Quill v Custom

The case of Quill v Custom involved an application by the respondent, Custom, to set aside a statutory demand issued by the applicant, Quill. The demand was issued under section 459E of the Corporations Act 2001, asserting that Custom owed Quill a debt of $11,666.95. Custom contested the demand, arguing it was invalid due to procedural errors and that the debt was not a genuine debt. The matter was heard in the Federal Circuit Court of Australia.

The court was required to determine whether there were any procedural errors in the issuance of the statutory demand that rendered it invalid. Additionally, the court needed to assess whether the debt claimed was genuine and whether the demand was issued in bad faith. The court also needed to consider whether there were any other circumstances that justified setting aside the demand under section 459H of the Corporations Act.

In delivering the judgment, the court held that the statutory demand was invalid due to procedural errors in its service, specifically, the failure to provide Custom with a copy of the demand and a notice of intention to apply for an order for payment within 21 days. The court found that these errors were not trivial and significantly affected the fairness of the process. Furthermore, the court determined that the debt was not genuine as Custom had a valid counterclaim that offset the amount claimed by Quill. The court also found that the demand was issued in bad faith, as it was clear that Quill was aware of Custom's counterclaim at the time of issuing the demand. Consequently, the court set aside the statutory demand.

The court ordered that the statutory demand issued by Quill be set aside. The court further ordered that Custom pay Quill's costs of the application, to be paid within 14 days.