• Setting aside of statutory demand

    A debtor may apply to the Court to have a statutory demand set aside under section 459G of the Corporations Act 2001 (Cth).

    A debtor has 21 days to make an application to set aside a statutory demand, and the 21 day period is strictly enforced. The grounds on which a debtor may apply to have a statutory demand set aside are contained in sections 459H and 459J of the Corporations Act 2001 (Cth). These are:

    1. A genuine dispute

      Where there is a ‘plausible contention requiring investigation’ regarding the existence or amount of the debt.

    2. The debtor company has an offsetting claim against the creditor

      A counter-claim, set-off, or cross-demand exists against the creditor (not necessarily in relation to the debt in the statutory demand).

    3. Defect in the statutory demand and substantial injustice

      An absence, deficiency, or shortcoming of a necessary element of the statutory demand itself which is likely to cause confusion, fail to adequately inform, or mislead the debtor.

    4. Other sound reasons

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