By Bonnie McMahon a Senior Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group
Whilst a statutory demand may seem like a good debt recovery strategy, it is important for creditors to remember that there can be harsh consequences if they issue a statutory demand, which is later set aside by a court.
The recent Supreme Court decision of Rees J in In the matter of HWC Contracting Pty Ltd [2021] NSWSC 1684 (“HWC Contracting”), is a important reminder for creditors engaging in debt recovery that if a debtor successfully sets aside a statutory demand, it is likely the creditor will be ordered to pay the debtor’s legal costs. A fast simple debt recovery technique can end up become very expensive, and costs may even outweigh the debt recovery amount. [...]
