Australia: The statutory demand minefield: lessons from recent set aside applications

Clayton Utz Insights

Key Points:

These three cases illustrate that strict compliance with legislative requirements continues to be imperative when serving statutory demands.

Despite what appears to be a fairly straightforward legislative regime, creditors' statutory demands appear to generate an entirely disproportionate volume of litigation in the courts. The drastic consequences of failing to comply with a creditor's statutory demand warrant very strict compliance by creditors with the technical requirements of the regime.

Nonetheless, the regular feed of reported decisions on applications to have creditors' statutory demands set aside gives rise to a seemingly unrelenting tide of novel issues and often conflicting outcomes on known issues. Recent questions canvassed by the courts include:

  • Is an affidavit verifying a statutory demand sworn 13 hours before the statutory demand is signed valid?
  • Can a single set aside application be used to defeat three different statutory demands?
  • When will a court award a debtor costs on withdrawal by a creditor of its statutory demand?

Is an affidavit verifying a statutory demand sworn 13 hours before the statutory demand is signed valid?

In Wollongong Coal Ltd v Gujarat Nre India Pty Ltd [2015] FCA 221, Gujarat Nre India Pty Ltd served a statutory demand on Wollongong Coal Ltd, along with a verifying affidavit which had been sworn on the day before the statutory demand was signed.

Wollongong Coal filed an application setting aside the statutory demand pursuant to section 459G of the Corporations Act 2001 (Cth) on a number of grounds, including that the verifying affidavit pre-dated the statutory demand. Gujarat submitted that:

  • the verifying affidavit was sworn only 13 hours (rather than one or more days) before the statutory demand was signed; and
  • to cure a defect in the verifying affidavit, an updating affidavit could be filed and which did not have to be served within the 21 day time period available to a debtor to apply to set aside the statutory demand.

Justice Wigney dismissed both arguments noting that an affidavit sworn on the same day as the statutory demand could verify the debt but not one which was sworn on the preceding day. Further, while an updating affidavit may cure a verifying affidavit, it could only do so if served within the 21 day time period available to the debtor to set aside the demand. Gujarat's statutory demand was set aside.

Can a single set aside application be used to defeat three different statutory demands?

In Greenhills Securities Pty Ltd v Loire Consultants Pty Ltd [2015] NSWSC 13, the first defendant, Loire Consultants Pty Ltd served two statutory demands on Greenhills Securities Pty Ltd. A third statutory demand was served on Greehills by the second defendant.

Greenhills filed one application pursuant to section 459G of the Act seeking to set aside the three statutory demands. In that application, it sought separate orders in respect of each demand.

Justice Ball noted that different judges have different approaches to the need for a debtor to file separate applications in respect of multiple statutory demands, issued by separate creditors in respect of separate debts. For example, in Help Desk Institute Pty Ltd v Adams [1998] NSWSC 586 the Court held that if the legislature intended that there could be one application in respect of more than one demand, then section 459G(2) of the Act would have expressly dealt with that situation.

However, in this case, there was no difficulty applying the provisions of section 459G of the Act to the separate orders sought in the single application. The statutory demands had a "common underlying factual basis" making it convenient for the demands to be dealt with together.

When will a court award a debtor costs on withdrawal of a statutory demand?

In Polytrade Pty Ltd v Glass Recovery Services Pty Ltd [2015] VSC 164, Glass Recovery Services Pty Ltd served a statutory demand on Polytrade Pty Ltd which it subsequently withdrew. The following day, Polytrade filed an application seeking to have the statutory demand set aside pursuant to section 459G of the Act, despite the statutory demand having been withdrawn. During the proceedings, Polytrade conceded that it filed the application to obtain an order for indemnity costs in its favour.

Associate Justice Randall dismissed Polytrade's application because "there [was] no reason to depart from the usual rule that costs follow the event". His Honour noted that in all cases where costs had been awarded in favour of a debtor, the withdrawal of the statutory demand had occurred after the debtor had commenced proceedings.

While costs may be awarded in favour of a debtor if a creditor engages in conduct (such as, delay in withdrawing a statutory demand) which induces a debtor to file an application setting aside the statutory demand, in this case, Glass promptly withdrew the statutory demand on becoming aware of a dispute in relation to costs alleged by Polytrade.

Strict compliance the key to statutory demands

These three cases illustrate that strict compliance with legislative requirements continues to be imperative when serving statutory demands.

Further, where multiple statutory demands are served on a debtor a single set aside application seeking separate orders in relation to those demands can be made if the demands share a common underlying factual basis.

Finally, in the context of a set aside application where the statutory demand has already been withdrawn, the court will not exercise its discretion to award costs in favour of a debtor in the absence of delay by a creditor in withdrawing or failing to withdraw a demand such as to induce the debtor to file the set aside application.

Considered separately, each of the cases deals with a discrete and unique issue. Taken together, they augment the existing and constantly evolving body of law on creditors' statutory demands. The challenge for practitioners, creditors and debtors alike is to stay abreast of these developments so as to avoid pitfalls in preparing and serving demands and to identify bases on which to challenge those demands which are defective.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.