15 Oct Applications to Set Aside Statutory Demands
The application should be in Form 6.04. No fee is payable provided the application is made on time, see below. The written evidence in support should exhibit the demand, state the date on which it came into the applicant’s hands and state the grounds on which it should be set aside (see Rule 6.005).
The application must be made within 18 days after service of the demand or (if the court is not open on the 18th day) on the next day on which the court is open. If made later an application for extension of time should be included in the application to set aside the demand, and the written evidence in support should include evidence in support of the extension. If an extension of time is applied for a fee is payable.
If the debt is a judgement debt the court will not normally go behind the judgment and will therefore not set aside the demand unless the applicant can demonstrate that he has a claim against the creditor who has made the demand which equals or exceeds the amount in the demand (Rule 6.005(4)(a)). Ground (4) in side-note (c) to Rule 6.005 should not be relied on: it is not a proper ground for setting aside a demand.
If the Master is of the opinion that the written evidence in support shows no sufficient cause the application will normally be dismissed summarily under Rule 6.005(1) without a hearing.
If that is not done the first hearing will normally be used to give directions for the parties to file and serve written evidence. If the application is disputed it will normally be adjourned for a full hearing at a later date when all the evidence has been completed and any other directions given have been complied with. Generally, the court will not fix a hearing date for final determination of the application unless the parties have filed a certificate confirming that the directions have been complied with and estimating the length of the hearing.
If the application is on the ground that the debt is disputed on substantial grounds the court will set aside the demand if it appears that there is a triable issue. If the evidence in support shows a prima facie issue the burden will be on the respondent creditor to satisfy the court that there is no triable issue.
If the application is on the ground that the debt is secured the security must be shown to belong to the debtor (not, for example, to a company for which the debtor is surety). If it is on the ground that the value of the security equals or exceeds the amount of the debt, the burden to prove that will be on the debtor and will require proper expert valuation evidence, and cross-examination, if appropriate.