Posted by Elizabeth Gore-Jones
on 13 May 2024
Last week, we appeared in the Supreme Court of Queensland in relation to a statutory demand which has been served upon our corporate Client for an alleged debt.
A statutory demand is a serious document that allows the company 21 days from service within which to either make an application to the Supreme Court to have the statutory demand set aside or to pay the debt. Therefore, it is really important that a company acts very quickly if it should receive a statutory demand.
If the company does neither of those things, then the creditor can make an application to have the company wound up.
Because these applications are so serious in nature, the court requires them to be 100% accurate or the court may set the statutory demand aside.
Statutory demands should not be used for debt collection purposes. They should only be used if the creditor truly believes that the company is insolvent and unable to pay its debts as and when they fall due.
If the statutory demand is set aside, then the company will have good grounds to make an application to the court that the creditor pays the costs of filing the application and appearing in court as a result of the statutory demand.
There are many other avenues that a creditor can pursue if a company is failing to pay debts. For instance, if the debt is below $25,000.00, the company can make an application to QCAT for an order. Above that value, the court proceedings would be commenced in the appropriate court.
At The Franchise & Business Lawyers, we understand the urgency and gravity of statutory demand and debt collection matters. Reach out to us to help safeguard your interests and navigate complex legal proceedings with precision and expertise.
