MD Lawyers Pty Ltd v Stephen Wayne Velik

The Federal Court was asked to consider an application by MD Lawyers Pty Ltd to set aside a statutory demand issued by Stephen Wayne Velik. The demand, which sought payment of $16,000, was made under the Corporations Act 2001 (Cth). Velik opposed the application on the basis that the debt was genuine and the amount claimed was within the statutory minimum. The court was tasked with determining whether the statutory demand was valid and whether there was a genuine dispute over the amount claimed.

The primary issue before the court was whether the statutory demand was invalid due to the amount claimed being less than the statutory minimum, and if so, whether the genuine dispute exception applied. The court noted that the statutory minimum for such demands is $20,000, and while the demand was for less, the genuine dispute exception could still apply if the debtor had a bona fide and reasonable belief that the debt was not payable. The court had to assess whether Velik's opposition was sufficient to demonstrate a genuine dispute.

The court found that the statutory demand was indeed invalid because the amount claimed was below the statutory minimum. However, it also found that Velik had a genuine dispute over the amount claimed. The court was satisfied that Velik had a reasonable belief that the debt was not payable, based on the evidence presented. Consequently, the court granted the application to set aside the statutory demand. The court emphasised that Velik's opposition, while not perfect, was sufficient to demonstrate a genuine dispute, thus justifying the setting aside of the demand.