With Christmas upon us I wish to remind you again of the provisions regarding a Statutory Demand. The provisions are now as per the
Corporations Act and the Covid 19 provisions have fallen away. Unfortunately, this time of year sees a flush of statutory demands being delivered in the hope that the 21-day response period is missed by businesses closing over the Christmas/New Year break. Whilst I hope your company never receives a statutory demand, but regretfully many people often use a statutory demand improperly to recover debts allegedly owed to them by a company. A statutory demand is a demand for payment of an uncontested debt upon a company under the provisions of Part 5.4 of the
Corporations Act 2001. When you receive a statutory demand, you need to respond urgently and file and serve your application to have the statutory demand set aside with your supporting affidavit within 21 days of receipt. Being a legislative process, the conditions are very strict and any delay prohibits the successful filing of an application. An uncontested statutory demand creates the presumption that a company is insolvent and on that basis, a winding-up application can be instituted against a company to have the company assets sold and the proceeds utilised to pay creditors. Due to the strict timetable, I always make myself available to respond promptly to any such request to assist to have a statutory demand set aside. If there is any contest to the quantum of the alleged debt as set out in the statutory demand, the statutory demand may be set aside. A couple of weeks ago I received a message on my phone late in the evening from a client who had received at his office a statutory demand. He had been away for almost 3 weeks which resulted in the statutory demand becoming effective within 48 hours. I was able to respond immediately and assess the situation with my client. Fortunately, I was able to act promptly after assessing the situation and negotiate by noon the next day to have the statutory demand withdrawn. Statutory demands, fall under s 459E of the
Corporations Act and are subject to many technicalities. It is the intimate knowledge of these technicalities that has allowed me to assist my clients and in many cases to have the issuer withdraw the statutory demand, or on the other hand, allow negotiation to settle the matter for the best available result. It is very important if you've ever been issued with the statute demand, or if you wish to issue a statutory demand to ensure that it complies completely with the legislation. If I can be of service to assist you or anyone you know, please contact me.
Jeffrey 0419 233 670 [email protected] Please click to see more HERE ps. I am available to discuss legal matters either in my office or by Zoom conference; please note that notary services must be undertaken in person.
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