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ARTICLE · 14 MARCH 2022

Court Sets Aside Statutory Demand Premised On Poorly Drafted Deed

Corrs Chambers Westgarth
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The Court's decision is a warning to drafters of guarantees to ensure that any guarantee is clear and unambiguous.

AustraliaCorporate/Commercial Law
Cameron Cheetham
Cameron Cheetham
Mark Wilks
Mark Wilks
Craig Ensor
Craig Ensor
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This week's TGIF examines the decision of the Supreme Court of New South Wales in In the matter of Jana Pty Ltd [2022] NSWSC 112, considering whether a 'genuine dispute' exists in relation to a debt claimed in a statutory demand where the debt arises from a poorly drafted deed.

Key Takeaways

  • In cases involving a dispute about the construction of a particular document, the Court is neither required nor expected to avoid all issues of construction on an application to set aside a statutory demand. However, the Court should exercise caution before expressing views about the merits of the dispute.
  • Drafters of guarantees in contracts or deeds should be careful to ensure that the obligations of the party providing the guarantee are clear and unambiguous, so any statutory demand issued in relation to the guaranteed amount is not liable to be set aside as ambiguous.

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