In the matter of Force Draft Pty Limited

Force Draft Pty Limited applied to set aside a statutory demand served by its creditor, a contractor, for the sum of $150,000. The contractor argued that the sum was owing for a series of invoices issued to Force Draft for warranty repairs. Force Draft maintained that the invoices were not due and payable, as they were subject to a genuine dispute concerning the terms of their contract. The central issue before the court was whether there was a genuine dispute that justified setting aside the statutory demand.

The court examined the evidence regarding the terms of the contract and the invoices in question. It considered whether the manufacturer had a genuine dispute as to the liability claimed by the contractor. The court noted that some invoices had been paid off by credit notes and others were not due and payable at the date of the demand. Additionally, the substantiated amount owed was less than the statutory minimum required for a statutory demand. The court found that the manufacturer's rejection of certain invoices and its dispute over the contract terms constituted a genuine dispute.

Based on its findings, the court concluded that the statutory demand should be set aside as the manufacturer had a genuine dispute as to the liability claimed. The court highlighted the importance of considering the terms of the underlying contract and the existence of any genuine dispute when assessing an application to set aside a statutory demand. The court's decision underscored the need for creditors to ensure that their claims are substantiated and undisputed before serving a statutory demand.

The court ordered that the statutory demand be set aside and that the creditor pay the manufacturer's costs of the application. This decision serves as a reminder to creditors to carefully assess the validity of their claims before proceeding with statutory demands, especially when there are underlying disputes about the terms of the contract.