Setting aside statutory demands

If ignored, a statutory demand can be a death sentence for your company.

If you don’t pay the debt or apply to a court within 21 days, your company is presumed insolvent and may be liquidated. Act now! 

A creditor’s statutory demand for payment of a debt (Form 509H) is the corporate equivalent of a bankruptcy notice. It requires a company to pay a debt within 21 days or apply to a court to set the demand aside. A company that does neither will be presumed insolvent and the creditor will then be able to issue winding up proceedings.

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How we can help you

At an assessment we will give you advice on your prospects of having the demand set aside. If the matter cannot be resolved by negotiation, we offer fixed price court representation.


$385 inc GST

If you dispute the debt or believe you have an offsetting claim against the creditor, we will review the situation and advise you of your chances of having the demand set aside.

We will provide you with a fixed price quote for a Negotiated settlement or Court hearing after we have considered the matter at an Assessment.

Negotiated settlement

We will:

  • prepare an affidavit explaining why the demand should be set aside; and
  • before incurring court fees, send a copy to your creditor and invite them to withdraw the demand.

If your affidavit raises a genuine dispute, a sensible creditor will withdraw the demand to avoid the risk of paying your legal costs.

Court hearing

If the matter is not resolved by negotiation, we will:

  • file your application and supporting affidavit at the Supreme Court of Western Australia;
  • attend one directions hearing;
  • prepare written legal submissions; and
  • prepare for and represent your company at the court’s hearing of your application.

If you succeed, the court will usually order the creditor to pay your legal fees assessed by reference to the court’s scale.


What is a statutory demand?

A creditor’s statutory demand for payment of a debt (Form 509H) is the corporate equivalent of a bankruptcy notice. It requires a company to pay a debt within 21 days or apply to a court to set the demand aside. A company that does neither will be presumed insolvent and the creditor will then be able to issue winding up proceedings.

What happens if a liquidator is appointed to my company?

The liquidator is required to act in the interests of the creditors. He/she takes control of the company and its assets and manages its affairs without reference to the directors. He/she will sell the assets and may pursue any of the company’s claims against others – including its directors! The liquidator’s fees are payable from the company’s assets. The liquidator must lodge a report with ASIC as to the company’s affairs. Ultimately, the company will be deregistered.

If the demand is set aside, is the debt extinguished?

No. If you successfully set aside the demand, it is open for the creditor to commence court proceedings against you in the usual way. In an application of this sort, the court is only looking at whether there is a genuine dispute or a genuinely asserted offsetting claim – it does not finally decide who is right.

Can I recover my costs from the creditor?

You will usually be entitled to an order that the creditor pay your costs if you are successful in setting aside the demand. These costs are assessed in accordance with a legislative scale and are usually less than what you pay us.

Can I prepare the application myself?

No, the court rules require a company to be represented by a lawyer. Further, the law in this area is very technical and minor mistakes can be fatal to the application.

When should I contact you?

Immediately. If you don’t pay the debt within 21 days or apply to the court to set it aside, you cannot later challenge the demand.

The sooner you contact us, the more options we will be able to offer you. Whilst we will always do our best to help you, it takes time to prepare a court application. If you delay, we may not be able to assist you.

On what grounds can I challenge a demand?

You may be able to challenge a demand if:

  • you dispute you owe the creditor the money;
  • the creditor owes you money (i.e. an offsetting claim);
  • if the demand is defective and that defect results in a substantial injustice (for example, the demand does not clearly state the amount you must pay); or
  • for some other reason (for example, the demand is an abuse of process).

When can I apply to set aside the demand?

You must file and serve your application on the creditor within 21 days of receiving the demand. It is not possible to extend this deadline.

Meet our team

We’re a tight-knit, multi-disciplinary team of lawyers, legal executives, accountants and software developers.  We’re also passionate community leaders, sportspeople, podcasters, musicians, parents… and proud that these interests inform our professional lives.

Legal Practitioner Director
Nigel is an experienced lawyer who leads the firm’s litigation and dispute resolution team. Having worked for Birman & Ride since 2011, he has experience in a wide variety of litigation matters including deceased estate litigation, family provision claims,……
Angus joined the team in 2018 as part of the firm’s law cadetship program while studying his juris doctor. He subsequently graduated from UWA with a juris doctor in 2021 and was admitted as a lawyer in April 2022…….

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Our experienced lawyers provide great service at competitive prices.
Benefit from our experience

We’re a law firm with more than 35 years’ experience in litigation and dispute resolution. From straightforward debt collection to Supreme Court trials, these are core services of our firm.

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Our goal is to anticipate your needs and exceed your expectations. We offer friendly and efficient service. Read what our clients say.


What our clients say

Thanks to your hard work and expertise, we achieved a positive outcome that made the level of effort worthwhile. Your support and guidance gave [us] peace of mind, and we could not have asked for a better advocate. We are very grateful for your expertise in this matter and the subsequent outcome!!!
Ms G - Property law matter
October 25, 2023
A ‘promising’ start, thank you.
April 23, 2023
Thank you so much Nigel for all of your help. You don’t know how much all of your help and your team’s help have helped me a lot in life. It was such a long and struggling years for me. I could not have done it without your help.
Ms P
April 18, 2023
Dear Nigel – Thank you! It was confirmed yesterday that the settlement agreement funds for [client] were received. [Client] is eternally grateful to you and your firm for your tenacity, ethics, compassion expertise and professional manner in how you dealt with the matter and expediting the process. [Clients] and I can now move forward and will have sincere appreciation for your efforts to resolve this matter and end our day and night mental anguish. Thanks for the resolution. We as a family sincerely thank you.
Mr W
March 31, 2023
Pleased with all aspects, very professional & attentive to our requirements and clarified clearly pros & cons of what we were trying to achieve. Highly recommended.
Mr D
February 23, 2023
Overall very professional from arranging consultation & then the actual consult with Nigel who clearly knew the area of law relative to our enquiry. Nigel’s advice was clear & concise & provided an area in the covering regulations/code which we should pursue to achieve a satisfactory outcome.
January 17, 2023

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