Statutory demands can be issued by a creditor to a debtor company to demand payment of a debt due and owing. Failure to respond to the demand may result in the debtor company facing a winding-up application based on the company’s presumed insolvency.

However, there are several avenues available to a debtor company to apply for a court order setting aside a demand. The most common grounds are found in section 459H of the Corporations Act 2001 (Cth), where a company can claim:

Since the start of 2023, we have seen an uptick in the number of new matters and inquiries regarding debts, insolvency, enforcement of securities and distressed assets due to increased pressure on the financial position of the counterparties.

The High Court’s recent decision in Bryant & Ors v. Badenoch Integrated Logging Pty Ltd [2023] HCA 2 (Gunns case) has important implications for liquidators and companies, as it has removed liquidators’ unfair advantage in unfair preference cases.

From 1 July 2012, all insolvency notices must be registered with the Australian Securities and Investments Commission (ASIC) on its new online register at www.insolvencynotices.asic.gov.au. Consequently, ASIC’s online register now serves as a comprehensive noticeboard of companies’ affairs in relation to insolvency. More importantly, it provides important information for creditors.