As one of Perth’s leading Law Firm’s Havilah Legal is often asked in matters of debt recovery against a company whether it is preferable to issue a General Procedure Claim in the Magistrates court or alternately send a statutory demand notice to the debtor company?

It is important to tread carefully here when issuing or receiving the statutory demand as the consequences to the company of receiving a statutory demand are just as serious as the consequences of having costs awarded against the issuer of the demand is set aside by the court.

The seriousness for the company receiving the notice is a presumption of insolvency which must be attended to immediately with legal advice. Setting aside a statutory demand is difficult and requires significant relevant evidence to establish the test.

That test was recently set out by Master Sanderson in Complete Hire and Sales Pty Ltd v Terra Firma Constructions Pty Ltd [2018] WASC 138 making it clear what is required to show a sufficient claim to justify setting aside a statutory demand.

From the initial affidavit pegging out the area of controversy to any supporting evidence filed in the court, there must be sufficient controversy that goes beyond the vague and uncertain.

If your company received or is contemplating the issuing of a statutory demand then I urge you to seek advice first to avoid dealing with consequences that you didn’t intend.

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