Piast Enterprises Pty Ltd (ACN 101 634 197) v Toorallie Holdings Pty Ltd (ACN 115 285 197)

Piast Enterprises Pty Ltd (ACN 101 634 197) applied to the Supreme Court of the Australian Capital Territory to set aside a statutory demand issued by Toorallie Holdings Pty Ltd (ACN 115 285 197). The defendant, Toorallie Holdings Pty Ltd, had issued a statutory demand to the plaintiff, Piast Enterprises Pty Ltd, claiming $7,177.50 for commission. The demand was served on 8 August 2010, but the plaintiff only became aware of it on 26 August 2010. The plaintiff's application to set aside the demand was filed on 31 August 2010, which was outside the 21-day statutory period required for such applications.

The legal issues in this case revolved around the procedural requirements for setting aside a statutory demand and whether the court could set aside a demand outside the statutory period if there were other compelling reasons to do so. The court had to determine if the lack of notice of the demand constituted a "some other reason" for setting it aside, as per section 459J(1)(b) of the Corporations Act 2001 (Commonwealth).

The court examined the reasoning in previous cases where statutory demands were set aside despite being served within the statutory period but not coming to the attention of the company. The court noted that Palmer J in Joe Mangraviti Pty Limited v Lumley Finance Limited [2010] NSWSC 61 (unreported, 5 February 2010) had set aside a demand for "some other reason" when the demand had been validly served but the company had not been made aware of it within the statutory period. This reasoning was further elaborated in Woodgate v Garard Pty Limited [2010] NSWSC 508 (unreported, 24 May 2010). Following these cases, the court found that it had the discretion to set aside the demand under section 459J(1)(b) of the Act, even though the application was made outside the 21-day period, due to the defendant's intentional failure to inform the plaintiff of the demand.

The court also noted that the defendant, who was not a lawyer or a director, appeared in court without proper authorisation, which was not acceptable. The court further observed that the demand was potentially being used as a debt-collection mechanism, which it is not intended for, and highlighted the importance of using the proper litigation process for disputed debts.

In conclusion, the court set aside the statutory demand and ordered the defendant to pay the plaintiff's costs.