The courts do not lightly order a company into liquidation, and so. Second, if the debt is not a judgment debt, the legislation now requires that an affidavit which verifies that the debt is due and payable by the company be served with the statutory demand. A failure to respond to a statutory demand can have very serious consequences for a company. There is adequate information in the prescribed form of statutory demand to alert the.
Statutory demand templates winding up petition solicitors. Creditors statutory demand for payment of debt winding. Statutory demand for payment of debt, an important tool. Australian insolvency law regulates the position of companies which are in financial distress. If an individual or sole trader owes you money, the forms you need to use are.
Signature this form must be signed by a director or secretary. Guide to statutory demands for those presenting and receiving one. Notice of failure to execute deed of arrangement pdf form 509g. You also need to use form 508h for your statutory demand and ensure the demand. Form 5 statutory demand for payment of debt bankruptcy scotland act 2016 section 161i warning to person receiving demand please do not ignore this form if you do nothing in response to this demand, you could be made bankrupt and your property and goods taken away from you. Her honour also noted that the form prescribed for the statutory demand, form 509h, requires the creditor to state an address for service, and said that timely service at that address would satisfy s 459g3. Guide to statutory demands for those presenting and. Please read carefully this demand and notes for debtors. Posted on 18th april 2017 what is statutory demand. Furthermore, the procedure to issue these forms is very easy to follow. The debt amount can relate to one debt, or a number of debts. This form was amended in 2006 as part of amendments of the corporations regulations 2001. Youve been served with a statutory demand khq lawyers. Grounds to set aside a statutory demand national debtline.
Make and serve a statutory demand, or challenge one gov. This is the authors version of a work that was submitted. Creditors statutory demands defects in the supporting. This form assumes that the amount of the debt will be the foreign currency curve ball court decisions in two cases send mixed signals on the reasons for validating. Statutory demands are a formal way of asking for a debt to be paid get the forms to send, cancel or set aside a statutory demand. That on b the statutory demand exhibited hereto and marked a came into my hands. Section 459e3 of the act states that an affidavit accompanying a creditors statutory demand must comply with the corporations rules of the relevant court. Forms to serve a statutory demand individual or business. Statutory demand under section 2681a of the insolvency act 1986. Mandated form the statutory demand must be in the approved form form 509h.
Statement verifying report under s4301, 4752 or 446c2 pdf. Form 509h must be signed by the creditor andor the creditors solicitor. Affidavit in support of application to set aside statutory demand. A company who is served with a creditors statutory demand has a period of 21 days to either. Corporations regulations form 509h creditors statutory demand for. The demand must contain certain information, such as your details and those of the creditor and information about the debt the creditor is claiming.
Forms asic australian securities and investments commission. As described below, an application to set aside the statutory demand must be served on the demanding creditor. A creditors statutory demand for payment of debt form 509h is a formal demand for payment of an outstanding debt. The corporations act specifies the form a statutory demand must take. Corporations act 2001, commonwealth, australia, affidavit accompanying statutory demand, form 7 last modified by. Use of forms in schedule 1 subject to the provisions of paragraph 2, the forms in the schedule where applicable, and where they are not applicable forms of the like character, with such variations as. This information sheet has been prepared for litigants who intend to make a winding up application pursuant to s459p of the corporations act 2001 cth based on a companys failure to comply with a statutory demand. You can fill in application forms online and print them off to sign, date and send to court. Statutory demand debtor gets off on a technicality 09 december 2008 topics.
Corporations act 2001 sect 459e creditor may serve. Creditors statutory demand for payment of debt form 509h, in sched 2 to the corporations rules 2006 cth affidavit accompanying statutory demand unless its a judgment debt form 7, in sched 1 to the federal court corporations rules 2000 cth 1. There are strict requirements that a statutory demand must meet in order to be enforceable and there are significant risks to getting it wrong. Insolvency forms approved asic australian securities. However, the court can set aside defective demands that will cause substantial injustice. What do i do if my company is served with a statutory demand. An application must be made within 21 days after the demand is served and. Despite considerable litigation on what sort of defects will cause substantial injustice, no definitive principles have. Notice of termination of deed of company arrangement pdf form 509h.
Citation these rules may be cited as the bankruptcy forms rules. Form 7 affidavit accompanying statutory demand act legislation. Creditors can make a statutory demand for payment of a debt under section 459e of the corporations act as long as the debt is due and payable. We appear in court for bankruptcy and insolvency matters in the federal and supreme courts. Debt for liquidated sum payable immediately following a judgment. She accepted that other methods of service, such as by facsimile, may suffice, provided the documents actually come to the notice of the. Licensees lodging by email must retain signed original copies of the forms and attachments for a period of 7 years. Aitken whyte lawyers, a brisbane law firm dedicated to providing expert advice on liquidation, bankruptcy laws, debt recovery and insolvency. Companies which are served with a statutory demand have 21 days to.
This paper is about how a company, which has failed to set aside a statutory demand, can oppose an application to wind up the company in insolvency. The statutory demand must satisfy certain criteria. Corporations act 2001 presentation of 497 summary of affairs. The company owes the deputy commissioner of taxation of 26 franklin street. A statutory demand is a prescribed type of written request from a creditor for payment of a debt. A statutory demand can be set aside if it is defective in a formal sense. Lodgement period 7 days prior to the holding of the meeting of. If a debtor company is solvent, using a statutory demand as a means of forcing the company to. You should refer to the notes entitled how to comply with a statutory demand or have it set aside. Aug 31, 2016 what form should a statutory demand take. Opposing applications to wind up a company in insolvency. Presentation of summary of affairs of a company this guide does not form part of the form. Our lawyers offer advice and assistance in all statutory demand matters in.
A form 509h creditors statutory demand for payment of a debt is a written demand for payment served by a creditor on a company. The most usual means of service would be by posting a copy of the demand to the companys registered office. If you wish to have this demand set aside you must make application to do so within 18 days from its service on you. Where you see an asterisk in the form 509h then you are to keep one and delete the other. Creditors statutory demand, form 509h aitken whyte lawyers. Blank statutory demand form form sd 4 debt payable at future date statutory demand under section 2681a of the insolvency act 1986 blank statutory demand form sd 3 instruct specialist statutory demand solicitors.
Form 509h paragraph 459e 2 e corporations act 2001 creditors statutory demand for payment of debt to name and a. First, the legislation now specifies the form form 509h which the demand must take. Statutory demand for payment of debt stonegate legal. Whether you have a query on a specific case or youre looking for information on another aspect of aib. We appear in court for bankruptcy and insolvency matters in the federal and. We are expert statutory demand solicitors and have years of experience at both issuing and defending statutory demands. A statutory demand must be accompanied by an affidavit supporting statutory demand where there is no judgment. You should identify each individual debt and its amount and the total of the debts be inserted into the statutory demand to eliminate the possibility of challenge. A statutory demand is a formal demand for payment of a debt owed by a company, issued pursuant to part 5. If you wish to have this demand set aside you must make application to do so within 18 days. For the period of 12 months after the commencement of those amendments a person may comply with paragraph 459e2e of the corporations act 2001 in relation to a statutory demand for payment of debt by using. But when issuing a statutory demand there are many risks associated that you must be aware of. In this post we adopt the perspective of the debtor company and consider the serious consequences of being served with a statutory demand. The law assumes it merely paves the way for a bankruptcy or winding up petition, but the threat of a petition can spur repayment from even the most unwilling debtor.
Companies which are served with a statutory demand have 21 days to apply to the court to have it set aside. Please set the page orientation to landscape for printing of bilingual texts on a single page. Statutory demands for creditors knowledge clayton utz. Winding up proceedings based on an unsatisfied statutory demand about this information sheet.
Form 509h requires that a statutory demand should include an address for service of the documents in the state or territory in which the demand is served on the company. The prescribed form of a statutory demand is statutory demand form 509h outlined in schedule 2 of the corporations regulations 2001 cth. Creditors statutory demand for payment of debt, form 509h statutory demands. This article tells you how to draft a statutory demand form 509h. A creditors statutory demand must be in the prescribed form referred to as a form 509h. If your company is served with a statutory demand, then you must within 21 days either pay the debt or made make an application to either the supreme court or federal court to have the statutory demand set aside. A company who is served with a creditors statutory demand has a period of 21 days to either pay the amount owed, reach an agreement with the creditor for payment of the debt or approach the supreme court to have the statutory demand set aside.
Statutory demands for unpaid debts getting them right by david bailey, barrister released july 2005. Licensees lodging by email must retain signed original copies of the forms and attachments for a. A statutory demand is a formal demand made by a creditor for payment of a debt of at least. The corporations regulations 2001 provide that the relevant form to use is form 509h. A debtor company can also apply to set aside a statutory demand on various. That is, a statutory demand provides no guarantee to a creditor that it will recover the original debt, even if successful. A creditor owed a debt of at least the statutory minimum, by a company, may serve a statutory demand on the company for payment pursuant to the provisions of the corporations act 2001 1. Statutory demands for unpaid debts getting them right. In particular, it may result in the company being placed in liquidation and control of the company passing to the liquidator of the company. Defects in the demand a statutory demand can be set aside if it is defective in a formal sense. The risks of issuing a statutory demand in australia jma. The statutory demand must be in the prescribed form form 509h found in schedule 2 of the corporations regulations and if it is not based on a judgment debt. Corporations act 2001 affidavit accompanying statutory demand author.
A statutory demand is a formal written request for payment of debts owed by a company. The statute specifies the form of the demand, and requires that the demand. Corporations act 2001 sect 459e creditor may serve statutory demand on company 1 a person may serve on a company a demand relating to. This demand is called a creditors statutory demand and is issued using form 509h.
A recent decision of the chief justice of queensland illustrates how statutory demands can be set aside for what might seem to be relatively minor errors. The statutory demand form actually says omit if inapplicable. When you draft a statutory demand form 509h, you must then clearly identify the amount of the debt. Once you have prepared your statutory demand it must be served in accordance with s109x corporations act. The form 509h is fairly simple to complete and must be accompanied by an affidavit from or on behalf of the creditor verifying that the debt is due and owing. Brisbane debt recovery, insolvency, bankruptcy lawyers, solicitors. A statutory demand is an ancient but still incredibly powerful debt collecting device. Noncompliance by a company with a demand is the most common way to prove insolvency of a company and is a ground for winding up in insolvency. Dealing with statutory demands macks advisory corporate. Fact sheet 36 ew statutory demands statutory demands page 1. This is a useful way of putting pressure on a company to pay an outstanding debt. Section 459e2e of the act requires that the demand be in the prescribed form, if there is one. Section 459g of the corporations act 2001 provides that a company served with a demand may apply to a court having jurisdiction under the corporations act 2001 for an order setting the demand aside.
Statutory demand debtor gets off on a technicality. Contains a complete list of asics forms and applications and includes information about fees, lodging periods, and how to submit each form. In short, a creditor can issue a statutory demand by completing and signing a corporations regulations form 509h and serving it on the company by mailing it to the companys registered office. For official versions of these forms, please refer to schedule 1 of the federal court corporations. A statutory demand is a formal demand on a set form for an unpaid debt from an individual or a company, where the sum owed is over. A demand may be thrown out if it does not substantially comply with the form specified by the act, or if the debtor company has been mislead by the demand. Statutory demands gets an uplift from 6th april 2017. Insolvency forms approved new approved forms starting from 1 march 2017 and 1 september 2017. It is vital that this is done correctly, as one of the ways that a debtor can apply to set aside a demand is that there are formal defects in the demand. It is included by asic to assist you in completing and lodging the form 509. However, the act imposes strict requirements for a statutory demand. To print the whole chapter in html, please click at the bottom of the toc panel and then click. How to draft a statutory demand form 509h stonegate legal. Forms to lodge application under the federal court corporations rules.
It is vitally important that the form is completed correctly. Most creditors must send you a statutory demand before trying to make you bankrupt. Forms schedule 2 form 509h corporations regulations 2001 11 form 509h paragraph 459e 2 e corporations act 2001 creditors statutory demand for payment of debt to name and a. In brief statutory demands under section 459e of the corporations act. Corporations act 2001 presentation of 497 summary of. Form 509h paragraph 459e2e corporations act 2001 creditors statutory demand for payment of debt to example company pty ltd a. Take steps to have a debt paid before issuing a statutory demand. Creditors statutory demand for payment of debt winding up strict compliance with form 509h required. Creditors statutory demand for payment of debt rtf. Make and serve a statutory demand, or challenge one. When a company owes you money you may believe that issuing a statutory demand is the best course of action to recover the outstanding funds. A statutory demand for payment of debt is an important tool for creditors in getting payment from reluctant debtors andor pushing for insolvency.
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