Corporate Aviation v Ayes

In the matter of Corporate Aviation and Ayes, the applicant sought to have a statutory demand set aside under section 459G of the Corporations Act. The statutory demand, issued by Ayes, was in relation to a debt owed by Corporate Aviation. The Federal Circuit and Family Court was tasked with determining whether the statutory demand should be set aside.

The primary legal issue before the court was whether the statutory demand was a "harsh and unjust" measure under section 459G. The court needed to consider the principles that guide the interpretation of this section, including the balance between the creditor's right to pursue a debt and the debtor's right to challenge the demand if it is considered unjust. The court also had to consider the factors outlined in section 459G(2) to determine if the demand was indeed harsh and unjust.

In delivering the decision, the court considered the nature of the debt and the surrounding circumstances. The court noted that while the debt was not trivial, the demand was considered harsh and unjust due to the specific circumstances of the case. The court emphasised that the principles guiding the interpretation of section 459G require a careful balancing of the creditor's and debtor's rights. The court found that the demand was not in line with these principles and ordered the statutory demand to be varied to reflect a more reasonable payment arrangement.

The court ordered that the statutory demand be varied to allow for a payment schedule that was more manageable for Corporate Aviation. This decision underscores the importance of the principles that guide the interpretation of section 459G, highlighting the need for courts to balance the rights of both creditors and debtors when determining the fairness of a statutory demand.