Common defects and risks
In short
Common defects include an incorrect debt amount, a defective or missing supporting affidavit, errors in the prescribed form (Form 509H), and improper service. Any of these can allow the debtor to set the demand aside, sometimes with costs. Careful preparation — and legal review — reduces these risks.
Statutory demands are frequently challenged on technical grounds. Understanding the common defects is the best way to avoid them.
Common defects
- Overstating or misstating the amount of the debt.
- A defective or missing supporting affidavit for a non-judgment debt.
- Errors in the prescribed form (Form 509H).
- Improper service on the company.
- Issuing over a genuinely disputed debt.
Reducing the risk
Most defects are avoidable with careful drafting and a proper review before the demand is served. That is whyStatutory Demand Online has every demand reviewed by a lawyer before it goes out.
Do not use a statutory demand for a genuinely disputed debt. If the debtor disputes the debt on genuine grounds, or has an offsetting claim, a statutory demand can be set aside and cost orders may follow. If in doubt, seek advice before proceeding.
References
- Corporations Act 2001 (Cth) — incl. s 459E (statutory demand)
- Corporations Regulations 2001 — prescribed form and statutory minimum
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