Kisimul Holdings Pty Ltd v Clear Position Pty Ltd

Kisimul Holdings Pty Ltd (the applicant) sought to set aside a statutory demand issued by Clear Position Pty Ltd (the respondent). The dispute concerned the validity of the statutory demand, which the applicant argued should be set aside on the grounds that the accompanying affidavit lacked a statement of the deponent's belief as to the absence of a genuine dispute about the existence or amount of the debt. The matter came before the Court of Appeal of New South Wales, constituted by Beazley P, Barrett and Gleeson JJA.

The primary legal issue before the Court was whether the deficiency in the affidavit, specifically the absence of the deponent's belief regarding the absence of a genuine dispute, constituted "some other reason" within the meaning of section 459J(1)(b) of the Corporations Act 2001 (Cth) that would justify setting aside the statutory demand. This required the Court to consider the purpose and requirements of the affidavit accompanying a statutory demand and the scope of the court's discretion under section 459J(1)(b).

The Court of Appeal allowed the appeals, setting aside the orders of the Equity Division and the statutory demands themselves. The Court reasoned that the affidavit accompanying a statutory demand must comply with the requirements of the Corporations Regulations 2001 (Cth), including Regulation 4.04(1)(b) which mandates that the affidavit state the deponent's belief that there is no genuine dispute about the existence or amount of the debt. The Court held that a failure to include this statement was a significant defect and constituted "some other reason" under section 459J(1)(b) for setting aside the demand, as it undermined the statutory purpose of such demands. The respondent was ordered to pay the applicant's costs of the proceedings.