FEDERAL COURT OF AUSTRALIA Biritz v National Australia Bank Ltd [2001] FCA 1635 BANKRUPTCY – application to extend time for compliance and set aside bankruptcy notice – review of Registrar's decision to dismiss application – bankruptcy notice founded on an order as to taxation which channelled two costs orders – whether bankruptcy notice relied on more than one judgment debt – debtor claimed orders were procured by fraud – whether Court should go behind judgment debt – whether any fresh evidence of fraud – whether debtor had a counter-claim, set-off or cross demand which could not have been set up in the proceeding in which the costs order was made Bankruptcy Act 1966, s 30, s 40(1)(g), s 41 Federal Court of Australia Act 1976 (Cth), s 35A(5), s 35A(6) Federal Court Rules, O 77, r 8 Re Kwiatek and Kwiatek (1989) 21 FCR 374 referred Gray v Ball (unreported, Federal Court of Australia, Sundberg J, 24 December 1997) referred Martin v Commonwealth Bank of Australia [2001] FCA 87 referred Olivieri v Stafford (1989) 24 FCR 413 referred Re Sterling; Ex parte Esanda Ltd (1980) 30 ALR 77 referred Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310 referred Re Hutchins; Ex parte Wall (unreported, Federal Court of Australia, Spender J, 6 May 1998) referred Wenkart v Abignano [1999] FCA 354 referred Cummings v Raeffaele (2000) 175 ALR 107 applied Emerson v Wreckair Pty Limited (1992) 33 FCR 581 cited Kirk v Ashdown [1999] FCA 522 cited Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 cited Ebert v The Union Trustee Company of Australia Limited (1960) 104 CLR 346 referred Re Zakrzewski (2000) 178 ALR 694 referred James v Abrahams (1981) 34 ALR 657 referred Re Brink; Ex parte The Commercial Banking Company of Sydney Ltd (1980) 44 FLR 135 referred Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183 referred Smart v Esanda Finance Corporation Limited [2000] FCA 235 referred ERIKA BIRITZ v NATIONAL AUSTRALIA BANK LIMITED V 7079 of 2001 KENNY J 20 NOVEMBER 2001 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 7079 OF 2001 BETWEEN: ERIKA BIRITZ Applicant AND: NATIONAL AUSTRALIA BANK LIMITED Respondent JUDGE: KENNY J DATE OF ORDER: 20 NOVEMBER 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The application for review of the decision of the Registrar made 18 September 2001 be refused. 2. The application for an order setting aside the bankruptcy notice (VN 1305/01) be dismissed. 3. The application for an order extending the period for compliance with the bankruptcy notice be dismissed. 4. The motion, notice of which was filed 4 October 2001, be otherwise dismissed. 5. The application filed on 3 September 2001 be otherwise dismissed. 6. The applicant pay the respondent's costs of the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 7079 OF 2001 BETWEEN: ERIKA BIRITZ Applicant AND: NATIONAL AUSTRALIA BANK LIMITED Respondent JUDGE: KENNY J DATE: 20 NOVEMBER 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT the application 1 On 11 August 2001, the respondent, National Australia Bank Limited ("the Bank") served a bankruptcy notice (VN 1305/01) on the applicant, Mrs Erika Biritz. The notice was issued pursuant to s 41 of the Bankruptcy Act 1966 ("the Act"). By the bankruptcy notice, the Bank claimed that Mrs Biritz owed it a debt of $14,295.90. A schedule to the notice stated that the debt consisted of a judgment or order in the amount of $14,131.25 and "interest accrued since the date of judgment or order" in the amount of $164.65. Copies of authenticated orders made by the Supreme Court of Victoria ("the Supreme Court") accompanied the notice. 2 On 3 September 2001, Mrs Biritz applied in this Court to set aside the bankruptcy notice issued against her. The application was supported by an affidavit sworn by her on 3 September 2001, together with a number of exhibits. Mr L A Fox, a solicitor for the Bank, swore an affidavit in opposition on 14 September 2001. On 18 September 2001, a Registrar of the Court dismissed Mrs Biritz's application with costs. 3 On 4 October 2001, Mrs Biritz filed a notice of motion in the Court seeking, amongst other things, an order that the Registrar's order of 18 September 2001 be set aside. The motion was supported by an affidavit sworn by Mrs Biritz on 4 October 2001. 4 At the hearing of the matter on 22 October 2001, Mrs Biritz appeared in person and the Bank, by counsel. The parties relied on the affidavits tendered before the Registrar. Mrs Biritz also relied on her affidavit of 4 October 2001. Although the motion before the Court purported to be made pursuant to O 35 r 7(2)(b) of the Federal Court Rules ("the Rules"), it was treated as an application under subss 35A(5) and (6) of the Federal Court of Australia Act 1976 (Cth) and O 77, r 8 of the Rules, for review of the Registrar's decision of 18 September 2001. A review of this kind is by way of a hearing de novo: see Re Kwiatek and Kwiatek (1989) 21 FCR 374; Gray v Ball (unreported, Federal Court of Australia, Sundberg J, 24 December 1997) 2; and Martin v Commonwealth Bank of Australia [2001] FCA 87 at [6]. procedural history 5 There have, it seems, been numerous proceedings between Mrs Biritz and her husband, George, on the one hand, and the Bank on the other. 6 In this proceeding, Mr Fox deposed that: The Respondent held mortgages over [two properties known as 39 Kembla Street, Cheltenham and Lot 54 Springvale Road, Keysborough]. … In Supreme Court proceedings commenced by the Respondent it obtained default judgment for an order for possession of the Cheltenham land on 25 January, 1991. [This was proceeding No 11688 of 1990 in the Supreme Court.] In second Supreme Court proceedings commenced by the Respondent it obtained an order for possession of the Keysborough land on 1 December, 1993. [This was proceeding No 8042 of 1990 in the Supreme Court.] Such order was appealed by George Biritz to the Honourable Mr Justice Harper who dismissed the appeal with costs on 1 February, 1994. George Biritz then appealed such Judgment to the Full Court which dismissed the appeal and ordered costs against George Biritz on 5 April, 1995. Between 1995 and 1999, there were various other proceedings in this Court to which Mr George Biritz and the Bank were parties. 7 The evidence in this Court showed that, on 30 November 2000, Mrs Biritz filed an originating motion in the Supreme Court, seeking orders against the Bank, including orders that "the Plaintiff … is entitled to reinstatement of the land" known as 39 Kembla Street Cheltenham and Lot 54 Springvale Road, Keysborough. This was proceeding No 7819 of 2000 in the Supreme Court. On 18 January 2001, the Bank made application in that proceeding for summary judgment under Supreme Court Rules O 23.01. On 5 February 2001, the Bank made application, also in that proceeding, to set aside a subpoena for the production of documents addressed to the Bank at Mrs Biritz's behest. 8 The Bank was successful in both applications. On 7 February 2001, Master Evans of the Supreme Court ordered that the proceeding upon the originating motion be dismissed, and that Mrs Biritz pay the Bank's costs of the proceeding "including the costs of this application as between Solicitor and client". Also on 7 February 2001, Master Evans ordered that the subpoena for production addressed to the Bank be set aside, and that Mrs Biritz pay the Bank's costs of the application "as between Solicitor and client". On 26 June 2001, Master Cain allowed the Bank the sum of $14,131.25 as taxed costs. applicant's submissions 9 In ex tempore reasons for judgment, the Registrar stated that the grounds relied upon by the applicant in support of her application were set out in pars 6 and 7 of her affidavit sworn 3 September 2001. In this affidavit, Mrs Biritz deposed as follows: 6. For the following reasons and relevant facts the Bankruptcy Notice should be set aside: (a) The Respondent, NAB did not have any legal capacity or statue to make issue a Bankruptcy Notice for an alleged sum of $14,295.90, as at no time material obtained or held a Final Order or a Final Judgement obliging me the said Erika Biritz to pay the sum of $14,295.90 or any sum whatsoever, (See Principal requirements pursuant of the Bankruptcy Act 1966, s.40(1)(g).) (b) The Bankruptcy Notice wrongly asserted that I the said Erika Biritz was effectively indebted to the NAB; (c) Wrongly described the NAB as a creditor; 7. Alternatively, I was deprived from raising in the proceedings my counter-claim as a direct result of the Respondent's failure to apply for a payment of taxed costs with the deliberate intention to place me in an unfair and unjust position. 8. The Respondent continues in an ignorant and disrespectful manner and unusual ways in its legal proceedings, and it could not be realistically accepted that they can deny having in possession and being very well aware of my existing counter-claim. Notwithstanding the fact of the matter that the mentioned existing counter-claim has been already filed with the Federal Court back in November, 1998 under proceeding No VG 7513 of 1998. … 12. The Respondent's latest action with this current Bankruptcy Notice is yet another attempt represented by its officers to work and support each other to either cover up a huge bank fraud and/or collectively benefit from my family's demise which is a prima facie conspiracy. 10 At the hearing on 22 October 2001, Mrs Biritz's principal submission was that the bankruptcy notice should be set aside on the ground that the orders made by the Supreme Court on 7 February 2001 and 26 June 2001 were "procured by fraud". As already noted, on 22 October 2001, she supported her application by a further affidavit. This consisted of some twenty pages (excluding exhibits). In summary, Mrs Biritz submitted that: (1) In the Supreme Court, in connection with the Bank's application to set aside the subpoena issued to it, a solicitor for the Bank had deposed that there was "no requirement that [the Bank] create or issue a Power of Attorney in order for [his] firm to act" and that there was no such Power of Attorney in existence. According to Mrs Biritz, this was directly contradicted by the same solicitor in an affidavit sworn in proceedings in this Court. (2) In relation to the land at Cheltenham and Supreme Court proceeding No 11688 of 1990: (a) the main defendant, Axiom Pumps Pty Ltd, was not the owner of the land, and the Bank "has never been registered as a secured credit provider for that company"; (b) the default judgment dated 25 January 1991 "failed to identify the name of a Supreme Court Justice who … handed down [the] judgment against the named defendant Axiom Pumps Pty Ltd"; and (c) the land was sold for $390,000 in December 1991 whereas an offer of $600,000 had been made in August 1989. (3) In relation to the Keysborough land and Supreme Court proceeding No 8042 of 1990: (a) although Mrs Biritz was a joint owner of the property, the Bank had, on 26 June 1990, "issued a writ for an alleged mortgage breach over the Keysborough property seeking possession only of the property from Mr George Biritz named as Defendant solely"; (b) from 1990 to 1993, the Bank failed to "proceed in the Supreme Court with their claim"; (c) an affidavit filed on behalf of the Bank exhibited a falsified "Title Deed being Certificate of Title Volume 9507 Folio 768" and "Mortgage document allegedly signed by Mr Biritz for the favour of the [Bank] on 15 June 1987"; (d) the judgment of the trial judge delivered on 1 February 1994 was based on "fraudulent misstatements of material facts"; and (e) the land was sold for less than its market value. (4) Master Evans had no jurisdiction to hear and determine the application for summary judgment that resulted, on 7 February 2001, in an order dismissing the proceeding instituted by Mrs Biritz by way of originating motion. (5) The bill of costs relied on by the Bank before Master Cain contained items which related to "various Federal Court proceeding materials having previously tendered as evidence with the Federal Court of Australia in the name of NAB v George Biritz or [vice versa]". Further, Mrs Biritz "had not been served with the Certificate of Taxation". (6) Accounting for the proceeds of the sale of the properties was inadequate, and the Bank had not paid certain costs to Mr George Biritz. respondent's submissions 11 In response to Mrs Biritz's submission that she had a counter-claim, set-off or cross demand, counsel for the Bank submitted: The applicant apparently seeks to show that she has an arguable counter-claim, set-off or cross demand by relying on evidence filed before Master Evans in the Supreme Court proceeding number 7819 of 2000. It was in that proceeding that the costs order in favour of the respondent, upon which the bankruptcy notice is founded, was made. However, to fall with section 41(7), the applicant must show an arguable counter-claim, set-off or cross demand which could not have been raised in the Supreme Court proceeding. The costs order was made in the proceeding in which the counter-claim, set-off or cross demand has already been alleged. That proceeding was dismissed. Accordingly, the debtor cannot bring herself within section 41(7); not only could she have raised the cross-claim before Master Evans, she in fact did raise the cross-claim. Further, the debtor is unable to demonstrate that the cross-claim is arguable, as it was judicially determined by its dismissal and is now res judicata. No appeal has been instituted from the order of Master Evans dismissing the Supreme Court proceeding and awarding costs. 12 Responding to Mrs Biritz's submission regarding fraud, the Bank submitted that, although an allegation of fraud might be relevant to "the exercise of the court's discretion in whether or not it made a sequestration order", it was irrelevant to the current application to set aside the bankruptcy notice. Counsel submitted: [W]hether or not there's been an act of bankruptcy is a jurisdictional matter which is not one that the court can … go behind in the sense of taking into [account] discretionary or other considerations. There either has been an act of bankruptcy or there hasn't and in this case the only way of Mrs Biritz avoiding that conclusion … is pursuant to section 41(7), to assert that she has a set-off or cross-claim. Counsel further submitted that, even if the Court could take the allegations of fraud into account, the claim had not "been made out on a prima facie basis". Nor was it "one which has a sufficient prospect of succeeding". 13 The respondent submitted finally: There is no merit in any submission by the applicant that the bankruptcy notice, being founded on two orders for costs, is invalid. The taxing order of Master Cain channelled those orders into one order upon which the bankruptcy notice may be founded (Commonwealth Bank of Australia v Horvath (1999) 161 ALR 441 at 444-445 per Finkelstein J). consideration of submissions More than one judgment debt 14 The Court has jurisdiction to set aside a bankruptcy notice by virtue of s 30(1) of the Act, where such an order is necessary for the purposes of carrying out or giving effect to the Act in a particular case: see Olivieri v Stafford (1989) 24 FCR 413 at 430 per Gummow J. Further, the express power in s 41 of the Act to extend time for compliance with the requirements of a bankruptcy notice has been said to carry with it the power to set aside the notice itself: see Re Sterling; Ex parte Esanda Ltd (1980) 30 ALR 77 at 83, referred to in Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310 at 311-312; Re Hutchins; Ex parte Wall (unreported, Federal Court of Australia, Spender J, 6 May 1998) and Wenkart v Abignano [1999] FCA 354 at [22]. 15 A bankruptcy notice may be set aside if it relies on more than one judgment debt. As Moore J said in Cummings v Raeffaele (2000) 175 ALR 107 at [2]: There is now a consistent line of authority in this court that a bankruptcy notice is a nullity if it relies on more than one judgment debt: see most recently, Owners of Strata Plan No 5459 v Mason (1999) 91 FCR 92; Commonwealth Bank of Australia v Horvath (Junior) (1999) 161 ALR 441 …; GPW Aussi Exports v Latin (1998) 85 FCR 324 … and Catalano v Commonwealth Bank of Australia (Fed C of A, Sundberg J, 3 July 1997, BC9703156, unreported) …. While the decision of Beaumont J in Illawarra Credit Union Ltd v Olejniczak (Fed C of A, 26 May 1998, BC9802465, unreported) is to the contrary, the solicitor appearing for the judgment creditor did not suggest that I decline to follow this line of authority. 16 In this case, the bankruptcy notice is based on two costs orders in respect of which there was one taxation producing a single assessment of the costs to be paid. In these circumstances, decisions in this Court establish that the two orders for costs are "channelled" into the one order as to taxation, and the bankruptcy notice is valid. This line of authority was also explained and applied by Moore J in Cummings v Raeffaele. At [16], his Honour said: In Re Wheeler (a debtor) [1982] 1 WLR 175 and Catalano, bankruptcy notices were held valid where it was found that several costs orders had been 'channelled' into one order by a common certificate of taxation. The possibility that several orders can be 'channelled' into one order which may found a valid bankruptcy appeared to be left open in Re Stephenson; Ex parte Cintee Nominees Pty Ltd (1988) 18 FCR 375 … and Re Gardiner (Fed C of A, Wilcox J, 20 March 1991, unreported), and was affirmed in Re Walker; Ex parte Noble Einsiedel Pty Ltd (Fed C of A, Northrop J, 16 April 1992, unreported). In Horvath, Finkelstein J accepted (at 445) that 'channelling' was an accurate description of what happened in Re Wheeler, but disagreed with the notion that a certificate of taxation can have the effect of reconstituting several costs orders into one order for the purposes of a bankruptcy notice. However, his Honour noted the need for uniformity of decision-making by judges at first instance administering bankruptcy laws, and indicated that he would not therefore depart from the line of authority founded by Re Wheeler. Adopting this analysis, the order made by Master Cain on 26 June 2001 "channelled" the two costs orders made on 7 February 2001 by Master Evans in favour of the Bank against Mrs Biritz. I accept the respondent's submission that the bankruptcy notice is not invalid for this reason. Judgment procured by fraud 17 As already noted, at the hearing on 22 October 2001, Mrs Biritz submitted that the orders with which the bankruptcy notice is concerned, were procured by fraud. In Emerson v Wreckair Pty Limited (1992) 33 FCR 581 at 587-588, the Full Court of this Court observed: It is not open to doubt that a court exercising jurisdiction in bankruptcy may, in an appropriate case, 'go behind' a judgment and inquire whether it was founded on a real debt: Corney v Brien (1951) 84 CLR 343; Wren v Mahony (1972) 126 CLR 212; Olivieri v Stafford (1989) 24 FCR 413, per Beaumont J (at 422-423). Such a court, however, has no power to set aside a judgment but only to prevent the judgment creditor from having recourse to the provisions of the Bankruptcy Act: see Re Vitoria [1894] 2 QB 387; King v Henderson [1898] AC 720. As between the parties, the judgment remains unimpeached and may be enforced accordingly by whatever means may otherwise be available. 18 In Wenkart v Abignano [1999] FCA 354 at [23]-[24] the Full Court confirmed that: It is not open to doubt that a court exercising jurisdiction in bankruptcy may, in an appropriate case, 'go behind' a judgment and enquire whether it was founded on a 'real debt': Corney v Brien (1951) 84 CLR 343, at 347; Wren v Mahony. This principle is not confined to a case where judgment is founded on an antecedent liquidated debt, but extends to cases where the debt relied on in the bankruptcy notice or creditor's petition is created by the judgment. This is the case, for example, where a claim for unliquidated damages in tort is the subject of a judgment in favour of the creditor: In re Newman; Ex parte Brooke (1876) 3 Ch D 494 (CA). Thus the rule is sometimes said to be 'that the Court of Bankruptcy can inquire into the consideration for a judgment debt': Ex parte Kibble; In re Onslow (1875) LR 10 Ch App 373, at 376, cited in Corney v Brien, at 347. The court exercising bankruptcy jurisdiction has no power to set aside the judgment and does not destroy the res judicata effect of the judgment as between the parties to it: J L Goldring,"Going Behind a Judgement" (1973) 47 ALJ 377, at 379. The court's powers are limited to preventing a judgment creditor having recourse to the provisions of the Bankruptcy Act: Emerson v Wreckair Pty Ltd (1992) 33 FCR 581 (FC), at 587-588. A bankruptcy court does not go behind a judgment as a matter of course: Wren v Mahony, at 222-223. It is entitled to do so where there has been 'fraud, collusion or miscarriage of justice', while consent and default judgments are viewed 'with suspicion': Petrie v Redmond (1942) 13 ABC 44, at 48-49, per Philp J; Corney v Brien, at 348. These are not the only circumstances in which a court will exercise its power to go behind the judgment, but caution is to be exercised where the judgment results from 'a fully heard contest between parties': Wren v Mahony, at 224. Bearing in mind these observations, I reject the Bank's submission that, on an application to set aside a bankruptcy notice, the Court cannot consider whether the relevant judgment or order was fraudulently obtained. 19 Allegations of fraud were indirectly raised in this proceeding in the affidavit sworn by Mrs Biritz on 3 September 2001. This affidavit referred generally to "misleading and deceptive material" and included a statement that the bankruptcy notice was an attempt by the Bank's officers to "either cover up a huge bank fraud and/or collectively benefit from my family's demise which is a prima facie conspiracy". Mrs Biritz made further allegations of fraud in her affidavit sworn 4 October 2001. I refer, for example, to pars 12 to 14 (concerning the Bank's application to set aside a subpoena); pars 15 to 22 (concerning the 7 February 2000 order, pursuant to which the proceeding on originating motion was dismissed); pars 24 and following (relating to proceedings concerning Mr Biritz.) I note too Mrs Biritz's allegations regarding the bill of costs relied on by the Bank before Master Cain (a copy of which was provided to the court). Each of these matters could have been raised in the proceeding in the Supreme Court, either before Master Evans or Master Cain, or before a judge or another Master of the Supreme Court. 20 As Kiefel J observed in Kirk v Ashdown [1999] FCA 522 at [16]: In proceedings to set aside a judgment obtained by fraud, while it is unnecessary to show that the evidence relied on in that connexion would be admissible on the issues between the parties to the action leading to the judgment in question, it is nevertheless necessary to establish the fraud as 'directly material' to the judgment: McDonald v McDonald (1965) 113 CLR 529, 532; Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (No 2) (1992) 37 FCR 234, 242, such that if it had been received at trial, then in all probability, the judgment would have been reversed: Monroe Schneider 244. Evidence relating to a collateral issue, such as credit, may then lack the necessary materiality: McDonald 532; Monroe Schneider 242. The evidence must be 'fresh', previously unavailable. In Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264, 272 the Full Court held, in connexion with the making of a sequestration order, that whilst it is not the task of a bankruptcy Court to set aside a judgment procured by fraud, it is appropriate for it to be guided by the principles which govern such a proceeding, although in an appropriate case the Court might apply a more flexible approach. 21 Counsel for the Bank referred to Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538, where Kirby P said: [I]t must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment … . Kirby P added that the claimant must establish that the new facts are "so evidenced and so material that it is reasonably probable that the action will succeed"; and that "the mere allegation, or even the proof, of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment": Wentworth v Rogers at 539. 22 Bearing in mind these principles, there is no basis shown for the Court to go behind any order made in the Supreme Court. Mrs Biritz has not shown that she has new facts that, alone or in conjunction with other evidence, would justify the Court in going behind such an order. Counter-claim, set-off or cross demand 23 Mrs Biritz also maintained that she had "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" within the meaning of s 40(1)(g) of the Act. She submitted that, for this reason, the bankruptcy notice should be set aside. 24 At the hearing on 22 October 2001, it became apparent that Mrs Biritz's claims fell into two categories: (1) claims relating to the possession by the Bank of the Cheltenham and Keysborough properties (Supreme Court proceeding No 11688 of 1990 and No 8042 of 1990), the sale of these properties by the Bank, and the accounting for the sale proceeds; and (2) claims that the orders made on 7 February 2001 and 26 June 2001 in Supreme Court proceeding No 7819 of 2000 were procured by fraud. (The reference in Mrs Biritz's affidavit of 3 September 2001 to proceedings in this Court (being VG 7513 of 1998) was to an application made by Mr George Biritz against the Bank on 13 July 1998 which was dismissed by Marshall J on 16 July 1999.) 25 Section 40(1)(g) requires a debtor who is served with a bankruptcy notice either to comply with the requirements of the notice, or to satisfy the court that the debtor has a counter-claim, set-off or cross demand which equals or exceeds the amount of the judgment debt. The debtor cannot satisfy the Court that he or she has a cross demand "by showing no more than that she propounds one and states how she suggests that she can make it out": see Ebert v The Union Trustee Company of Australia Limited (1960) 104 CLR 346 at 350. The cross demand must sound in money: cf Re Zakrzewski (2000) 178 ALR 694 at [33], citing James v Abrahams (1981) 34 ALR 657 at 664. The debtor must also establish that he or she could not, as a matter of law, have set up the counter-claim, set-off or cross demand in the action or proceeding in which the judgment or order was obtained: see Re Brink; Ex parte The Commercial Banking Company of Sydney Ltd (1980) 44 FLR 135 at 138-139; Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183 at 189; and Smart v Esanda Finance Corporation Limited [2000] FCA 235 at [17]. 26 Bearing these principles in mind, I am not satisfied that Mrs Biritz has a counter-claim, set-off or cross demand within the meaning of s 40(1)(g) of the Act. She has not sought in the Supreme Court either to appeal pursuant to Supreme Court Rules O 77.05 or to have a relevant order set aside. It seems that Mrs Biritz could, as a matter of law, have set up a relevant counter-claim, set-off or cross demand regarding the Cheltenham and Keysborough properties in the Supreme Court proceeding. Indeed, the Bank asserts that she did in fact do so, and that the claim was dismissed. She has not, moreover, satisfied me that she could not have brought her claim of fraud in the Supreme Court proceeding, as, for example, by seeking to have an order set aside as affected by fraud. 27 It seems to me too that Mrs Biritz has done little more than propound an allegation of fraud, indicating generally how she would make it out. Having regard to the entirety of the matters before me, I am not satisfied that she has shown a prima facie case of fraud of the kind referred to in Ebert at 350, which would justify the Court in setting aside the bankruptcy notice. Nor am I satisfied that she made out such a case with respect to her claims concerning the Cheltenham and Keysborough properties (which were, it appears, dismissed in the Supreme Court in any event). 28 For the reasons stated, I would refuse the application for review of the Registrar's decision dismissing Mrs Biritz's application to set aside the bankruptcy notice and therefore too her application for an extension of time for compliance with the notice. I would make orders accordingly. Mrs Biritz must pay the Bank's costs of the proceeding. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 20 November 2001 Counsel for the Applicant: Self-Represented Solicitor for the Applicant: Self-Represented Counsel for the Respondent: Mr D W Bennett Solicitor for the Respondent: Russell Kennedy Date of Hearing: 22 October 2001 Date of Judgment: 20 November 2001