In our recent article, we briefly summarised the common grounds for setting aside a statutory demand. In this article, we'll go into more detail regarding what is perhaps the most common challenge to a statutory demand: the 'genuine dispute'.
A statutory demand can be set aside if there is a genuine dispute regarding the basis or amount of the debt set out in the statutory demand.
A 'genuine dispute' has been described by the Courts in many ways, although the most accepted approach has been where there is 'a serious question to be tried' by the Court. In other words, a statutory demand can be set aside where there appears to be factual evidence that may require further investigations to establish the truth of the matter.
It is important to keep in mind that merely disagreeing with the statutory demand without particulars, or merely asserting a legal argument unsupported by the facts will not establish a genuine dispute.
The factual matters that the Court may consider in establishing a 'genuine dispute' include, but are not limited to:
- correspondence between the parties prior to the statutory demand being served;
- The contract between the parties; and
- A reasonable contention, supported by evidence (eg. photos), that the works or goods were performed/supplied incorrectly.
In practice, the tests for establishing a 'genuine dispute' are not overly difficult to satisfy, as long as the alleged debtor can assert a reasonable argument supported by factual evidence.
If the statutory demand is set aside due to a genuine dispute regarding the debt claimed, mediation is likely to follow, and if this is unsuccessful, the matter may proceed to Court.
This article is provided to the reader for general information. It is not legal advice. It was written by Alec Tonkin & Roger Kong and edited by Robert Webb, Senior Associate.
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