Luck v University of Southern Queensland

The case of Luck v University of Southern Queensland involved an application by the debtor, Ms Luck, to set aside a bankruptcy notice issued by the University of Southern Queensland (USQ). The application was heard in the Federal Circuit Court, and USQ opposed the application on the basis that it would be futile for the Court to stay or adjourn its consideration of the application or to extend time for Ms Luck to comply with the bankruptcy notice. The legal issues before the Court were whether Ms Luck had a counter-claim, set-off or cross-demand within the meaning of s 40(1)(g) of the Bankruptcy Act 1966 (Cth), and whether the application to set aside the bankruptcy notice should be dismissed.

The Court held that Ms Luck had not satisfied the Court that she had a counter-claim, set-off or cross-demand within the meaning of s 40(1)(g) of the Bankruptcy Act. The Court noted that to come within that section, an applicant must satisfy the Court that they have 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. The Court found that Ms Luck had not satisfied the Court that there was 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. Accordingly, the Court dismissed the application to set aside the bankruptcy notice.

The Court ordered that the application to set aside the bankruptcy notice be dismissed and that Ms Luck pay the respondent's costs of the application to set aside the bankruptcy notice including any reserved costs. The entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.