Have you been served with a statutory demand?
Get the right advice quickly – contact statutory demand expert, Duncan Lang today to set up an appointment.
14 November, 2014 | Duncan Lang
Article updated 16 September 2024
A statutory demand is a formal demand served on a company claiming a debt is owed by that company. It must be in writing and be for a debt of at least $1,000.00. Service on a company can occur in a number of ways, such as by delivery to a person named as a director, or by leaving it at the company’s registered office or address for service.
If your company is served with a statutory demand, you have a strict statutory timeframe of 15 working days from the date of service to either pay the debt, or enter into an arrangement to the creditor’s satisfaction, such as a payment plan or a charge over property or face the risk of having your company liquidated.
If your company fails to satisfy the statutory demand, then it is presumed that your company is unable to pay its debts and is therefore insolvent. In turn, this can lead to the creditor making an application to the High Court to have your company liquidated.
There may be circumstances where you dispute the debt and do not want to comply with the statutory demand. In this case, you can apply to the High Court to set aside (cancel) the statutory demand. This must be done within 10 working days of service of the statutory demand. The time limits for applying to set aside the statutory demand are strict and cannot be extended, so quick, decisive action is required.
You can make an application to the High Court to set aside the statutory demand. This must be supported by a sworn affidavit. The application and affidavit must then be served on the creditor. Before setting aside a statutory demand, the Court must be satisfied of one of the following:
The statutory demand remains in place until your application is heard, but your lawyer can ask the Court to extend the time under the statutory demand. This will prevent the creditor from taking steps against the company until the application has been dealt with.
If the court finds that the statutory demand should not be set aside, it has the power to order your company to pay the debt within a specified period. It could also order the company to be put into liquidation.
20 March, 2012 | Duncan Lang
14 November, 2014 | Duncan Lang