THE CORPORATIONS LAW

CHAPTER 5 - EXTERNAL ADMINISTRATION

PART 5.4 - WINDING UP IN INSOLVENCY

Division 3 - Application to set aside statutory demand

SECTION 459H   DETERMINATION OF APPLICATION WHERE THERE IS A DISPUTE OR OFFSETTING CLAIM  

459H(1)  [Court satisfied of dispute or offsetting claim]  

This section applies where, on an application under section 459G, the Court is satisfied of either or both of the following:

(a)  that there is a genuine dispute between the company and the respondent about the existence or amount of a debt to which the demand relates;

(b)  that the company has an offsetting claim.

459H(2)  [Calculation of substantiated amount]  

The Court must calculate the substantiated amount of the demand in accordance with the formula:

                  Admitted total - Offsetting total
          

where:

``Admitted total'' means:

(a)  the admitted amount of the debt; or

(b)  the total of the respective admitted amounts of the debts;

as the case requires, to which the demand relates;

``Offsetting total'' means:

(a)  if the Court is satisfied that the company has only one offsetting claim - the amount of that claim; or

(b)  if the Court is satisfied that the company has 2 or more offsetting claims - the total of the amounts of those claims; or

(c)  otherwise - a nil amount.

459H(3)  [Substantiated amount less than statutory minimum]  

If the substantiated amount is less than the statutory minimum, the Court must, by order, set aside the demand.

459H(4)  [Substantiated amount equal to or greater than statutory minimum]  

If the substantiated amount is at least as great as the statutory minimum, the Court may make an order:

(a)  varying the demand as specified in the order; and

(b)  declaring the demand to have had effect, as so varied, as from when the demand was served on the company.

459H(5)  [Definitions]  

In this section:

``admitted amount'' , in relation to a debt, means:

(a)  if the Court is satisfied that there is a genuine dispute between the company and the respondent about the existence of the debt - a nil amount; or

(b)  if the Court is satisfied that there is a genuine dispute between the company and the respondent about the amount of the debt - so much of that amount as the Court is satisfied is not the subject of such a dispute; or

(c)  otherwise - the amount of the debt;

``offsetting claim'' means a genuine claim that the company has against the respondent by way of counterclaim, set-off or cross-demand (even if it does not arise out of the same transaction or circumstances as a debt to which the demand relates);

``respondent'' means the person who served the demand on the company.

459H(6)  [Sec 459J]  

This section has effect subject to section 459J.