Victorian Supreme Court confirms that an application to
set aside a statutory demand can be served electronically, and the
Court's evaluation of a genuine dispute concerns the
establishment of a genuine level of claim, and not the likely
result of the claim.
A Creditor served Greenmint Pty Ltd (Greenmint)
with a statutory demand for the payment of $105,128.00 owing under
a Deed of Loan (Deed) between the parties. The
statutory demand was dated 23 March 2015 and served on 24 March
2015. Greenmint subsequently brought an application under section
459G of the Corporations Act 2001 (Act)
to set aside the statutory demand. Pursuant to the Act, a debtor
has 21 days from the receipt of a statutory demand to file and
serve an application to have the demand set aside. Failure to do so
creates a statutory presumption of insolvency under the Act.
THRESHOLD ISSUE OF EFFECTIVE SERVICE
The Creditor claimed that Greenmint had not made its application
within the 21 day time period prescribed by the Act. Greenmint was
required to file and serve its application at the address nominated
by the Creditor by no later than 14 April 2015. The Creditor had
nominated his solicitors as the address for service in the
statutory demand, and had provided a street address, but not a
facsimile number or email address.
The Creditor claimed that the application and supporting
affidavit was received by him on 15 April 2015, under a cover
letter dated 14 April 2015, and was therefore served a day late.
However, an email sent to the Creditor's solicitors, and a
facsimile confirmation, showed receipt of the documents by email
and facsimile on 14 April 2015.
Relying on the approach of Austin J in Austar Finance Group
Pty Ltd v Campbell, Gardiner AJ resolved that whilst the
general authorities provide that service should be effected by
performing service at the address specified in the statutory
demand, where it is shown that those documents have actually been
received in a readable format by the nominated person, that service
will be effective. Gardiner AJ determined that the documents
transmitted by facsimile and e-mail were received in a readable
format by the Creditor's solicitors, and as such, service had
been validly effected within the 21 day period.
WAS THERE A GENUINE DISPUTE IN RELATION TO THE DEBT?
Under section 459H of the Act, in determining an application to
set aside a statutory demand, the Court must be satisfied that
there is a genuine dispute about the existence or amount of the
debt to which the demand relates, and/or that the debtor has an
The Court paid regard to the principles espoused in
Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd,
where the court held:
there must be a genuine dispute about the existence or amount
of the debt, without in-depth examination or determination of the
the applicant is required only to establish a genuine dispute,
not to advance a fully evidenced claim.
Gardner AJ also agreed with the comments of Thomas J in Re
Morris Catering (Aust) Pty Ltd, who stated that it is not
helpful to perceive that one party is more likely than another to
succeed, but that the essential task is relatively simple –
to identify the genuine level of a claim, and not the likely result
Applying this reasoning, the Court gave short shrift to the
arguments raised on behalf the debtor which included that there was
a misrepresentation at the time of entering into the Deed, or that
the high level of interest payable under the Deed amounted to a
Whilst it is always advisable to serve an application to set
aside a statutory demand at the address stipulated by the creditor
in the demand, the Court has taken a common sense approach to the
issue of service in this case, finding that electronic service of
the application and supporting affidavit is effective, where it is
shown that the intended recipient did receive the documents.
The Court also provided a timely reminder that whilst it will
not delve into the prospects of a genuine dispute in connection
with a debt, it will also safeguard the integrity of the statutory
demand process by scrutinising the validity of an alleged
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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