Meehan v Glazier Holdings Pty Ltd

Meehan (the applicant) sought to set aside a statutory demand issued by Glazier Holdings Pty Ltd (the respondent). The dispute concerned whether the statutory demand, which sought to recover costs awarded to the respondent following a discrete stage of ongoing litigation, should be set aside. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the applicant had established a sufficient basis for setting aside the statutory demand under section 459J(1)(b) of the *Corporations Act 2001* (Cth), notwithstanding the absence of an offsetting claim or a genuine dispute regarding the debt itself. Specifically, the court considered the relevance of a claim by a third party associated with the applicant against the respondent, and whether this, or the nature of the debt as a cost order from prior litigation, provided grounds to upset the trial judge's discretionary decision to set aside the demand. The court also considered the relevance of the statutory demand being stale.

The Court of Appeal found that the trial judge had erred in setting aside the statutory demand. While acknowledging the existence of a third-party claim, the court determined that it did not constitute a genuine dispute or an offsetting claim in relation to the debt owed under the cost order. The court emphasised that the cost order represented a final determination of a discrete issue, and the existence of unrelated litigation or claims by associated entities did not, in itself, provide a basis to avoid the statutory demand. The court also noted that the statutory demand was no longer stale.

Leave to appeal was granted, and the appeal was allowed.