In an earlier post, we discussed how long you have to make an application to set aside a statutory demand. In this post, we look at one of the grounds for setting aside a statutory demand, namely a “genuine dispute”.
If you have received a creditor’s statutory demand for payment of debt, the Corporations Act allows you to file an application to set aside the statutory demand with the Supreme Court of New South Wales or the Federal Court of Australia. A Court will usually set aside a statutory demand when there is a genuine dispute about the existence of the debt referred to in the statutory demand or a genuine dispute about the amount of the debt referred to in the statutory demand.
If a Court is to set aside a statutory demand, it must be satisfied that the dispute is real, bona fide, exists in fact, not hypothetical, not spurious and not misconceived. The Court’s only task is to determine whether there is a genuine dispute, it is not required to resolve the dispute between the parties when considering an application to set aside a statutory demand.
If a company who receives a statutory demand raises a plausible argument in relation to the existence or amount of the debt referred to in the demand and that argument warrants further investigation, a Court will ordinarily set aside the statutory demand.
You should always remember that an application to set aside a statutory demand is only effective if it is filed and served within 21 days of the date of service. Statutory demands are very important documents that should be acted on immediately.
If you have been served with a statutory demand you need expert insolvency advice and you need it immediately. If you are concerned about corporate insolvency or would like to make an application to set aside a statutory demand, go to our contact page, send us an email or submit an enquiry using the form on the right side of your screen. Our professional staff are waiting to help you with your insolvency law needs.
