In the matter of Veysel's International Import & Export Pty Ltd

Veysel's International Import & Export Pty Ltd was the subject of a statutory demand issued by another company, claiming a debt of approximately $1.4 million. The debtor company applied to set aside the statutory demand, contending that there was a genuine dispute about the existence or amount of the debt, due to an alleged invalid assignment of the debt. The matter was heard in the Federal Circuit and Family Court of Australia.

The court was required to determine whether there existed a genuine dispute as to the existence or amount of the debt claimed, as well as whether the applicant had a real element of compromise in its offer to settle. The debtor argued that there was no valid assignment of the debt, and therefore, the statutory demand was invalid. The creditor, however, maintained that the assignment was valid and that the statutory demand was legitimate.

The court found that there was indeed a genuine dispute about the existence and amount of the debt due to the invalid assignment. Additionally, the court held that the creditor had acted unreasonably in maintaining the validity of the statutory demand despite the debtor's offer to settle the matter. As a result, the court ordered the creditor to pay the debtor's costs on an indemnity basis, which is a higher standard of costs awarded in exceptional circumstances. This decision was based on the creditor's unreasonable conduct in pursuing the statutory demand despite a genuine offer to compromise the matter.

The court set aside the statutory demand and ordered the creditor to pay the debtor's costs on the indemnity basis. The court further noted that the offer to settle made by the debtor constituted a real element of compromise, as defined in the relevant legislation. This case highlights the importance of valid assignments of debts and the consequences of unreasonable conduct in pursuing statutory demands.