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Subject Code Lecturers Name Tutors Name Subject Name Due Date Student Family Name

CO5121 Marcus Katter

Law of Business 23/05/12 Student Given Name Shibin Jayaprasad 1 2 6 JCU Student Number 4 9 2 5 2

Declaration
1) 2) 3) 4) 5) 6) This assignment is my/our original work and no part has been copied from any other persons work or from any other source except where acknowledgement has been made. I/We hold a copy of this assignment and can produce a copy if requested. This assignment has not been written for me/us by any other person. This work has not been submitted for any other course/subject. This work may be photocopied and/or communicated for the purpose of identifying plagiarism. I/We give permission for a copy of this marked assignment to be retained by JCU Brisbane for the purpose of course reviews by external examiners.

Student Signature(s)
Signed 1: Shibin.Jayaprasad__________Date:_23/05/2012 Signed 4: ________________________Date:___/___/___ Signed 2: _________________________Date:___/___/___ Signed 5: ________________________Date:___/___/___ Signed 3: _________________________Date:___/___/___ Signed 6: ________________________Date:___/___/__

(a)

What relief was the Applicant seeking in this matter.

The Workers Compensation Nominal Insurer had its Scheme Agent as Cambridge Inegrated Services Australia Pty Ltd ACN 111 480 141 they had the money owing by BTBF as a premium payable for its workers compensation insurance. So for this relief BTBF Plumbing Pty Ltd had applied to set aside a statutory demand based on a judgment obtained by Workers Compensation Nominal Insurer by its Scheme Agent Cambridge Integrated Services Australia Pty Ltd.1

(b)

Why was Applicant successful/unsuccessful.

Yes. The applicant was successful because of the following reasons Unconscionability The first issue is the effect of the statement by Ms Heng in her email of 2 March 2011 that once your client has lodged its appeal, we shall await WorkCovers instructions and determination before proceeding to the next step. The use of the word determination is a clear indication that the respondents intended to await the result of the appeal before proceeding to enforce the judgment they had obtained.2 Alleged uncertainty in the description of the creditor BTBF also relied on the uncertainties implicit in the description of the plaintiff in the District Court proceedings and then the statutory demand which described the creditor as Workers Compensation Nominal Insurer of c/- Cambridge Integrated Services Australia Pty Ltd t/as Xchanging, Level 2, 201 Elizabeth Street, Sydney NSW 2000. That is a compendious description of two separate legal entities who are the respondents to this application, namely Workers Compensation Nominal Insurer as the first respondent and Cambridge Integrated Services Australia Pty Ltd ACN 111 480 141.3 Court will set aside a demand served where it is served after a debtor has been told that the creditor will not enforce the debt. The Supreme Court of Queensland ruled on 15 December 2011 that a statutory demand be set aside where the creditor told the debtor that they would not proceed to enforce the debt until an appeal was determined and more instructions given. This means that if there is some agreement or representation by the creditor that the debt will not be enforced until a pre-condition is satisfied then any attempt to enforce that debt by statutory demand can be set aside pursuant to s459J(1)(b) of the Corporation Act which states: On an application the Court may by order set aside the

Supreme Court of Queensland (2011, December 21). Douglas J. BTBF Plumbing P/L v Workers Compensation Nominal Insurer & Anor [2011] QSC 394 (15 December 2011) . Retrieved May 22, 2012, from http://www.austlii.edu.au/au/cases/qld/QSC/2011/394.html
2

Supreme Court of Queensland (2011, December 21). . Unconscionability BTBF Plumbing P/L v Workers Compensation Nominal Insurer & Anor [2011] QSC 394 (15 December 2011) . Retrieved May 22, 2012, from http://www.austlii.edu.au/au/cases/qld/QSC/2011/394.html
3

Supreme Court of Queensland (2011, December 21). . Alleged uncertainty in the description of the creditor BTBF Plumbing P/L v Workers Compensation Nominal Insurer & Anor [2011] QSC 394 (15 December 2011) . Retrieved May 22, 2012, from http://www.austlii.edu.au/au/cases/qld/QSC/2011/394.html

demand if it is satisfied that there is some other reason why the demand should be set aside.4

(c)

What is a statutory demand.

The purpose of the statutory demand regime in Part 5.4 of the Corporations Act 2001 (Cth)1 is to create a situation where a company that owes money to creditors cannot delay matters by putting on 'colourable defences' to liquidated claims. Instead, unless the company can show a genuine dispute about the claim, a presumption of insolvency arises if the debt is not paid. This serves the public interests by preventing or discouraging insolvent companies from continuing to trade. Statutory demands are commonly used by creditors as a means of seeking to require a company to pay its debts.5 A statutory demand is a formal demand served pursuant to s509H of the Corporations Act (2001). If it is ignored for 21 days, then the company will be presumed insolvent, and any creditor can apply for the company to be wound up. It is imperative that the Directors of companies understand the importance of these demands, and the need to act quickly when one is received.6

(d) Describe the circumstances in which a statutory demand may be set aside. Refer to circumstances discussed in this matter
The court may set aside the statutory demand if it is satisfied that: (a) there is a genuine dispute about the existence or amount of the debt(s) to which the demand relates (s459H(1)(a)); (b) the company has an offsetting claim against the creditor (s459H(1)(b)); (c) because of a defect in the demand, a substantial injustice will be caused unless the demand is set aside (s459J(1)(a)); or (d) there is some other reason the demand should be set aside (s459J(1)(b)).7 Examples of circumstances that the Court has found to constitute "some other reason" include: where there are deficiencies in the affidavit supporting the statutory demand. Examples of such deficiencies include: where the accompanying affidavit has been sworn before the statutory demand
4

Statutory demand set aside where the creditor agreed not to enforce the debt.. (2011, December 17). Irsish Bentley Lawyers. Retrieved May 21, 2012, from http://www.irishbentley.com.au/2011/12/17/statutory-demand-set-aside-where-the-creditor-agreed-notto-enforce-the-debt/
5

Prestwich, C., & Fisher, A. (2011, November 30).Introduction. STATUTORY DEMANDS. Retrieved May 21, 2012, from http://www.allens.com.au/pubs/pdf/insol/papinsol30nov07.pdf
6

Statutory demand set aside where the creditor agreed not to enforce the debt.. (2011, December 17). Irsish Bentley Lawyers. Retrieved May 21, 2012, from http://www.irishbentley.com.au/2011/12/17/statutory-demand-set-aside-where-the-creditor-agreed-notto-enforce-the-debt/
7

Prestwich, C., & Fisher, A. (2011, November 30). Setting aside statutory demands. STATUTORY DEMANDS. Retrieved May 21, 2012, from http://www.allens.com.au/pubs/pdf/insol/papinsol30nov07.pdf

and no updating affidavit has been filed: Wildtown Holdings Pty Ltd v Rural Traders Company Ltd ;31 and where the deponent of the accompanying affidavit has failed to state that he or she believes that there is no genuine dispute about the existence or amount of the debt: IFA Homeware Imports Pty Ltd v Shanghai Jerrys Candle Co Ltd ; 8 The Corporations Act however makes limited provision for applications by the company to apply to have statutory demands set aside. There are two common grounds for such applications, which are that the debt upon which the demand is based is disputed and the respondent has an offsetting claim (see s 459H of the Corporations Act, Determination of application where there is a dispute or offsetting claim).9 The Anti-Suit Provisions of the Act suggested that the respondent should not be entitled to rely on either of those grounds, but the courts have found differently.10 The circumstances referred in this case is about: Because there was some agreement or representation by the creditor that the debt will not be enforced until a pre-condition is satisfied then any attempt to enforce that debt by statutory demand can be set aside pursuant to s459J(1)(b) of the Corporation Act. Thats is the reason court set aside a demand served.

Prestwich, C., & Fisher, A. (2011, November 30). Some other reason for setting aside the demand. STATUTORY DEMANDS. Retrieved May 21, 2012, from http://www.allens.com.au/pubs/pdf/insol/papinsol30nov07.pdf
9

see s 459H of the Corporations Act 2001 Statutory Demands in the context of the Corporations Act and Security of Payment Legislation. (n.d.). Find law Australia. Retrieved May 21, 2012, from http://www.findlaw.com.au/articles/4299/statutory-demands-in-the-context-of-the-corporatio.aspx
10