In the matter of Rio Dorado Limited ACN 148 175 991; Rio Dorado Limited (ACN 148 175 991) v Heather Jane Rutherford

Rio Dorado Limited, represented by its Australian Company Number 148 175 991, has filed an application against Heather Jane Rutherford. The matter pertains to a statutory demand issued by Rio Dorado to Rutherford, seeking payment of a debt. The dispute is being adjudicated in the Federal Circuit Court of Australia. The central legal issues revolve around the validity and enforcement of the statutory demand, particularly focusing on whether the statutory demand was appropriately executed and served as per the requirements set forth by the Corporations Act 2001 (Cth).

The court was tasked with determining whether the statutory demand was legally sufficient, specifically addressing whether it was accompanied by a verifying affidavit as required by section 459E(1) of the Corporations Act. Additionally, the court examined if there was a genuine question to be tried concerning the enforceability of the statutory demand. The court found that the statutory demand was defective as it was served without the requisite verifying affidavit, rendering it invalid. Given this defect, the court was also required to consider if setting aside the demand was appropriate under section 459J(1)(b) of the Corporations Act.

The Federal Circuit Court held that the statutory demand was not validly served as it failed to comply with the statutory requirement for a verifying affidavit. Consequently, the court set aside the statutory demand. The decision emphasised that while the absence of a verifying affidavit was a critical procedural error, it did not warrant setting aside the demand unless it was also demonstrated that there was no genuine question to be tried. The court concluded that the demand could be set aside without further inquiry into the merits of the debt itself, as the primary issue was the procedural non-compliance.

In light of the above findings, the court ordered that the statutory demand issued by Rio Dorado Limited against Heather Jane Rutherford be set aside. This decision underscores the importance of strict compliance with statutory requirements in the enforcement of statutory demands under the Corporations Act.