McInnes & Anor v Caddy

In *McInnes & Anor v Caddy*, the High Court of Australia considered a dispute concerning the validity of a notice of demand issued under s 459E of the *Corporations Act 2001* (Cth). The appellants, McInnes and another, sought to set aside a statutory demand served on them by the respondent, Caddy.

The primary legal issue before the Court was whether a statutory demand could be based on a debt that was subject to a genuine dispute. The Court also had to consider the proper approach to applications to set aside statutory demands where allegations of a genuine dispute were raised.

The Court reasoned that s 459H of the *Corporations Act* provides a mechanism for setting aside a statutory demand where there is a "genuine dispute" about the existence or amount of the debt. A genuine dispute, the Court explained, is one that is real and not spurious, hypothetical, or fanciful. It requires a substantial question of fact or law to be raised. The Court emphasised that it was not its role to determine the merits of the disputed debt, but rather to assess whether a genuine dispute existed. The Court found that the appellants had raised a genuine dispute regarding the debt, and therefore the statutory demand was invalid.

The High Court allowed the appeal, set aside the statutory demand, and ordered that the respondent pay the appellants' costs.