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 disputeWhere 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 creditorA 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 injusticeAn 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