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Considering A Creditor’s Statutory Demand?

Not all is lost – use Creditor's Statutory Demand to make a debtor pay you what they owe

Our detailed guide tells you what you need to know about a Creditor's Statutory Demand.

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In an ideal world, every business transaction goes to plan and no one loses money. In a real world we live in, things do go wrong for good and bad reasons. You end up facing a challenge to recover money owed to you by another business.

You try every tool in the game, load up with patience and good will but nothing helps. What do you do?

One way to recover debt another company owes you is to issue a Creditor's Statutory Demand to the debtor.

What Is a Creditor's Statutory Demand?

A Creditor's Statutory Demand is a letter of demand served by a creditor to a debtor company in an attempt to recover debt owed to a creditor.

What are the Requirements to Serve a Creditor's Statutory Demand?

  1. To serve a Creditor's Statutory Demand, the debt must be larger than $2000.
  2. The debt must ...

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Unfair Contract Terms for Small Businesses: ACCC v JJ Richards

This time last year, the protections against unfair contract terms were extended under the Australian Consumer Law (ACL) to include standard form contracts involving small businesses.

A ‘standard form contract’ is generally a pre-prepared contract which offers the same or similar terms to all consumers, and is often utilised by larger businesses to improve efficiency.

In conjunction with the new laws surrounding standard form contracts, the ACCC has ramped up its efforts to investigate businesses relying upon unfair contract terms. This recently culminated in the commencement of proceedings against JJ Richards & Sons Pty Ltd (JJ Richards), in which the ACCC sought to enforce the extended provisions. In the proceedings, the ACCC alleged that many of JJ Richards’ clauses:

  • created a “significant imbalance” in the rights and obligations of JJ Richards and small businesses;
  • were not reasonably necessary to protect JJ Richards’ legitimate interests; and
  • would, if relied upon, cause significant financial detriment to small businesses.

The Federal Court of Australia recently delivered its judgment[1] and found that, of the eighteen terms contained within JJ Richards’ standard form contracts, the following eight terms were “unfair” and subsequently declared void:

1. Automatic renewal: this clause bound customers to subsequent contracts unless they called the contract within 30 days before the end of the term.

2. Price variation: allowing JJ Richards to unilaterally increase its prices.

3. Agreed Terms: removing any liability for JJ Richards where its performance is “prevented or hindered in any way”.

4. No credit without notification: allowing JJ Richards to charge customers for services not rendered for reasons that are beyond the customer’s control.

5. Exclusivity: granting JJ Richards ...

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Creditor’s Statutory Demand: 21 Days is 21 Days, Christmas or Not

The Supreme Court of Queensland has reaffirmed the law that a debtor only has 21 days to file and serve an application to set aside a creditor's statutory demand, regardless of whether the Christmas/New Year period that falls within the 21 days.

Earlier this month, the Supreme Court handed down its decision1 in an application by J&K Homes Pty Ltd, who had been served with a creditor's statutory demand by the creditor, Evans Lawyers

  • The creditor's statutory demand was served on the debtor on 19 December 2016.
  • Under the Corporations Act 2001 (Cth), the 21 day deadline fell on 9 January 2017.
  • However, the debtor filed its application on 11 January 2017.

In essence, the applicant applied to the Supreme Court to set aside the statutory demand on a number of grounds (genuine dispute, defects, substantial injustice2); however, a threshold question for the Court was that the application was made outside the required 21 day period3, which the creditor argued was fatal.

The debtor argued that the period between Christmas and New Year's Day was not to be included in the 21 days, ensuring the deadline would not have expired until 17 January 2017. In doing so, the debtor referred to rule 1.9(4) of the Queensland Uniform Civil Procedure Rules which states that “in calculating a period of time for the purpose of these rules, the period beginning on 25 December in a year and ending at the end of 1 January in the next year is not to be counted.”

Unfortunately for the debtor, an argument referring to a Queensland Rule had no applicability in regards to the Federal Corporations Act 2001. The Court referred to numerous decisions that made clear that the 21 days says what it means, that is: 21 consecutive days which begin and end at midnight.3

As the debtor did not file and serve its application within the 21 day period (albeit two days late), the Court had no power to make an order setting aside ...

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Commercial Lease Agreements: What You Need to Know

Arm yourself with sound advice before you sign a commercial lease

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If you’re a prospective tenant or landlord entering into a commercial leasing transaction, it’s likely that you will be asked to sign a number of different documents.

It’s important to understand the differences between each document and how they interact with each other. This knowledge will help you make an informed decision before you sign a commercial lease.

Let's look at each document to see what they mean.

Offer to Lease

The first document you're likely to sign is an Offer to Lease.

Offer to Lease is normally prepared by a property agent and sets out key terms that will form the foundation of the Lease Agreement.

These terms usually include the property address and size, current rent and annual increases, proportion of outgoings, security bond, whether there will be personal guarantees and any sort of incentive or special conditions.

Once the parties sign the Offer to Lease, the tenant will usually pay a deposit and the landlord will instruct its solicitors to proceed with preparing the formal Lease Agreement.

Whether the Offer to Lease is binding will depend on its terms. The document may expressly say that it is not binding in which case either party can pull out of the negotiations and the deposit will be refunded.

In some cases the Lease Agreement may be binding and give the landlord the right to keep the deposit if the tenant has a change of mind and perhaps further recourse against the tenant.

The Lease ...

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3 Ways to Effortlessly Reduce Risk

1. Put it in Writing.
We can’t say this enough. Put every deal in writing.

Why is this ‘effortless’? Think of the alternative. If everyone made sure their agreements (and any variations) were clear and in writing, our litigation team would be out of business.

Call us cynical, but handshake deals are a thing of the past. With constant access to technology like smart phones, there’s no reason not to make sure there’s a record of the deal that has been struck.
2. Know Your Vulnerabilities
Rouse Lawyers offers a no-obligation 360o Legal Review. You’ll sit down with a senior member of our team over coffee, and they’ll take you and your business through our exposure detection process to make sure you are on top of everything (or at least aware of where you need to tighten things up!).

Our 360o Legal Review is designed to give you at least one ‘aha moment.’

What we know from experience is that you’ll walk away with added peace of mind.
3. Source Free Resources Online
There are a number of fantastic online resources that often go untapped.
Here are just a few...

For employment: https://www.fairwork.gov.au/ and https://www.fwc.gov.au/
For intellectual property: http://www.ipaustralia.gov.au/
For cases, legislation and articles: www.austlii.edu.au
And of course, our web site: www.rouselawyers.com.au

If you’re interested in our 360o Legal Review, get in touch with us to arrange a date on 07 3648 9900 or via email admin@rouselawyers.com.au. ...

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Credit Card Fee Battle Hits High Court

A High Court challenge starting today in Canberra will determine whether bank customers should be reimbursed hundreds of millions of dollars in credit card late-payment fees.

Thousands of ANZ customers are part of a class action hoping to convince the High Court the fees are illegal.

At the crux of the challenge is the disparity between late fees charged by the bank, and the actual loss suffered when a customer pays a credit card late.

Customers say the late fees they were charged by the bank (up to $35) bear no relationship to the actual cost to the bank, which they say is about 50 cents.

The class action attack on the fees is that they are:

1. penalties at common law or equity; or

2. the result of unconscionable conduct by ANZ within the meaning of the Australian Securities and Investments Commission Act 2001 (Cth) or the Fair Trading Act 1999 (Vic); or

3. unjust under the National Consumer Creditor Protection Act 2009 (Cth); or

4. unfair contract terms.

Initially, the Federal Court ruled in favour of the customers, finding the late payment fees unlawful as they were extravagant, exorbitant and unconscionable. However, that judgment was overturned by a full bench of the Federal Court, which took into account a broader scope of items that could be considered costs to the bank. This has prompted the High Court action.

This case is one of several class actions against the big banks, including CBA, Westpac, NAB, Citibank, St George and Bank West – these cases are now waiting on the outcome of the High Court appeal.

If the High Court appeal succeeds, anyone forced to pay a late fee could benefit from the Court’s decision. ...

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