No 96 Factory Bargains Pty Ltd v Kershel Pty Ltd

The Federal Circuit Court of Australia was called upon to decide an application by No 96 Factory Bargains Pty Ltd to set aside a statutory demand issued by Kershel Pty Ltd. The application was based on the contention that there existed a genuine dispute regarding the debt claimed, as well as an offsetting claim for misleading or deceptive conduct under the Australian Consumer Law.

The court was tasked with determining whether No 96 Factory Bargains had demonstrated a genuine dispute over the debt claimed by Kershel, and if so, whether this dispute was sufficient to warrant setting aside the statutory demand. Additionally, the court had to assess the validity of No 96 Factory Bargains' offsetting claim for misleading or deceptive conduct, and whether this claim could serve as a basis for setting aside the statutory demand. The court was required to balance the statutory presumption of insolvency against the principles of equity and natural justice in reaching its decision.

The court found that No 96 Factory Bargains had not provided sufficient evidence to demonstrate a genuine dispute over the debt claimed. The court also held that the offsetting claim for misleading or deceptive conduct did not meet the threshold for setting aside the statutory demand, as it was not demonstrated to be a substantial counter-claim that could outweigh the statutory presumption of insolvency. Consequently, the application to set aside the statutory demand was dismissed.

No 96 Factory Bargains was ordered to pay Kershel's costs of the application.