Derma Pharmaceuticals P/L v HSBC Bank Australia Ltd No. Scciv-03-1619

In the South Australian Supreme Court, Derma Pharmaceuticals P/L sought an order to set aside a statutory demand issued by HSBC Bank Australia Ltd. The defendant bank claimed that Derma Pharmaceuticals owed a sum of $207,176.71. The plaintiff argued that it had an offsetting claim greater than the amount of the statutory demand, which would justify setting aside the demand under Section 459H of the Corporations Act. The defendant countered that the plaintiff's application was out of time, as it was not filed within the required 21 days of service of the statutory demand. Furthermore, the defendant asserted that the plaintiff had not established the existence of an offsetting claim.

The central legal issue was whether the plaintiff had complied with the procedural requirement of filing the application within 21 days of service of the statutory demand and whether the plaintiff had an offsetting claim sufficient to warrant setting aside the demand. The court examined the date of service of the statutory demand, finding that the demand was placed in a post office box held by Luestner and Associates, the defendant's registered agent, on 14 October 2003. However, the plaintiff's managing director received the demand on 24 October 2003. The court concluded that the statutory demand was not deemed served until it was physically delivered to the plaintiff's registered office. Given that the plaintiff filed the application on 13 November 2003, the court found that the application was out of time, as the 21-day period could not be extended. The court further noted that the plaintiff had not sufficiently demonstrated the existence of an offsetting claim. Consequently, the application to set aside the statutory demand was dismissed.

The court's decision hinged on the procedural compliance of the plaintiff's application and the lack of evidence substantiating an offsetting claim. The court ruled that since the plaintiff did not file the application within the required 21-day period, the application was invalid, and the statutory demand stood.