to make an application to set aside the Notice, and she had not taken any of those steps by the deadline. Thus, on 22 October 2021 Ms Di Gregorio committed an act of bankruptcy. 18 Her Honour further concluded (at J[53]) that as the institution of proceedings to set aside the default judgment or to set aside the Notice within the 21 day time limit are jurisdictional requirements, in circumstances where neither of those steps had been undertaken within time, the Court had no jurisdiction to entertain an application to extend the time for compliance with the Notice pursuant to s 41(6A). 19 Ms Di Gregorio then submitted that rr 1.32 and 1.34 of the Rules allowed the Court to dispense with the requirements of s 41(6A) of the Bankruptcy Act. The primary judge did not accept that submission and said (at J[55]) that the Rules are not a source of power to dispense with the requirements under the Bankruptcy Act, citing Nugawela v Deputy Commissioner for Taxation [2016] FCA 578 at [39] (McKerracher J). 20 Ms Di Gregorio also submitted that s 33ZF of the Federal Court of Australia Act 1976 (Cth) (FCA) would similarly allow the Court to make orders dispensing with the requirements of the Bankruptcy Act. The primary judge held (at J[54]) that s 33ZF only applies to representative proceedings commenced under Pt IVA of the FCA, and does not apply to the Bankruptcy Act. 21 Finally, the primary judge turned to consider whether the Court could otherwise set aside the Notice. Her Honour accepted (at J[56]-[57]) that a power to set aside the Notice is within the general powers of the Court under s 30(1) of the Bankruptcy Act, citing Re Sterling; Ex parte Esanda Ltd (Federal Court of Australia, Lockhart J, 2 June 1980); 30 ALR 77 at 82-3; Re Lentini; Ex parte Lentini v CSR Ltd (1991) 29 FCR 363 at 367-72 (Neaves J); Bryant v Commonwealth Bank of Australia (1994) 217 ALR 251. 22 In reliance on Australian Securities and Investments Commission v Forge [2003] FCAFC 274; 133 FCR 487 at [26]-[27] (Emmett J, with whom Branson and Stone JJ agreed), and Streimer v Tamas [1981] FCA 140; 37 ALR 211 at 218 (Sheppard J) referring to Re Grace (1931) 3 ABC 131, the primary judge said (at J[57]-[58]) that there is no express power to annul or set aside an act of bankruptcy once it had been committed. Her Honour referred with approval to the decision in Re Vella; Ex parte Seymour [1983] FCA 114; 67 FLR 287 at 288-289 (Morling J) (at J[59]-[60]). In that case the creditor had obtained a default judgment against the debtor in the District Court of NSW. The creditor served a bankruptcy notice on the debtor with a 14-day period for compliance. The debtor did not comply, nor did the debtor apply to have the default judgment or the notice set aside. After the time for compliance had elapsed, the debtor applied to have both the default judgment and the notice set aside. The default judgment was set aside, and Morling J had to consider whether the Court should set aside a bankruptcy notice founded on a judgment of another court that had subsequently been set aside. His Honour concluded that s 30(1) of the Bankruptcy Act did not empower the Court to set aside a bankruptcy notice in such circumstances, and the primary judge took the same view (at J[61]). Her Honour said that the Court does not have a discretion to set aside a validly issued bankruptcy notice where the time for compliance has expired and there has been an act of bankruptcy, as in the present case.

The draft notice of appeal 23 The draft notice of appeal alleges that the primary judge erred as follows: 1. Her Honour committed jurisdictional errors in: a. Failing to recognise the Court's authority and obligation to determine that the judgment debt upon which the Bankruptcy Notice was issued was enforceable in accordance with section 40(1)(g) of the Bankruptcy Act 1966 (Cth). b. Failing to exercise the Court's jurisdiction to look behind the judgment in circumstances where the Applicant had submitted and given unchallenged evidence that it was a nullity. c. Failing to recognise the Court's jurisdiction to amend or set aside the orders of a Registrar of the Court pursuant to sections 35(A)(5), 35(A)(6), 33ZF and 37M of the Federal Court of Australia Act 1976 (Cth) and rules 1.32 and 1.34 of the Federal Court of Australia Rules 2011 (Cth). d. Failing to recognise the Court's jurisdiction pursuant to section 30 of the Bankruptcy Act 1966 (Cth) to set aside the Bankruptcy Notice in order to prevent an abuse of the Court's process. e. Failing to recognise the Court's obligations pursuant to section 32 of the Charter of Human Rights and Obligations 2006 (Vic) to interpret all statutory provisions "in a way that is compatible with human rights". 2. Additionally, her Honour committed an error of law in finding without reliable evidence that "On 10 October 2019, Lumi sent a letter of demand to Efektiv and the guarantors, including Ms Di Gregorio". 3. Her Honour committed an error of law in determining that the Appellant had instituted proceedings in the Local Court of New South Wales to set aside the default judgment obtained by the Respondent on 22 October 2021. 4. Her Honour's decision had been affected by equitable fraud perpetrated by the Respondent and its solicitors.

The Relevant Principles 24 There are several sources of power to order a stay and the principles relevant to an application for a stay are well-established. 25 Rule 41.03 of the Rules provides that a party bound by a judgment or order may apply to the Court for an order that the judgment or order be stayed. Rule 36.08 provides that an appellant or an interested person may apply to the Court for an order to stay the execution of a proceeding until the appeal is heard and determined. Here, at the time I heard the application no appeal had been commenced, but Ms Di Gregorio undertook to commence an appeal within 14 days of judgment on the application. 26 The Rules confer a broad discretion on the Court, which does not require that special or exceptional circumstances be shown. Generally, there must be demonstrated "a reason or an appropriate case" to warrant the exercise of discretion in favour of granting a stay: Powerflex Services Pty Ltd v Data Access Corp [1996] FCA 460; 67 FCR 65 at 66 (Burchett, Heerey and Whitlam JJ). The onus is upon the applicant to demonstrate a proper basis for a stay. The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case so as to discharge the onus which the applicant bears. 27 The relevant considerations include: (a) whether there is an arguable point on the proposed appeal (see Nolten v Groenveld Australia Pty Ltd [2011] FCA 1494 at [24] (Kenny J)), or some "rational prospect of success" in relation to any of the grounds of appeal (see Burns v AMP Finance Ltd [2005] FCA 761 at [5] (Emmett J)); and (b) whether the balance of convenience favours the grant of a stay, which involves considering whether the appeal, if successful, will be rendered nugatory in the absence of a stay; and the prejudice to the other party should a stay be granted: Nolten and [24] and [30].

Proposed ground 1(a) 28 Ground 1(a) of the draft notice of appeal alleges that the primary judge erred in "[f]ailing to recognise the Court's authority and obligation to determine that the judgment debt upon which the bankruptcy notice was issued was enforceable in accordance with s 40(1)(g) of the Bankruptcy Act 1966 (Cth)". 29 There are several difficulties with this ground. 30 First, s 40(1)(g) of the Bankruptcy Act relevantly provides: (1) A debtor commits an act of bankruptcy…: … (g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time fixed for compliance with the notice; or (ii) where the notice was served elsewhere--within the time specified by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained. (Emphasis added.) 31 There can be no real question that at the time the Notice was issued that Lumi had obtained a "final judgment or final order" against Ms Di Gregorio. It was "a final judgment obtained in an action by which a previously existing liability of the defendant to the plaintiff is ascertained or established": Opie v Opie [1951] HCA 47; 84 CLR 362 at 372 (Dixon and Williams JJ). Nor can there be any question that, in the Local Court proceeding, Ms Di Gregorio was entitled to file any counter-claim, set-off or cross demand that she wished. 32 Ms Di Gregorio was required to comply with the Notice or to satisfy the Court as to the existence of a relevant counter-claim, set-off or cross demand by 21 October 2021. She did not do either. I can see no arguable error in the primary judge's conclusion that Ms Di Gregorio did not, within the time specified in the Notice, comply with the Notice. 33 Second, having considered Ms Di Gregorio's written submissions before the primary judge, she did not argue that she had a counter-claim, set-off or cross demand equal to or exceeding the amount of the default judgment that she could not have set up in the Local Court proceeding. She cannot, without leave, bring an appeal based on a ground she did not argue below, and she did not flag any application for leave to do so. 34 Third, before me, doing the best I can with the confused submissions that were made Ms Di Gregorio did not assert the existence of such a counter-claim, set-off or cross demand. She has the onus to establish an arguable case and she did not satisfy it. 35 Fourth, the real difficulty with this ground is that it seeks to elude the essential basis of the decision below. The primary judge found that the Notice was issued based on the default judgment Lumi obtained against Ms Di Gregorio; that the Notice was deemed to be served on her on 30 September 2021; that Ms Di Gregorio did not comply with the Notice within the 21 day time limit; and that the Court had no jurisdiction to set aside the Notice after an act of bankruptcy had occurred. Further, the primary judge found that Ms Di Gregorio did not institute a proceeding to set aside the default judgment or apply to set aside the Notice within the 21 day time limit in s 41(6A), and thus there was no jurisdiction to extend the time for compliance with the Notice. I can see no arguable error with those conclusions. 36 In my view this ground of appeal is not reasonably arguable.

Proposed ground 1(b) 37 Ground 1(b) of the draft notice of appeal alleges that the primary judge erred in failing to exercise the Court's jurisdiction to look behind the judgment in circumstances where Ms Di Gregorio had submitted and given unchallenged evidence that it was a nullity. 38 Before the primary judge Ms Di Gregorio referred to a number of authorities which establish that in a proceeding on a creditor's petition seeking a sequestration order, the Court must be satisfied that, in truth, the alleged debtor is indebted to the petitioning creditor as asserted: see e.g. Compton. Section 52(1)(c) of the Bankruptcy Act provides that the Court may make a sequestration order against the debtor's estate only if it is satisfied that "the debt or debts on which the petitioning creditor relies is or are still owing". Section 52(2) provides that if the Court is not satisfied with the proof in that regard it may dismiss the petition. 39 The primary judge noted Ms Di Gregorio's various arguments as to why the default judgment was improperly obtained (at J[39]), but determined that it was not appropriate to go behind the default judgment when determining whether the Notice complied with the various requirements in s 41 of the Bankruptcy Act. Her Honour accepted (at J[42]) that, in the context of a creditor's petition seeking sequestration of assets, the principles relating to going beyond a judgment are enlivened by s 52 and the requirement that the Court be satisfied as to the existence of the debt. But her Honour said those principles are not generally applicable to s 41 and did not provide a basis to aside the Notice. 40 I can see no reasonably arguable error in her Honour's conclusions in this regard.

Proposed ground 1(c) 41 Ground 1(c) of the draft notice alleges that the primary judge erred in failing to recognise the Court's jurisdiction to amend or set aside the orders of a Registrar of the Court pursuant to ss 35(A)(5) and (6), 33ZF and 37M of the FCA and rr 1.32 and 1.34 of the Rules. 42 This proposed ground has no merit whatsoever. These submissions were made below in the context of an application to extend the time for Ms Di Gregorio to comply with the Notice, pursuant to s 41(6A) of the Bankruptcy Act. The primary judge found that the Court did not have jurisdiction to extend the time under s 41(6A) because Ms Di Gregorio had not, within the 21 day time period, either instituted a proceeding to set aside the default judgment or commenced an application to set aside the Notice. 43 Rule 1.32 empowers the Court to make any order it considers appropriate in the interests of justice and r 1.34 permits the Court to dispense with compliance with any of the Rules. The contention that the Rules are a source of power to dispense with the requirements under s 41(6A) of the Bankruptcy Act has no merit. 44 Section 33ZF of the FCA provides that in any proceeding under Part IVA, which relates to representative proceedings, the Court may, of its own motion or on application by a party or a group member, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding. Plainly, Ms Di Gregorio's application was not a proceeding under Part IVA and therefore s 33ZF has no application; this ground is misconceived. 45 Sections 35A(5) and (6) of the FCA provide that a party to a proceeding in which a Registrar has exercised a power to, relevantly, make an order for substituted service, may apply to the Court to review that exercise of power, and on such an application the Court may make such orders as it thinks fit. The basis of this proposed ground is not apparent to me, because it does not appear that Ms Di Gregorio ever made an application to review the Orders of Registrar Cridland. Nor, other than restating the terms of those provisions, did the written submissions below state how these provisions were said to be applicable. Before me, nothing was said about the applicability or relevance of ss 35A(5) and (6) of the FCA. In circumstances where there was no application for review of the Orders I cannot see any arguable case based on these provisions. 46 More fundamentally, what happened in the present case is that Ms Di Gregorio did not comply with the Notice within the 21 day time limit after it was deemed to be served on her on 30 September 2021. An act of bankruptcy therefore occurred pursuant to s 40(1)(g) and the primary judge concluded that the Court then had no jurisdiction to set aside the Notice. I can see no arguable error in that conclusion. Further, Ms Di Gregorio did not apply to set aside the default judgment or the Notice within the 21 day time limit and the primary judge concluded that there was no jurisdiction to extend the time for compliance with the Notice pursuant to s 41(6A). I can see no arguable error in that conclusion. It is not clear to me where this ground of appeal goes. 47 Finally, ss 37M and 37N of the FCA set out the overarching purpose of the civil practice and procedure provisions: to facilitate the just resolution of disputes according to law and as quickly inexpensively and efficiently as possible; and the obligation of parties to act consistently with that purpose. Again, the basis of this proposed ground is not apparent to me. Other than restating the provisions, the written submissions below did not address this ground, and before me nothing was said in relation to this ground. I cannot see how ss 37M and 37N can operate to cure the lack of jurisdiction the primary judge found, nor how they assist Ms Di Gregorio's argument.

Proposed ground 1(d) 48 Ground 1(d) of the draft notice of appeal alleges that the primary judge erred by failing to recognise the Court's jurisdiction under s 30 of the Bankruptcy Act to set aside the Notice to prevent an abuse of the Court's process. 49 The primary judge recognised (at J[56]-[57]), that although the Bankruptcy Act does not expressly provide that the Court has power to set aside a bankruptcy notice, it is established that the Court has such power pursuant to s 30(1) of the Act. Section 30(1) confers a broadly-based facultative power giving the Court power, within the limits of its jurisdiction to be found elsewhere, to make such orders as it considers are necessary for the purposes of carrying out and giving effect to the Act. The words used are not words of limitation but extension; they are to be generously construed: Vale v Sutherland [2009] HCA 26; 237 CLR 638 at [19] (Gummow, Hayne, Heydon, Crennan and Kiefel (as her Honour then was) JJ); Coshott v Prentice [2014] FCAFC 88; 221 FCR 450 at [93] (Siopis, Katzmann and Perry JJ); Forge at [26]. 50 There is some authority for the proposition that, after an act of bankruptcy has occurred, the Court has power under s 30 to set aside a bankruptcy notice if it is established that the notice is somehow invalid. For example, in Re Pollard; Ex parte Lensing Management Co Pty Ltd [1991] FCA 823; 23 FCR 284 at 286 Gummow J said that "a bankruptcy notice is a nullity if it fails to meet a requirement made essential by the Act, or if it could reasonably mislead a debtor as to what is necessary to comply with the notice, and in such cases the notice is a nullity whether or not the debtor is in fact misled." His Honour found (at 286) that the bankruptcy notice in that case was a nullity because it was drawn to require payment "to the satisfaction of the Federal Court of Australia" and did not inform the debtor of the possibility of payment being secured to the satisfaction of the creditor only. His Honour described that as a matter of substance which could not be regarded as a mere formal defect or irregularity. 51 In Budimir v McMahon [2000] FCA 1312 at [7] Merkel J said that "[a]n act of bankruptcy can only occur in respect of a bankruptcy notice that is a valid notice. An act of bankruptcy could not be committed in respect of a bankruptcy notice that is invalid and therefore a nullity." His Honour found that the bankruptcy notice in that case, which had been issued in the name of a deceased person, was a nullity and therefore could not give rise to an act of bankruptcy. In Brookfield v Yevad Products Pty Ltd [2002] FMCA 82; 192 ALR 111 at [7]-[12], Raphael FM reviewed the authorities and concluded (at [12]) that "[i]f the Court can set aside a bankruptcy notice by declaring it a nullity, even where an act of bankruptcy has taken place, it cannot be held restrained from doing so between the time at which the act of bankruptcy is committed and the hearing of the [creditor's] petition". 52 However, Ms Di Gregorio fell well short of establishing some serious defect in the Notice such that it is reasonably arguable that it is a nullity. Ms Di Gregorio's written submissions below [AS] show that she advanced the following arguments, none of which in my view have any substance: (a) at AS[17], that the judgment debt against Ms Di Gregorio is also the subject of Mr Kuksal's proceeding in the NSW Supreme Court in which he seeks the dismissal of the proceeding in which Lumi had obtained the default judgment against Ms Di Gregorio. That may be accepted, but institution of that appeal does not mean that the default judgment against Ms Di Gregorio did not constitute a valid basis for the Notice at the time it was issued, or at the time Ms Di Gregorio failed to comply with it; (b) at AS18, that the letter of demand sent by Lumi to Ms Di Gregorio was sent to the wrong address. That does not take matters far. It is appropriate to infer that the default judgment entered against Ms Di Gregorio was based on an affidavit of service filed in the Local Court proceeding and did not depend on whether or not any letter of demand was sent. Even if no letter of demand was sent that would not mean that there was no proper basis for the default judgment such that the judgment was a nullity and cannot be the basis for the issue of the Notice; (c) at AS18 and (d), that the Local Court proceeding was brought by way of a statement of claim when, on Ms Di Gregorio's argument, the UCPR required that it be commenced by way of summons. Assuming that the use of a statement of claim was incorrect, I am not persuaded that it is reasonably arguable that means that the default judgment is a nullity and cannot be the basis for the issue of the Notice; (d) at AS18, that Lumi obtained a default judgment in reliance on a rule that only applied in relation to a liquidated claim, and that Lumi's claim, which was for the loan principal plus interest, was not a liquidated claim. Ms Di Gregorio's submissions said nothing about how such a debt could not reasonably be classified as "liquidated", and nothing was submitted before me to make out this contention; (e) at AS18, that the affidavit sworn in support of the application for default judgment was not sworn by an officer of Lumi, in accordance with r 35.3 of the UCPR. Again, nothing was put forward before me to indicate why or how the affidavit was not compliant with the UCPR, but assuming that to be so, I am not persuaded that it is arguable that means that the default judgment is a nullity. It might mean that the judgment was liable to be set aside, as it later was, by consent, but that is quite different to it being a nullity. 53 In short, Ms Di Gregorio's attempts to point to a defect in the Notice or the default judgment underpinning it, have no apparent merit. In the circumstances I can see no reasonably arguable error in the primary judge's conclusion (at J[61]), based on the decision in Vella, that by failing to comply with the Notice within the 21 day time limit such that an act of bankruptcy occurred, the Court had no jurisdiction to set aside the Notice. As French J (as his Honour then was) said in Re Duckworth v Ex parte Lockett [1987] FCA 55 at 16, "the scheme of the Bankruptcy Act is quite inconsistent with the existence of a power to set aside a bankruptcy notice after the time for compliance with that has expired and no extension has been granted". Nor can I see arguable error in the primary judge's conclusion that because Ms Di Gregorio did not institute a proceeding to set aside the default judgment or the Notice by 21 October 2021, the Court had no jurisdiction to extend the time for compliance with the Notice pursuant to s 41(6A).

Proposed ground 1(e) 54 Ground 1(e) alleges that the primary judge erred by failing to recognise the Court's obligations pursuant to s 32 of the Charter of Human Rights and Obligations 2006 (Vic) (the Victorian Charter of Human Rights) to interpret all statutory provisions "in a way that is compatible with human rights". 55 There are questions as to whether the Victorian Charter of Human Rights applies to the interpretation of Commonwealth legislation such as the Bankruptcy Act but those issues were not argued before me. This ground was not raised in Ms Di Gregorio's application or written submissions below, nor was it raised in submissions before me. Ms Di Gregorio has the onus to show that the proposed ground is reasonably arguable in order to be granted a stay and she did not meet it. Further, Ms Di Gregorio cannot, without leave of the Court, advance a ground of appeal that was not argued below and no application for leave was either flagged or made.

Proposed ground 2 56 Ground 2 alleges that the primary judge erred in finding (at J[10]) without reliable evidence that "[o]n 10 October 2019, Lumi sent a letter of demand to Efektiv and the guarantors, including Ms Di Gregorio." 57 Assuming for the sake of the argument that the primary judge was wrong in that finding, nothing turns on it. The default judgment entered against Ms Di Gregorio on 5 February 2021 was not based on whether or not she had earlier been sent a letter of demand, and the answer to that question did not affect the outcome of her application to set aside the Notice or to extend the time for compliance with the Notice.

Proposed ground 3 58 Ground 3 alleges that the primary judge erred in determining that Ms Di Gregorio instituted proceedings to set aside the default judgment in the Local Court on 22 October 2021, rather than 21 October 2021. 59 Before me, Ms Di Gregorio said nothing in written or oral submissions to explain the basis of this proposed ground of appeal. As the primary judge noted (at J[48]), Ms Di Gregorio sought to rely on an automatically-generated Online Registry filing acceptance email which showed that she lodged the application to set aside the default judgment with the Online Registry at 11:59pm on 21 October 2021. But her Honour found that the automatically generated response confirming that lodgement was sent at 12:03 am on 22 October 2021 and described the "filing date" as "22 October 2021 12:00AM". The primary judge concluded (at J[51]) that, by application of r 3.4(3) of the UCPR, the time of filing a document which is filed with the Online Registry is the date and time that the document is accepted, being 12.00 am on 22 October 2021, rather than the time that the document was uploaded or submitted to the Online Registry. That conclusion is supported by rr 3.4(4) and (5), which respectively provide that: it is the date and time of the acceptance that is to be given to the registered user, not the time of receipt or uploading; and a document is "submitted to be filed", indicating that the document is not filed until an action, i.e. acceptance, is taken by the Registry. 60 On that basis her Honour concluded that Ms Di Gregorio's application to set aside the default judgment was instituted on 22 October 2021, outside the 21 day period required by ss 5 and 41(6A)(a) of the Bankruptcy Act. Thus the Court had no jurisdiction to extend the time for compliance with the Notice. 61 In submissions before me, Ms Di Gregorio did not point to any error her Honour's construction of r 3.4 of the UCPR and I can see no reasonably arguable error in it.

Proposed ground 4 62 Ground 4 alleges that the primary judge's decision was affected by "equitable fraud perpetrated by the Respondent and its solicitors." However, Ms Di Gregorio said nothing in oral or written submissions to establish how or why this was so. Ms Di Gregorio has the onus to establish an arguable case in order to be granted a stay, and she did not meet it.

Balance of convenience 63 Given that the proposed appeal grounds are not reasonably arguable, it is strictly unnecessary for me to determine whether the balance of convenience weighs in favour of granting a stay. However, against the event I am wrong in that view, I now turn to explain my opinion in respect of the balance of convenience. 64 Ms Di Gregorio describes herself as a businesswoman in her affidavit. Although she did not state this it appears from her affidavit that she is a chartered accountant by profession. She deposes that: (a) from 1995 to 2018 she worked for Telstra Corporation Ltd in various roles which culminated in her appointment in 2014 to the position of Director of Finance Consumer; (b) from 2008 and a 2020 she was a member of the finance and risk management committee of Health Purchasing Victoria, a state government agency responsible for sourcing medical equipment for government run clinics and hospitals in Victoria; (c) from 2019 to October 2021 she worked as the Chief Financial Officer of the Salvation Army; (d) in 2015 she was appointed as Treasurer of Women's Health West, a charity with over a thousand members supporting victims of domestic violence. In 2017 she was appointed Chair of the board of that organisation and she continues in that capacity. While that is a volunteer role it is an important one; (e) from 2018 onwards she has been on the board of several privately owned companies in addition to a working as a visiting lecturer at Chartered Accountants Australia and New Zealand, the peak body for Chartered Accountants in Australia and New Zealand; and (f) following the conclusion of her role as CFO at the Salvation Army she has been considering a number of prospective employment opportunities with private and public institutions. 65 Ms Di Gregorio says that unless the orders of the primary judge are stayed she will be required to disclose that she has committed an act of bankruptcy to Women's Health West and to any prospective employer. She says doing so will imperil her ability to remain in the position as Chair of Women's Health West and reduce her ability to obtain employment. Against that, there is also no evidence that granting a stay will have any adverse effect on Lumi, which has already consented to setting aside the default judgment and is now taking steps to obtain a fresh judgment. 66 Based on this, Ms Di Gregorio contends that the balance of convenience favours the grant of a stay. At first blush that submission is not without force, as one can readily see how Ms Di Gregorio being found to have committed an act of bankruptcy may adversely affect her employment prospects and her position. 67 However, this contention fails to grapple with the fact that the occurrence of an act of bankruptcy is not the result of the primary judge's orders; instead it is the result of Ms Di Gregorio's failure to comply with the Notice within the 21 day time limit such that an act of bankruptcy occurred by operation of s 40(1)(g) of the Bankruptcy Act. It must be kept in mind that the only orders made by the primary judge were to dismiss the application to set aside the Notice or alternatively, to extend the time for compliance with the notice, and for Ms Di Gregorio to pay Lumi's costs. A stay of those orders will not change the fact that by operation of s 40(1)(g) Ms Di Gregorio is taken to have committed an act of bankruptcy on 22 October 2021. Ms Di Gregorio's status as a person who has committed an act of bankruptcy will remain the same whether or not a stay is granted, and I therefore do not see that refusal of a stay means that she will suffer detriment in the manner she asserts.

Other matters 68 The application was heard on 14 February 2022 and the parties were informed that judgment was reserved. On the morning of 16 February 2022, Mr Peter Ansell of Erudite Legal, Ms Di Gregorio's solicitors, sent an email to chambers advising that he had been instructed to bring a "relevant development" with "significant implications" to the urgent attention of the Court. He requested time to put on further evidence of this development. 69 Having regard to the fact that the hearing had concluded, and that Lumi did not consent, I did not allow Ms Di Gregorio to put on any further evidence.

Conclusion 70 For these reasons it is appropriate to dismiss the application for a stay of the primary judge's orders. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Murphy.