W & P Reedy Pty Ltd v Macadams Baking Systems (Pty) Ltd

The appeal concerned a challenge to a statutory demand issued by Macadams Baking Systems (Pty) Ltd to W & P Reedy Pty Ltd. W & P Reedy sought to set aside the demand on the basis of an alleged offsetting claim, as permitted by section 459H of the *Corporations Act 2001* (Cth).

The primary legal issue before the Court of Appeal was whether the alleged offsetting claim had sufficient prospects of success to warrant setting aside the statutory demand. This involved a review of the trial judge's findings regarding the substance of W & P Reedy's claim against Macadams Baking Systems.

The Court of Appeal affirmed the trial judge's conclusion that W & P Reedy's offsetting claim lacked sufficient merit. The judges observed that the summary process intended by the statutory demand regime would be undermined if appeals were permitted to proceed without a genuine prospect of success. Consequently, leave to appeal was granted, but the appeal itself was dismissed with costs.