Corporations Act 2001

CHAPTER 5 - EXTERNAL ADMINISTRATION  

PART 5.4 - WINDING UP IN INSOLVENCY  

Note: This Part applies to a sub-fund of a CCIV in a modified form: see Division 5 of Part 8B.6 .

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)   [ Paramountcy]  

This section has effect subject to section 459J.