Albury Local Internet Pty Ltd v Independent Services Providers Pty Ltd

In the Federal Circuit Court, Albury Local Internet Pty Ltd sought to wind up Independent Services Providers Pty Ltd, issuing a statutory demand for $39,797.88. Independent Services Providers applied to set aside the statutory demand, contending that Albury Local Internet had an offsetting claim exceeding the amount of the demand. The dispute revolved around whether Independent Services Providers' counterclaim could be considered in determining if the statutory demand should be set aside. The central legal issue was whether the plaintiff company had a claim against the defendant company that was equal to or greater than the amount specified in the statutory demand. The court needed to decide if the existence of an offsetting claim by Albury Local Internet could be considered in setting aside the demand.

The court found that the statutory demand could only be set aside if the defendant company could demonstrate a Sismondi defence, where there was a cross-claim or counterclaim that equalled or exceeded the amount of the statutory demand. The court held that a company could not be wound up if it had a defence that was equal to or greater than the amount of the debt claimed. Given that Albury Local Internet's claim against Independent Services Providers was equal to or greater than the amount of the statutory demand, the court concluded that Independent Services Providers had demonstrated a Sismondi defence. Therefore, the application to set aside the statutory demand was successful. The court ordered the statutory demand be set aside and that costs be paid by Albury Local Internet.