Received a statutory demand? Consider these three proven grounds to dispute the debt

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:

• a genuine dispute exists in relation to the debt; and/or
• an offsetting claim exists against the party issuing the demand.

These grounds are often raised in conjunction, given the similar nature of establishing each when applying to set aside a statutory demand.