In Austech Institute for Further Education Pty Ltd v
Britt  NSWSC 56, the plaintiff (Austech) applied to set
aside a statutory demand in respect of a debit of A$260,901 on the
basis that the affidavit verifying the statutory demand was
The affidavit was sworn by the solicitor for the defendant
creditor who deposed that:
"Based on my perusal and
knowledge of the Lease and the notices sent to the Debtor Company
from the creditor's managing agent ... I am aware of the
circumstances giving rise to, and the state of, the indebtedness of
the Debtor Company to the Creditor.
I believe that there is no genuine dispute about the existence or
amount of any of the debts".
Austech submitted that the evidence of the solicitor as to the
existence of the debt and regarding the absence of a genuine
dispute was hearsay. It relied on a number of authorities including
Faji (Australia) Constructions Pty Limited v AC Professional
Accounting Pty Ltd  NSWSC. In that case, the supporting
affidavit was also sworn by the creditor's solicitor who
"I have knowledge of the
facts stated in the attached statutory demand.
I believe that the amount of ... being the debt due specified in
the accompanying demand, is due and payable by the debtor to the
I believe these matters to be true.
I believe there is no genuine dispute about the existence or
amount of the debt ...".
In Faji, Barrett J held that "having regard to
that content, it is clear that the deponent solicitor does not
identify the source of the knowledge which he considers enables him
to make the statements he makes". His Honour set aside the
In Austech, Palmer J held that the solicitor had stated
the source of his knowledge of how the alleged debt arose and how
it was quantified. However, the solicitor did not state the source
of his belief that the debt was not genuinely disputed and in that
regard the affidavit was "glaringly deficient". Palmer J
set aside the statutory demand.
Palmer J commented that "this case affords a salutary
reminder that, as a general rule, statutory demands ought not to be
supported by an affidavit from the creditor's solicitor".
His Honour said that it will usually be difficult for a
creditor's solicitor to inform himself or herself adequately of
"the matters in relation to the debt" required to be
verified under Rule 5.2. Palmer J said that "it is highly
desirable, as a general rule, that the creditor himself or herself,
or a properly qualified officer of a corporate creditor, should
make the affidavit under s 459E(3), rather than the creditor's
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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