A Statutory Demand is a written demand for payment served by a creditor on a company when the company owes money to the creditor according to the Corporations Act 2001. When a company is served a Statutory Demand, it has 21 days to pay the amount owed and settle the claim or dispute the claim and apply to set aside the Statutory Demand with the court.
In certain circumstances a company can apply to set aside a Statutory Demand :
1. Defect in the Statutory Demand:
If the Statutory Demand contains a defect at law which would cause substantial injustice should the Demand be upheld then application can be made to set it aside. For instance if the Demand is written vaguely or fails to provide a sufficient amount of information then a company is entitled to apply for a set aside.
2. Dispute about debt claimed:
If a company has a genuine dispute over the debt claimed they are entitled to apply for it to be set aside. If the Statutory Demand was made before the company was provided with any previous demand for payment; if the company acknowledged the debt but has asked for more time or has disputed the debt prior to the Demand being served; or, if the company does not believe that it is the correct debtor or the amount claimed is incorrect then these are all valid reasons according to the Act to apply to set aside the Statutory Demand.
3. Offsetting Claim:
If a company has an offsetting claim (a counterclaim, set-off or cross-demand) against the creditor, which when deducted from the Statutory Demand is less than the amount demanded, the company is entitled to apply for a set aside.
If any of the above options are available then the company must act quickly as there are strict time restraints.
Contact Miller Sockhill Lawyers in Buderim, Sunshine Coast, Queensland for more information or advice regarding Statutory Demands. Miller Sockhill Lawyers have successfully acted for companies in setting aside statutory demands.