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.

Assessment

$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.

FAQs

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.

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.

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.

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.

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.

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.

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).

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.

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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,……
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Angus joined the team in 2018 as part of the firm’s law cadetship program. He holds a Bachelor of Arts from UWA, majoring in Politics & International Relations and Business Law, and is currently studying the Juris Doctor at……
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Grace joined Birman & Ride in 2020 as part of the firm’s law cadetship program. Grace comes from a background of hospitality and retail work, where she gained valuable skills in customer service. At Birman & Ride, Grace works……
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Sriram Srikrishnan (Sri) is a lawyer at Birman & Ride and works in the Wills and Estates and Litigation teams. Sri assists people to prepare Wills, applications for Probate and administer deceased estates. He also enjoys being creative with……

Why choose us

Our experienced lawyers provide great service at competitive prices.
01.
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.

02.
Excellent value for money

We price our services fairly and transparently. We advertise fixed prices for standard services. Otherwise, we will analyse your requirements before issuing a written quote.

03.
100s of happy clients

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

Testimonials

What our clients say

BR Legal handled an insurance claim on behalf of my disabled sister. Even the claim amount was relatively small, it was quite important to her. Nigel Siegwart treated the case with the same professionalism and efficiency that I would expect only large accounts to be accorded. The amount my sister received was far greater than the cost of service provided and will make a difference to her life. I have no hesitation in recommending BR Legal to any prospective customer.
Mr F
December 2, 2021
Thank you to a very Professional team. I feel confident in negotiating with sibling conflict. Looking forward to an outcome of deceased estate.
Ms J
October 26, 2021
Excellent Service as always – Professional service is impeccable and always keeping client up to date and well informed.
Ms T
October 23, 2021
[after a positive resolution] That’s great news and a weight off my shoulders… Many thanks for your advice and resolving this so efficiently.
Mr G
October 8, 2021
Timely, precise, professional, and thoughtful legal advice – laid out in an understandable and logical manner. What a breath of fresh air!
Mr P
October 1, 2021
You guys doing a great job and the bills they’re always current and correct thank you very much
Ms N
September 15, 2021

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