Donnelly v Kempsey Local Aboriginal Land Council

In the matter of *Donnelly v Kempsey Local Aboriginal Land Council*, heard before Judge Barnes, the applicant sought to set aside a bankruptcy notice issued by the respondent. The bankruptcy notice was based on a judgment debt owed by the applicant to the respondent. The core of the dispute revolved around whether the applicant possessed a counter-claim, set-off, or cross-demand that was equal to or exceeded the amount of the judgment debt.

The primary legal issue before the court was to determine whether the applicant had established a sufficient counter-claim, set-off, or cross-demand to justify setting aside the bankruptcy notice. This required the court to assess the nature and quantum of the alleged counter-claim, set-off, or cross-demand and compare it against the judgment debt.

Judge Barnes reasoned that for a counter-claim, set-off, or cross-demand to be considered sufficient to set aside a bankruptcy notice, it must be one that the applicant could legitimately raise and that was demonstrably of a value equal to or greater than the judgment debt. The court considered the evidence presented by the applicant regarding their alleged counter-claim and found it to be unsubstantiated and lacking the necessary certainty and quantum to meet the threshold required by the *Bankruptcy Act 1966* (Cth). Consequently, the court was not satisfied that the applicant had a counter-claim, set-off, or cross-demand sufficient to set aside the bankruptcy notice.