DECISION
20 A debtor commits an act of bankruptcy if he or she does not, within the time specified by the notice, satisfy the Court that he or she has a "counter-claim, set-off or cross demand" within the terms of s 40(1)(g) of the Bankruptcy Act. Section 40(1)(g) provides as follows:
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 specified in the notice; or
(ii) where the notice was served elsewhere - within the time fixed for the purpose 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.
21 Section 40(1)(g) is to be read with s 41(7) which provides that:
Where, before the expiration of the time fixed for compliance with the requirements of a bankruptcy notice, the debtor has applied to the Court for an order setting aside the bankruptcy notice on the ground that the debtor has such a counter-claim, set-off or cross demand as is referred to in paragraph 40(1)(g), and the Court has not, before the expiration of that time, determined whether it is satisfied that the debtor has such a counter-claim, set-off or cross demand, that time shall be deemed to have been extended, immediately before its expiration, until and including the day on which the Court determines whether it is so satisfied
22 The principles applicable to s 40(1)(g) were not in dispute. In order to come within that section, an applicant must satisfy the Court that he or she has a counter-claim, set-off or demand equal to or exceeding the amount of the judgment debt or sum payable under the final order that could not have been set up in the action or proceeding in which the judgment or order was obtained. Although the applicant does not have to satisfy the Court that he or she will succeed in that claim, the applicant must satisfy the Court that there is sufficient substance to the counter-claim, set-off or cross-demand asserted to make it one which the applicant should, in justice, be permitted to have heard and determined in the usual way, rather than be forced to comply with the bankruptcy notice by payment or to commit an act of bankruptcy: Dekkan v Evans [2008] FCA 1004; Glew v Harrowell (2003) 198 ALR 331; [2003] FCA 373 at [12].
23 For the following reasons Ms Luck has not shown that she has a counter-claim, set-off or cross demand within the meaning of s 40(1)(g) of the Bankruptcy Act.
24 First, the counter-claim, set-off or cross demand stipulated in s 40(1)(g) must be something sounding in money: that is, it must be in respect of a money demand, whether liquidated or unliquidated: see Re Jocumsen (1929) 1 ABC 82 at 85 (per Henchman J); Vogwell v Vogwell (1939) 11 ABC 83 at 85 (per Latham CJ); Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 30 ALR 433; [1980] FCA 78. The constitutional issues relied on by Ms Luck, even if resolved in her favour, would not sound in a monetary award to Ms Luck. The only claim made by Ms Luck which would sound in a monetary award is her claim for costs, as part of the orders that she seeks in her proposed appeal.
25 Secondly, the counter-claim, set-off or cross demand stipulated by s 40(1)(g) must exist at the time when the application to set aside the bankruptcy notice is heard: Re Ganke; ex parte Ganke v Somerset [1995] FCA 195 at [32]. Ms Luck does not have a presently existing counter-claim, set-off or cross-demand in respect of costs because her claim for costs is contingent upon a successful appeal and an order for costs being made in her favour. A counter-claim, set-off or cross-demand has not been created merely because Ms Luck would seek an order for costs on her appeal if special leave is granted and the appeal successful: Re Thompson; Ex parte Thompson v Grimley Pty Ltd (1995) 61 FCR 544 at 552.
26 Thirdly, it is impossible to quantify the counter-claim set off or cross demand that Ms Luck asserts that she has, and therefore she has not shown that such a claim would equal or exceed the sum of $29,755.87.
27 Fourthly, the only judgment and orders which can be the subject of challenge by Ms Luck by her proposed appeal are the judgment and orders made in VID 1158/2013. A successful appeal against the judgment and orders made in VID 1158/2013 would not entitle Ms Luck to orders setting aside or quashing the orders made in VID 54/2009 or VID 899/2009 or entitle her to costs orders in her favour in substitution for the costs orders that were made in those other proceedings. Ms Luck cannot reopen and relitigate VID 54/2009 or VID 899/2009 which both have been brought to conclusion and the appeal she wishes to bring from the judgment and orders made in VID 1158/2013 would not result in the extinguishment of her liability for the debt on which the bankruptcy notice is founded.
28 Accordingly, as Ms Luck does not have counter-claim, set-off or cross-demand within the meaning of s 40(1)(g) of the Bankruptcy Act, I accept the contention for USQ that there would be no utility in staying or adjourning Ms Luck's application to set aside the bankruptcy notice pending the determination of her special leave application. Ms Luck's application to for a stay or adjournment of her application and her application to set aside the bankruptcy notice should both be dismissed.
29 In her application to set aside the bankruptcy notice, Ms Luck also sought an extension of time for compliance with the bankruptcy notice for at least 90 days following the determination of this application. The application for an extension of time should also be refused. The only source of the Court's power to extend the time for compliance with a bankruptcy notice is s 41(6A) of the Bankruptcy Act which provides as follows:
(6A) Where, before the expiration of the time fixed for compliance with the requirements of 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) an 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.
See too s 41(7) which provides that the time for compliance with a bankruptcy notice is extended when an application is made to set aside the notice on the basis of a counter-claim, set-off or cross demand as referred to in s 40(1)(g). Section 41(6A)(a) does not assist Ms Luck. If, and in so far as, Ms Luck seeks to rely on her application for special leave and proposed appeal as constituting an application to set aside the costs order on which the bankruptcy notice is founded, that reliance is misconceived and wrong in law. Section 41(6A)(b) likewise does not assist Ms Luck. Since extensions of time for compliance are in aid of applications to set aside (Re Ganke; Ex parte Ganke and Somerset [1995] FCA 195 at [44]) and since Ms Luck's application to set aside the bankruptcy notice should be dismissed, there is no basis for any further extension of time for compliance with the bankruptcy notice.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.