The Court dismissed a debtor's application to set aside a bankruptcy notice under s 40(1)(g) of the Bankruptcy Act 1966, finding that the asserted counter-claim based on misleading or deceptive conduct under s 18 of the Australian Consumer Law was at best highly speculative and had poor prospects. The cross-claim failed because the alleged misrepresentations about a $1 million settlement obligation were not in fact misrepresentations (the Terms of Settlement did impose that obligation), the debtor could not sheet home liability to the creditors (NHB and Finn) as distinct from the Medicina Parties who made the representations, and the loss claimed was built on a false factual premise. The Court also noted that the evolving and inconsistent versions of the claim, and the timing of joining the creditors only after the bankruptcy notice was served, were indicative of a manufactured rather than genuine claim.
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