Federal Court of Australia Di Gregorio v Lumi Financial Pty Ltd [2022] FCA 94 File number(s): VID 648 of 2021 Judgment of: ROFE J Date of judgment: 11 February 2022 Catchwords: BANKRUPTCY AND INSOLVENCY – application to set aside bankruptcy notice – whether substituted service effective – whether application to set aside default judgment made within time – whether any other reason under section 41 of the Bankruptcy Act to set aside bankruptcy notice exists – whether Court has power to set aside bankruptcy notice once act of bankruptcy has occurred – application dismissed Legislation: Bankruptcy Act 1966 (Cth) Federal Court Act 1976 (Cth) Bankruptcy Regulations 1996 (Cth) Federal Court Rules 2011 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases cited: ANZ Banking Group Limited, in the matter of James v James [2016] FCA 332 Australian Securities & Investments Commission v Forge (2004) 133 FCR 487 Bryant v Commonwealth Bank of Australia (1994) 217 ALR 251 Nugawela v Deputy Commissioner for Taxation [2016] FCA 578 Ramsay Health Care Australia Pty Ltd v Adrian John Compton [2017] HCA 28 Re Grace (1931) 3 ABC 131 Re Lentini: Ex parte Lentini v CSR Ltd (1991) 29 FCR 363 Re Sterling: Ex parte Esanda Ltd (1980) 30 ALR 77 Re Vella; Ex parte Seymour (1983) 67 FLR 287 Streimer v Tamas (1981) 37 ALR 211 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 69 Date of hearing: 4 February 2022 Solicitor for the Applicant: People Shop Pty Ltd trading as Erudite Legal Counsel for the Respondent: Ms C Langford Solicitor for the Respondent: LegalVision ORDERS VID 648 of 2021 BETWEEN: MARIA DI GREGORIO Applicant AND: LUMI FINANCIAL PTY LTD Respondent order made by: ROFE J DATE OF ORDER: 11 February 2022 THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the costs of the respondent, to be assessed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ROFE J: Introduction 1 On 2 September 2021, bankruptcy notice BN 254129 (the Notice) was issued notifying a claim of the respondent, Lumi Financial Pty Ltd (Lumi) against the applicant, Ms Maria Di Gregorio. The Notice relies on Ms Di Gregorio's failure to pay a default judgment debt pursuant to orders of the Local Court of New South Wales (Local Court). 2 On 20 September 2021, Registrar Cridland made orders for substituted service of the Notice. 3 The applicant has applied to set aside the Notice on a number of grounds under the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), the Federal Court Act 1976 (Cth) (FC Act) and the Federal Court Rules 2011 (Cth) (FC Rules) or alternatively, an extension of time for compliance with the Notice. The applicant also seeks declaratory relief, costs, and orders that the substituted service orders be set aside. 4 Lumi consents to the Court setting aside the Notice, if the Court has jurisdiction to do so. 5 The critical question in this application is whether, in the circumstances of this case, the Court has jurisdiction to set aside the Notice. This depends on whether the applicant's application to set aside the default judgment in the Local Court proceedings was made within time so as to enliven this Court's power to extend time for compliance with the Notice under s 41(6A) of the Bankruptcy Act. 6 For the reasons set out below, I do not consider that the Court has jurisdiction to set aside the Notice. Legislation 7 Section 41 of the Bankruptcy Act provides: (1) An Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor: (a) a final judgment or final order that: (i) is of the kind described in paragraph 40(1)(g); and (ii) is for an amount of at least the statutory minimum; or … (2) The notice must be in accordance with the form prescribed by the regulations. (2A) The notice must specify a period for compliance with the notice. That period must be: (a) if the notice is to be served in Australia—the statutory period after the debtor is served with the notice; or … (3) A bankruptcy notice shall not be issued in relation to a debtor: (a) except on the application of a creditor who has obtained against the debtor a final judgment or final order within the meaning of paragraph 40(1)(g) or a person who, by virtue of paragraph 40(3)(d), is to be deemed to be such a creditor; (b) if, at the time of the application for the issue of the bankruptcy notice, execution of a judgment or order to which it relates has been stayed; or … … (6A) 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) 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. (6C) Where: (a) a debtor applies to the Court for an extension of the time for complying with a bankruptcy notice on the ground that proceedings to set aside a judgment or order in respect of which the bankruptcy notice was issued have been instituted by the debtor; and (b) the Court is of the opinion that the proceedings to set aside the judgment or order: (i) have not been instituted bona fide; or (ii) are not being prosecuted with due diligence; the Court shall not extend the time for compliance with the bankruptcy notice. Background Debt 8 On 19 June 2019, Lumi entered into a loan agreement with Efektiv Pty Ltd (Efektiv). On the same day, Ms Di Gregorio, another individual and two companies entered into a guarantee in respect of the loan agreement. Ms Di Grigorio was a non-executive director of Efektiv at all relevant times. 9 On 25 September 2019, Efektiv defaulted on the loan agreement. 10 On 10 October 2019, Lumi sent a letter of demand to Efektiv and the guarantors, including Ms Di Gregorio. No payments were made in response to the letter of demand. 11 On 14 November 2019, Lumi instituted proceedings in the Local Court seeking judgment in the sum of the outstanding loan amount plus interest and costs. Ms Di Gregorio was named as the fifth defendant in the statement of claim. 12 Ms Di Gregorio did not file a defence in the Local Court proceedings. On 5 February 2021, default judgment was entered in favour of Lumi against Ms Di Gregorio for the sum of $67,588.60. Bankruptcy notices 13 On 10 February 2021, the Australian Financial Security Authority (AFSA) issued BN 251641 (the First Bankruptcy Notice). Lawyers for Lumi contacted process servers on 12 February 2021 along with instructions to personally serve documents including the First Bankruptcy Notice and the default judgment on Ms Di Gregorio. 14 Between 21 February 2021 and 5 August 2021, Lumi's process servers made several unsuccessful attempts to personally serve the documents on Ms Di Gregorio. 15 On 2 September 2021, AFSA issued a second bankruptcy notice (being the Notice). 16 On 20 September 2021, Registrar Cridland made orders for substituted service of the Notice (the Orders). The Orders provided: 1. Service of Bankruptcy Notice No. BN 254129 issued 2 September 2021 and addressed to the Respondent 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 Respondent at [the Respondent's 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 the Respondent [the Respondent's residential address]; and (c) by scanning and sending by email to the Respondent at contact@new-edge.law. 2. Service in accordance with this order shall be deemed good and sufficient service of the Bankruptcy Notice upon the Respondent. 3. The Bankruptcy Notice shall be deemed to have been served on the Respondent on 30 September 2021. 4. A copy of the Bankruptcy Notice served pursuant to paragraph 1 of this order is to be annexed to any affidavit proving that service. 5. The copies of the Bankruptcy Notice for service and proof of service all be amended by deleting the words in paragraph 1 of page 2 of the notice "after service on you of this Bankruptcy Notice" and substituting "after 30 September 2021". 6. Costs of this application be reserved for the purposes of any creditor's petition based on this bankruptcy notice. evidence 17 In support of this application filed 4 November 2021, the applicant relied upon three affidavits made by her, one dated 2 November 2021, and two dated 2 December 2021: (a) the first affidavit, dated 2 November 2021, was filed alongside the originating application on 4 November 2021. That affidavit and its annexures runs to some 1881 pages; (b) the second affidavit, dated and filed on 2 December 2021, gave additional evidence regarding the applicant's occupational history; and (c) the third affidavit, dated and filed on 2 December 2021, annexed additional material relating to the postal service issue addressed below. 18 A fourth affidavit, dated 4 February 2022 and filed at 9:28am on that day (being the day of the hearing), annexed further solicitors' correspondence between the parties, the transcript of the hearing before Registrar Gitsham on 2 December 2021, and a copy of a summons filed in the NSW Supreme Court. The Court's attention was not drawn to this fourth affidavit during the hearing of the application. 19 The respondent primarily relied on the affidavits of Ms Vanessa Swain, the solicitor with carriage of the matter for the respondent. Ms Swain filed four affidavits in this proceeding: (a) the first affidavit, dated and filed 1 December 2021; (b) the second affidavit, dated 5 October 2021 and filed on 10 December 2021, being an affidavit of service; (c) the third affidavit, dated and filed on 10 December 2021, annexing materials relating to the Orders; and (d) the fourth affidavit, dated and filed on 2 February 2022, annexing further solicitors' correspondence, and orders from the Local Court setting aside the default judgment dated 16 December 2021. I note that in correspondence the applicant's solicitors raised some objection to the respondent relying on this affidavit, however no objections were pressed at the hearing. 20 The respondent also relied upon two further affidavits of service: the first made by Ms Alice Ireland, a paralegal working at the same firm as Ms Swain, dated 14 October 2021; and the second made by Mr Sam Fimai, a process server, dated 6 October 2021. These affidavits were both filed on 10 December 2021. 21 The parties did not formally read their affidavit material at the hearing. However, I take the affidavits referred to above (aside from the fourth affidavit of the applicant) as read to the extent that the Court was taken to them in written submissions prior to the hearing, or in oral submissions. 22 I requested that both parties file a short summary of their submissions by 4:00pm on 3 February 2022. The respondent filed their submissions before that deadline. The applicant did not provide any submissions until after the hearing had commenced, and filed two further documents purporting to be further submissions later that afternoon. 23 Due to the exigencies of the COVID-19 pandemic, the hearing of the application took place via Microsoft Teams. The hearing took most of the day. The substituted service issue 24 The applicant's originating application seeks that the Notice be set aside for non-compliance with the Orders. 25 The respondent relies on the following evidence that service was effected in accordance with the Orders. This includes: (a) the evidence of Ms Ireland that she posted the Notice and accompanying documents in accordance with order 1(a) on 21 September 2021; (b) the evidence of Mr Fimai that he served the applicant personally at her residential address on 23 September 2021 at 9:28am in accordance with order 1(b); and (c) the evidence of Ms Swain, annexing a copy of an email dated 21 September 2021 sent at 3:56pm from Ms Swain to the email address outlined in the Orders attaching, by way of service, the Notice and accompanying documents in accordance with order 1(c). 26 The applicant gives evidence that she received the Notice and accompanying documents as follows: (a) on 12 October 2021, Ms Di Gregorio collected the Notice from her mailbox at her residential address at 6:00pm. Either her or her husband checks the mail received at the residence each day, and she states that the Notice was not present when the mail was checked on 11 October 2021; (b) on 23 September 2021, a process server dropped the Notice and accompanying documents at Ms Di Gregorio's feet at her residential address; and (c) on 21 September 2021, Lumi's solicitor emailed the Notice and accompanying documents to Ms Di Gregorio's solicitor. 27 The applicant submits that service was not effected until she received the Notice in the post on 11 October 2021, and, given she received it at 6:00pm then the effective date of service is 12 October 2021 in accordance with the FC Rules. The applicant submits that the 21 day period in which to set the Notice aside ran from 12 October 2021, rather than the deemed date of 30 September 2021 pursuant to the Orders. 28 I am satisfied, based on the evidence before me, that service of the Notice and the other documents referred to in the Orders was effected in accordance with the terms of the Orders. The applicant's submission based on the date of service of the Notice must fail. 29 As a matter of construction, the Orders do not operate in the way the applicant contends. The Orders prescribed three actions by which substituted service was to be effected. Service is effected by those three actions being carried out in accordance with the Orders, not by the documents being received by the applicant. The postal method outlined in order 1(a) refers to the sending of the documents rather than the receipt of those documents. Order 3 deems that service is to have taken place on 30 September 2021. The respondent led evidence that it took steps to effect all three methods of service on 21 September 2021. As such, I see no reason why the deeming provision in order 3 should not operate. 30 In ANZ Banking Group Limited, in the matter of James v James [2016] FCA 332 an issue before the court was whether the bankruptcy notice issued at the request of the ANZ Banking Group Limited to Mr James had been served on him in accordance with the requirements of the Act and the Bankruptcy Regulations 1996 (Cth) (the Bankruptcy Regulations). At [41], after referring to and accepting the evidence given on behalf of Mr James that the bankruptcy notice issued to Mr James had not come to his attention, Katzmann J said: But even if Mr James did not receive the bankruptcy notice and accompanying documents that does not necessarily mean that he was not served. It is possible that the envelope was caught up with junk mail and inadvertently discarded. In any event, the question is not whether he received the documents but whether they were served upon him in accordance with the Regulations. As Spender J observed in Repatriation Commission v Gordon (1990) 26 FCR 569 at 578, "[n]on-receipt is not the same as non-delivery'. See, too, Perpetual Nominees v Masri Apartments (2004) 183 FLR 142; [2004] NSWSC 500 at [23]. (Emphasis added.) 31 In any event, despite not having received the posted documents until the evening of 11 October 2021, the applicant, on her own evidence, had received two copies of the Notice prior to delivery of the posted documents and prior to the deemed date of service of 30 September 2021. 32 As a practical matter, substituted service orders are often drafted to include several methods of service in order to ensure that the relevant document will most likely come to the attention of the person being served. It would go against the purpose of providing multiple methods of service by which to effect substituted service if service was only effected when each and every method was communicated to the receiver. This is particularly so where substituted service has been ordered because it was not practicable to serve the documents in the ordinary way, and that ordinary way does not entail service via three different methods. On the applicant's construction, service via substituted service would be more onerous than normal service. 33 It is clear from the evidence of the applicant that she was made aware of the Notice before receiving it in the post. There is no reason why the date she received the last method of service should displace the deemed date of service in the Orders: 30 September 2021. 34 I accept the respondent's submission that the Notice is deemed to have been served on 30 September 2021. There is no non-compliance with the Orders such that the Notice should be set aside. Other arguments relating to setting aside the Notice 35 The applicant also submits that the Notice be set aside on the basis that: (a) The respondent did not comply with s 41(2A) of the Bankruptcy Act in relation to the Notice; (b) The respondent did not comply with s 41(2) of the Bankruptcy Act and reg 9 of the Bankruptcy Regulations; and (c) The respondent did not comply with s 41(3)(a) of the Bankruptcy Act as the default judgment was obtained improperly and therefore unenforceable. 36 These grounds were not fully developed at the hearing, however, I make the following brief comments in relation to the applicant's submissions. Specifying time for compliance 37 First, the Notice satisfied s 41(2A) of the Bankruptcy Act, which requires a bankruptcy notice to specify the period for compliance, that period being the statutory period after the debtor is served. Section 5 of the Bankruptcy Act defines the statutory period as 21 days. The Notice, as amended by the Orders, states: 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. I understand the applicant to submit that, given that the third copy of the Notice was only received by her on 11 October 2021, the notice did not give the full period for statutory compliance. Given my findings on the applicant's service argument above, this argument must fail. Prescribed form 38 Second, the applicant did not develop at the hearing any further the ground that the Notice was not in the prescribed form, contrary to s 41(2) and r 9. The Notice complies with the prescribed form in Schedule 1 of the Regulations. The applicant has not identified any errors in the Notice. There is no reason to set aside the Notice on the basis of non-compliance with s 41(2). Judgment improperly obtained 39 Third, the applicant submits that the Notice should be set aside on the basis that the default judgment on which it was based was obtained improperly in any one of several ways: fraudulently or in bad faith; in breach of the applicant's entitlement to natural justice; in breach of the applicant's equitable rights; in breach of the applicant's legitimate expectations; pursuant to jurisdictional error; owing to Wednesbury unreasonableness 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. 40 I understand the applicant to submit that the Court should go behind the judgment and find that it was improperly obtained, after which the Notice can be set aside. 41 I do not consider it appropriate to go behind the judgment for determining whether a bankruptcy notice complies with the various requirements in s 41. At the time the Notice was issued, the respondent creditor had obtained a final judgment against the applicant debtor. It was entitled to rely on that judgment to issue the Notice. 42 The cases referred to by the applicant in support of its submission included examples of cases where a court has gone behind the judgment to examine the underlying judgment debt. However, these cases concern creditor's petitions pursuant to s 52 of the Bankruptcy Act: see for example Ramsay Health Care Australia Pty Ltd v Adrian John Compton [2017] HCA 28. That section requires the Court to be satisfied of the existence of a debt before making a sequestration order on a creditor's petition. The principles relating to going behind a judgment are enlivened by that section and the requirement of the Court's satisfaction as to the existence of a debt. They are not generally applicable to s 41 of the Bankruptcy Act. I do not consider that they are relevant here nor provide a basis to set aside the Notice. 43 Because there is no reason to set aside the Notice, I will consider the applicant's submissions regarding an extension of time for compliance. Extension of time under s 41(6A) 44 The applicant alternatively seeks an extension of time in which to comply with the Notice under s 41(6A)(a) of the Bankruptcy Act. This Court may grant an extension of time for compliance where the debtor has instituted proceedings, within the original time for compliance, to set aside a judgment in respect of which the bankruptcy notice was issued. 45 As I have found that the Notice was deemed to have been served on the respondent on 30 September 2021, the 21-day compliance period is calculated from that date. The applicant therefore had until 21 October 2021 to comply with the Notice, or to make an application for an extension of time. The applicant had done neither by the deadline. 46 Pursuant to s 41(6A) of the Bankruptcy Act the Court may extend the time for compliance with the Notice where, before the expiration of the time for compliance (in this case 21 October 2021) proceedings to set aside the judgment in respect of which the Notice was issued have been instituted by the debtor. 47 The applicant's evidence regarding the institution of proceedings in the Local Court to seek to have the judgment set aside is that following the receipt of the Notice, she instructed her solicitor to lodge an application to set aside the default judgment. On 21 October 2021, her solicitors faced unspecified technical difficulties while attempting to lodge the application. The application was lodged with the Local Court online registry at 11:59pm on 21 October 2021. The applicant annexed a lodgement confirmation email received from eservice@agd.nsw.gov.au on 22 October at 12.03 am (the Registry email). The Online Registry email stated: The form(s) filed on 21 October 11:59 PM have been processed by the court. If you were charged a filing fee, your tax invoice is attached. Transaction reference number: B20211021-8626862 Submitted by: Allan McGregor Filing date: 22 October 2021 12:00 AM 48 The applicant relies on the automatically-generated Online Registry filing acceptance email to submit that the application to set aside the judgment was filed on 21 October 2021 at 11:59pm, prior to the expiry of the 21 days. 49 The question of when the Local Court proceedings were instituted is resolved by reference to the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), which apply to civil proceedings before the Local Court. Rule 3.4 relates to the electronic filing of documents. The relevant parts of r 3.4 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 documents fails to comply with any substantial requirements of the approved form or the rules in relation to such a document. (Emphasis added.) 50 I note that the UCPR does not have an equivalent provision to that of r 2.25(3) of the FC Rules, which provides that if a document is sent by electronic communication to a Registry, the document is, if accepted by the Registry, taken to be filed: (a) if the whole document is received by 4.30pm on a business day for the Registry – on that day; or (b) in any other case – on the next business day for the Registry. 51 Despite the somewhat general usage of the word "filed" in the UCPR, I consider that the effect of r 3.4(3) is that the application to set aside the default judgment was instituted on 22 October 2021. The application was accepted by the Online Registry at 12:00am according to the Registry email. According to r 3.4(3) a document is taken to be filed when the Online Registry gives notice of acceptance. That the relevant time is the time of acceptance rather than the time of uploading or submitting the document to the Registry is supported by rr 3.4(4) and (5), in particular those parts highlighted above. Pursuant to r 3.4(4) 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. Rule 3.4(5) speaks of a document being "submitted to be filed", this suggests that the document is not filed until an action, i.e. acceptance, is taken by the Registry. 52 The applicant had until 21 October 2021 to either comply with the Notice, institute proceedings to set aside the judgment in respect of which the Notice was issued, or, to make an application to this Court to set aside the Notice. The applicant had done none of these by the deadline. On expiry of the deadline, an act of bankruptcy took place. 53 As the institution of proceedings to set aside the default judgement or an application to set aside the bankruptcy notice within time are jurisdictional requirements, this Court cannot extend the time for compliance with the Notice under s 41(6A) when neither step has been taken. 54 The applicant submitted that rr 1.32 and 1.34 of the FC Rules allowed the Court to dispense with the requirements of s 41(6A) of the Bankruptcy Act. Rule 1.32 empowers the Court to make any orders it considers appropriate in the interests of justice; while r 1.34 permits the Court to dispense with compliance with any of the FC Rules. For completeness, I note that the applicant also submitted that s 33ZF of the FC Act would similarly allow the Court to make orders dispensing with the requirements of the Bankruptcy Act. As that section only applies to representative proceedings commenced under part IVA of the FC Act, it does not apply to the current proceeding. 55 The FC Rules are not a source of power to dispense with requirements under the Bankruptcy Act. In Nugawela v Deputy Commissioner for Taxation [2016] FCA 578, McKerracher J held that there was no such a power under the FC Rules, stating at [39]: As the time for compliance with the bankruptcy notice is fixed under the Bankruptcy Act, the Court cannot dispense with compliance with the FCR pursuant to either r 1.34 or r 1.39. In relation to r 1.34, Altobelli FM in Charlton v CNH Capital Australia Pty Ltd [2013] FMCA 232 (at [5]), correctly held in relation to a similarly worded provision that: The power to extend time for compliance with a bankruptcy notice under s 33(1)(c) of the [Bankruptcy Act] is expressly disallowed, and thus the authorities state that failure to comply with s 41(6A) is not a 'procedural irregularity capable of cure' but 'fatal to jurisdiction': Re Shaddock; Shaddock v Commonwealth Bank of Australia (unreported Federal Court of Australia, Goldberg J, 9 April 1998). In other words this court lacks the power to set aside the bankruptcy notice unless the application was filed before the expiration of the time fixed for compliance with the requirements of the bankruptcy notice. Can the Court otherwise set aside the Notice? 56 The Act does not expressly empower the Court to set aside a bankruptcy notice, but such a power is necessarily to be inferred and is within the general powers of the Court conferred by s 30(1) of the Bankruptcy Act: Re Sterling: Ex parte Esanda Ltd (1980) 30 ALR 77 at 82–3; Re Lentini: Ex parte Lentini v CSR Ltd (1991) 29 FCR 363 at 367–72; Bryant v Commonwealth Bank of Australia (1994) 217 ALR 251. 57 In Australian Securities & Investments Commission v Forge (2004) 133 FCR 487, Emmett J (Branson and Stone JJ agreeing) stated at [26]–[27]: While there is no express power conferred by the Act on a Court to set aside a bankruptcy notice, it is clear that there is power to do so. The power is derived from s 30 of the Act and from the principle that a power conferred by Parliament carries with it the power necessary for its performance or execution. Thus, the express power to extend time for compliance with the requirements of a bankruptcy notice, when an application to set it aside has been filed, carries with it the power to set aside the bankruptcy notice itself: Re Sterling; Ex parte Esanda Ltd (1980) 44 FLR 125. However, the Act gives no general discretion to set aside bankruptcy notices that are valid in form and not an abuse of process. The Act permits the issue of a bankruptcy notice and, if the notice is valid, prescribes the consequences to the bankrupt of non-compliance. The grounds upon which a bankruptcy notice may be set aside must relate to the form or content of the notice, service of the notice or the existence of the debt upon which the judgment, and, in turn, the notice, is founded. Reference to the existence of a debt includes the existence of a counter claim, set off or cross demand equal to or exceeding the amount of the debt: Re Briggs; Ex parte Briggs v Deputy Commissioner of Taxation (WA) (1986) 12 FCR 310 at 312; Re Athans; Ex parte Athans (1991) 29 FCR 302 at 310. Since jurisdiction to set aside a defective bankruptcy notice is not a general discretionary jurisdiction, it differs from the jurisdiction to make a sequestration order under s 52(1), which is expressly discretionary. 58 Similarly, there is no express power, in circumstances like the present, to annul or set aside the act of bankruptcy once it has been committed: see Streimer v Tamas (1981) 37 ALR 211 at 218 (Sheppard J), referring to Re Grace (1931) 3 ABC 131. 59 Counsel for the respondent referred to the case Re Vella; Ex parte Seymour (1983) 67 FLR 287 (Vella), which she submitted possessed similar facts to the present case. In Vella, 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 she apply to have the default judgment or the bankruptcy notice set aside. After the time for compliance had elapsed, the debtor applied to have both the default judgment and the bankruptcy notice set aside. The default judgment was set aside, and Morling J had to consider whether this court should set aside a bankruptcy notice founded on a judgment of another court that had subsequently been set aside. 60 Morling J dismissed the debtor's argument that s 30(1) of the Bankruptcy Act empowered the court to set aside the bankruptcy notice in the circumstances. His Honour reasoned: It is necessary to keep clearly in mind the effect of non-compliance with the bankruptcy notice. The effect was, of course, that the debtor committed an act of bankruptcy when she failed either to comply with its terms or to take appropriate action under s 41(6A). The subsequent setting aside of the judgment did not alter the fact that the act of bankruptcy has already been committed. The act of bankruptcy remained extant. No doubt, in the exercise of its discretion, the court would not make a sequestration order if at the time of the hearing of the petition it was shown that the judgment debtor was not in fact indebted to the judgment creditor. But the act of bankruptcy referred to in s 40(1)(g) would be complete. 61 I am of the view that the applicant committed an act of bankruptcy, by not complying with the Notice, nor making an application to set aside the Notice nor the underlying default judgment by the time for compliance on 21 October 2021. This 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. Conclusion 62 The applicant has not established any grounds of the application. The application (including the claims for interim relief) is dismissed with costs. Other matters 63 The applicant sent email correspondence to my Chambers on 9 February 2022 with the subject line "Urgent Application on behalf of Ms Di Gregorio". Attached was a letter addressed to my associate, a letter addressed to the respondent's solicitor, and a copy of a summons filed in the Supreme Court of NSW (the Supreme Court) on 4 February 2022 at 9:15 am (the date of the hearing before this Court). The summons was filed on behalf of the applicant seeking judicial review of orders setting aside the default judgment which gave rise to the Bankruptcy Notice. The letter requested that I defer the determination of the application until after the Supreme Court has determined the applicant's application in that Court. 64 The respondent does not consent to any deferral of determination of this application. 65 No formal application to re-open the matter whilst judgment is reserved has been made by the applicant. The issues raised in the correspondence and the summons were not raised before me at the hearing, nor was the existence of the summons which had been filed at 9:15am that very day in the Supreme Court. While the fourth affidavit of Ms Di Gregorio filed just before the hearing on that day did refer to and annex the summons in the Supreme Court, I was not taken to those materials or told of its existence. No submissions were made in respect of that material. 66 In the absence of any formal application to re-open the hearing of the application, or defer determination of the application, I will not re-open the hearing or defer the matter until the Supreme Court summons is heard and determined. 67 Had a formal application been made, I would have rejected that application. 68 The applicant's primary submission in support of its purported application is that there may be the possibility of inconsistent judgments in this Court and in the Supreme Court in relation to the validity of the default judgment. 69 As I noted earlier, the critical issue for this application is the jurisdiction of the Court to set aside the Notice in the circumstances of this case. I do not consider that it is appropriate to go behind the default judgment in the determination of this application. There is no possibility of any inconsistent judgment in the Supreme Court proceeding, or any issue estoppel. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rofe. Associate: Dated: 11 February 2022