Quek v Pro Trader Pty Ltd

In the Supreme Court of Western Australia, Judge Antoni Lucev considered an application by the Applicant, Ms Quek, to set aside a bankruptcy notice issued by the Respondent, Pro Trader Pty Ltd. The dispute arose from an outstanding costs order made in favour of Pro Trader, which Ms Quek sought to set aside by asserting a counter-claim, set-off, or cross-demand against Pro Trader. Ms Quek alleged that Pro Trader owed her substantial sums for outstanding wages and long service leave entitlements, and further, for monies due under an alleged agreement for the buy-out of her shares.

The central legal issues before the Court were whether Ms Quek possessed a counter-claim, set-off, or cross-demand that equalled or exceeded the judgment debt owed to Pro Trader, and crucially, whether such claims could have been raised in earlier proceedings. Specifically, the Court had to determine if the claims Ms Quek sought to advance were the same as those previously made in a creditor's statutory demand that had been withdrawn, and if the failure to adequately detail these claims in her supporting affidavit constituted a formal defect or irregularity that could be excused.

Judge Lucev reasoned that for a bankruptcy notice to be set aside on the grounds of a counter-claim, set-off, or cross-demand, the applicant must demonstrate that the claim equals or exceeds the debt specified in the notice. Furthermore, the Court considered the principle that such claims should ideally have been raised in the original proceedings that led to the judgment debt. In this instance, the Court found that the claims for wages and long service leave were substantially the same as those previously advanced in a withdrawn statutory demand. The alleged share buy-out agreement was also disputed, with evidence suggesting no final agreement was reached. The Court concluded that the affidavit supporting the application to set aside the bankruptcy notice lacked the necessary detail to establish a valid counter-claim, set-off, or cross-demand that could defeat the bankruptcy notice.

Consequently, the Court ordered that the application to set aside the bankruptcy notice be dismissed.