What is a Statutory Demand in NSW?

Have you been served a Statutory Demand? Do you know what is a statutory demand and what to do next?

A Statutory Demand is a demand upon a company to pay an outstanding debt due to a creditor. It is considered served once it arrives at the registered office of your company.

During these uncertain times, if you're looking for the best lawyer in Sydney CBD, NSW, Jeffrey of JCL Legal is available by mobile phone. Please call him on 0419 233 670.

A Statutory Demand notice is a formal, verified demand issued under section 459E of the Corporations Act 2001 (Cth). It is a very effective instrument for ascertaining whether a company can pay its debts as and when they fall due.

Requirements For A Statutory Demand To Be Issued

A Statutory Demand must fulfil the following pre-requisites under Section 459E (2) of the Act:

• It must specify the debt claimed and indicate the nature of the debt;
• It must note payment to be made within 21 days;
• The amount of the debt must be $2,000 or more;
• It must be in writing and in the prescribed form (Form 509H); and
• It must be signed by or on behalf of the creditor.

The creditor is required to serve the Statutory Demand notice, either by posting it to the registered office of the company or by personally serving it to the director of the company. For non‑compliance with a Statutory Demand, the company can also be declared as insolvent. If a company has been served with a Statutory Demand, immediate action must be taken to avoid such adverse consequences.

The Statutory Demand need not necessarily be paid in the Australian currency. If the debt is in foreign currency, it can be paid as it is in. For example, in Daewoo Australia Pty Limited v Suncorp Metway Pty Limited (2000) 48 NSWLR 692, the Court accepted the payment in a foreign currency as being appropriate, even though in the prescribed form it required it to be translated into the Australian currency.

How To Deal With A Statutory Demand

A Statutory Demand is a demand upon a company under the provisions of the Corporations Act. If such a demand is correctly issued and served and the debtor company fails to pay the debt within 21 days from the date of service of the demand, or otherwise fails to make arrangements to pay the debt to the creditor’s satisfaction, the company is presumed ‘insolvent’ and the creditor can make an application to wind the company up. A company or person is insolvent when they cannot pay their debts when they become due and payable.

With the statutory minimum of $2,000.00, you should never ignore a Statutory Demand.

An application to set aside a Statutory Demand is made in the Supreme Court of New South Wales and must be accompanied by an affidavit setting out the grounds on which you rely to have the Statutory Demand set aside (deemed invalid). A Statutory Demand must be for a definite amount of money over which there is no dispute, properly described and the debtor (person owing the money) is properly described. If there is an error in the Statutory Demand or it is ambiguous, then there are grounds to have it set aside (made null and void).

Even when the Statutory Demand is drafted correctly, it has been our experience that most Creditors are willing to negotiate the debt. Our statutory demand lawyers will work with you to negotiate and arrange to pay the debt with a satisfactory regime. It is here that our team’s extensive business experience and negotiation expertise works to obtain a satisfactory outcome to have the Statutory Demand withdrawn.

Hire The Best Sydney Lawyer Who Cares About Your Needs

Our specialist statutory demand lawyers at JCL Legal, based in Sydney CBD, have the expertise and experience to help you if you have been served with a Statutory Demand. Don't wait and you must act urgently; you have to act within 21 days of the service of the Demand. We can get you out of trouble and save your company. In many of the cases we deal with, the Statutory Demand is withdrawn before the matter goes to court.

A good Sydney lawyer like JCL Legal will be able to assist you with any legal issues in an efficient manner. To better your chances of meeting your goals in a timely manner, they can handle negotiations on your behalf and if needed, represent you in court.

During these uncertain times, if you're looking for the best family and divorce lawyer in Sydney, NSW, Jeffrey is available by mobile phone. Please call him on 0419 233 670.