Company statutory demand dispute

Defending a company statutory demand

For a company to defend a statutory demand, it must show either

• that the statutory demand debt is disputed on substantial grounds. Substantial grounds are subject to various different comments in the courts but those grounds must be real as opposed to “frivolous” and a “mere honest belief that payment is not due” is simply not sufficient; or
• the debt is subject to a valid counterclaim or cross claim – ie the creditor owes money to the debtor which would effectively extinguish the debt claimed; or
• the debt has already been paid; or
• the creditor already has security for the debt; or
• there is a procedural defect with the statutory demand itself.

The need to act quickly

If a company is faced with a statutory demand which it believes is disputed and can be defended, it needs to act quickly. Failure to do so within the right time period can lead to a winding up petition being issued. This should be avoided at all costs.

The quicker you get in contact with the creditor setting out the reasons for dispute, the higher the likelihood is that creditor will agree not to proceed with statutory demand enforcement.

Statutory demands based on a Judgment debt

If the statutory demand is based on a judgment, it is not possible to dispute the statutory demand . By that stage, it is too late for the company to dispute the demand as the court judgment is binding unless it is set aside. Set aside of a judgment can only be done in limited circumstances and must be done quickly. If such an application was made, it would have the effect of putting the statutory demand on hold.

Whatever the nature of your enquiry, our expert team can help. We provide an expert friendly service aimed at achieving your goals.