Re JKAM Investments Pty Ltd

In the matter of JKAM Investments Pty Ltd, the respondent applied to set aside a statutory demand served by a creditor under sections 459H and 459J of the Corporations Act 2001 (Cth). The primary issue before the court was whether the statutory demand contained a defect, or if there was another reason to set it aside. The respondent argued that the demand should be set aside as the creditor's affidavit verifying the demand incorrectly stated that no proceedings had been commenced in respect of the debt, and the underlying judgment was allegedly obtained by fraud.

The court considered whether the statutory demand contained a defect and whether the incorrect statement in the affidavit constituted a defect. It was noted that the statutory demand was validly issued, and the affidavit verifying it was properly executed. However, the incorrect statement regarding the absence of proceedings related to the debt raised questions about the credibility of the affidavit. The court also examined if the alleged fraud in obtaining the underlying judgment provided a basis for setting aside the demand. The court had to balance the respondent's right to challenge the demand with the creditor's right to enforce the judgment debt.

The court concluded that the incorrect statement in the affidavit did not constitute a defect in the statutory demand, as the demand itself was validly issued. However, the court found that the respondent had established sufficient grounds for setting aside the demand due to the alleged fraud in obtaining the underlying judgment. The court emphasised that setting aside a statutory demand is an equitable remedy, and the respondent's allegations of fraud warranted relief. Consequently, the court set aside the statutory demand.

The court ordered that the statutory demand issued by the creditor be set aside, and no orders as to costs were made.