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Welcome to The OMB Law Board, the podcast where legal insights meet practical advice. Hosted by Simon Bennett, Managing Partner at OMB Solicitors, this show delves into what you can expect when engaging with OMB Solicitors. Specialising in property law and commercial law, OMB also boasts dedicated teams for estate planning, contested estates, body corporate matters, litigation, and family law.
Each episode features in-depth discussions led by experienced team leaders, some with over 20 years of expertise. You'll gain valuable knowledge on initial consultations, cost assessments, timelines, and the importance of clear communication and confidentiality in legal matters.
Join us to break down barriers and navigate your legal journey with confidence. Tune in for expert advice, client stories, and tips on how to prepare for your legal needs. The OMB Law Board is your trusted source for all things legal.
00:00:05:18 - 00:00:29:02
Unknown
Hi there, I'm Simon Bennett, and welcome back to the OMB Law Board. Today I've got Cameron Marshall for his first appearance on the podcast, and he's our litigation partner. Welcome, Cameron, for the very first time. Thanks, Simon. Look. Glad to be here. Looking forward to your new media career. Yeah, we'll see how it goes. Okay, so I got this document in the mail.
00:00:29:04 - 00:00:41:18
Unknown
It looks like junk mail. It's called a statutory demand. Can I just throw that in the bin? Oh, no. You can't. That's something. We get a lot here. Creditors statue demand. Is that what you've probably got?
00:00:41:20 - 00:00:45:22
Unknown
looks like. And it says it's statutory demand. I just want to throw it in the video so I don't know anyone.
00:00:45:22 - 00:01:02:02
Unknown
Any money? Yeah. What they generally are is if a company owes allegedly, I should say owes money then. One of the ways that the creditor can enforce is by issuing what they call a creditor statue demand, which is what you've got. Okay. So
00:01:02:07 - 00:01:09:07
Unknown
let's dive into that. But before we do, I just want to mention I've got a subscribers question.
00:01:09:11 - 00:01:25:00
Unknown
It's a bit of a funny one. So if you stick around to the end cam I'm going to ask you that question. So I'll throw that to you at the end. But I can't wait. But look, this is a topic that everyone is talking about. And I just want to know more about these statutory demands. So let's start with that cam.
00:01:25:01 - 00:01:42:20
Unknown
Tell us all about a statutory demand. Okay. So like I said just before, if a creditor needs to be paid or wants to be paid from a company, it will often issue what they call a creditors statue, demand. What it is is a demand to the company to be paid a debt.
00:01:42:20 - 00:01:43:21
Unknown
It'll have
00:01:43:21 - 00:01:45:00
Unknown
a whole lot of riding on it.
00:01:45:01 - 00:02:04:14
Unknown
It'll have an amount on the back that it says it's owed, and you have to do something within 21 days. What happens if I don't? Oh, you're not in a good place. I get I get a lot of these where people just go, it's just rubbish. I'll throw it in the bin. Never heard of it. Yeah. The other one is they never know about it because their registered address is their accountant or something.
00:02:04:15 - 00:02:22:23
Unknown
So they don't have to get served personally. These companies can be served at their registered address, not the principal place of business. So if you've opened up a company with an accountant and haven't spoken to that accountant for five years, if it's still current or it has to be done to serve, it is serve it to that address by post so it can turn up at my registered address.
00:02:22:23 - 00:02:41:08
Unknown
I don't even know about this document. Or I could throw it in the bin and I don't do anything for 21 days. What are the risks? The next step is that's deemed to be an insolvency event, and the creditor can move to wind up your company, and you have got very little to be able to do to stop it.
00:02:41:13 - 00:03:03:10
Unknown
So that's pretty substantial. The horse is bolted by then, so they're lethal. Okay. So they're not hard to deal with if you act quickly. But if you don't do anything big problems. Well let's talk about what we should do then. So we've got this document either in the mail or we've picked it up from our registered office, maybe our accountant or something, or like we don't agree with it.
00:03:03:11 - 00:03:23:09
Unknown
We don't think we owe the money. What should we do? Well, Captain Obvious, you might want to read it. So you read it through, see who's it from? How much are they reckon you owe? And then have a little thing, do I actually. Oh, it. If this will sound counterintuitive from a lawyer, but if you actually owe it, probably the best thing is just pay it.
00:03:23:15 - 00:03:39:23
Unknown
It'll make it go away. Yep. And that's the end of it, right? Because things can happen then if you think you don't know it, that's where you can start thinking about what to do. Okay, so I don't know this money. Yep. How to. And I come to you to sort it out for me. What can you do to help me?
00:03:39:24 - 00:04:05:17
Unknown
Okay. What's the process? First thing, you've got 21 days to do something. Okay. Something doesn't mean writing an aggressive email to the creditor about why you shouldn't pay it. What it means is you have to take an active step by applying to a court within 21 days. If you deal with it early, lawyers generally will have a set process where you can probably cut it off at the pass if you've got a reasonable defense.
00:04:05:19 - 00:04:25:14
Unknown
What they will do, or what I would do, is the first thing is get the instructions. Work out whether your reasons for not pay maintainable right to the creditor, advising them of these issues. That puts them on notice that there's a dispute, and that I'll get to that in a minute, and that might be able to be enough for them to withdraw the claim.
00:04:25:14 - 00:04:43:11
Unknown
And then you can either negotiate, they can drop or withdraw the claim, and they can solve it without going to court if you act quick. If you leave it to the last minute times, not your friend. Okay, so we've acted quickly. We've come to see you. You've tried to make it go away and it won't. What's next?
00:04:43:15 - 00:04:48:24
Unknown
last resort, I'll then have to make application to the court to set aside the creditor statute of mine.
00:04:49:00 - 00:05:08:24
Unknown
What I have to do to show is to do that is to show that you have a reasonable argument that the debt is not payable. I don't have to prove that the debts not payable. I have to show the court that there's a reasonable tribal issue to be heard by a court under full evidence that this debt is not payable.
00:05:09:00 - 00:05:26:15
Unknown
Okay. So there's a genuine dispute, and I need to show the court there is an absolute genuine dispute as to whether this debt is actually a debt or it's not. Yeah. That's right. And what sort of material or what sort of process would I need to go through with you? Do I have to prepare documents or. Well, I would form that, but I'd get you in.
00:05:26:15 - 00:05:51:24
Unknown
I'd be discussing the matter. I'd need your documents. Right. I don't need to proof prove it to the level that I would at trial. But I need to establish that there's substance to the reason why we're not paying. I'd get an affidavit, most likely from whoever the director of the company is. We would file that in the court, and then we would have a court hearing before a judge to determine whether or not the creditors statutory demand should stand or not.
00:05:52:00 - 00:06:12:23
Unknown
Now, the bar is not high to set them aside when I'm issuing them. I'm very careful about what type of claim I will issue them on because of that. Because if you if you're the creditor now and you go down, you'll be paying the debt as cost to set it aside. So if I serve the statutory demand and I lose, they set aside, I'm going to pay their costs.
00:06:12:24 - 00:06:34:23
Unknown
Most likely yes. Wow. Okay. So that can be it's a double edged sword. So it's best used where the debt is not arguably there's no defense to it. Basically like a bank with a credit card or something. So I think most of our listeners are fairly well educated down this path. But you talked about preparing an affidavit like, do I have to appear as a witness?
00:06:34:23 - 00:06:59:13
Unknown
Do I have to? Am I getting cross-examined? I see a lot of this on TV. I just don't know what happens up there. Yeah, well, you have to be prepared to be cross-examined. Usually. I've done quite a few of these things. Usually the swear of the affidavit isn't cross-examined, but they can be called to be available if the other side or the creditor is doubting the bona fides of what may have been said, they are able to seek that.
00:06:59:13 - 00:07:19:00
Unknown
But if you're going to that level of cross-examination, one of it'll act against the creditor, because then we're looking into we have to true, sorry, test the veracity of the evidence. We also it will give an issue to be tried. So that would give some credence to showing that there is a defense or possibly a possibly a genuine dispute about it.
00:07:19:00 - 00:07:26:20
Unknown
But you could be called as a as a witness to give evidence under cross-examination. Okay. What else do I need to know about the process?
00:07:26:23 - 00:07:37:19
Unknown
Act quick and get your documents in order and do something. Don't do nothing. The other thing is, make sure I said it before your company's registered address is up to date.
00:07:37:20 - 00:07:56:17
Unknown
Yeah, it's the one that kills most people because they have forgotten to update it. And that's no excuse. You're saying that you've changed. Accountants won't cut it. So that's not a defense. I never got it. I never received it. My company is now insolvent. Of course, the creditor has to prove that they served the registered address on the ASIC ASIC record.
00:07:56:17 - 00:08:16:02
Unknown
But if it's no longer the right one and you have an updated it, that's on you. Okay. So look, as I said this is a hot topic. It's discussed a lot. It goes around a fair bit because it is an absolute guillotine on that 21 days. If you don't act you're going to have problems. Seek legal advice early.
00:08:16:05 - 00:08:43:19
Unknown
Take action to either negotiate a way out of it or to have it set aside if you have a genuine dispute. Now, cam, let's get to this question because, you know, it's a bit of a funny one. And I, you know, being a property lawyer, I kind of find this a little bit humorous because anyhow, the question was to the OMB litigation team, do you have to be a tough, hard nut and nasty person to be a litigator?
00:08:43:20 - 00:09:02:17
Unknown
Well, I'd like to think I'm not a nasty person. And the answer to that is, I think, no, you've got to have grit. You've got to have grit, right? You've got to be able to handle the ups and downs and see it through. But I don't believe you have to be like the mean fellow or lady that just never takes a backward step or anything like that.
00:09:02:18 - 00:09:25:13
Unknown
The hardest opponents I have faced are the ones that are reasonable. They know their law, and they don't need to take a backward step because they don't put them in situations where they need to, because they're so sure of where they're going. They're calculated, they get their evidence is everything. They get their evidence together, and they know where they're going from the start.
00:09:25:13 - 00:09:42:15
Unknown
And they can be as nice as pie, and you can't do anything about it if you don't have the goods to take them on. So just to follow up from me, sometimes clients want the most aggressive letter writing lawyer who writes nasty things because it makes them feel better. That's not always in your best interest. Oh no. No.
00:09:42:16 - 00:10:08:03
Unknown
Well, in my humble opinion, no. In respect to the letter writing, I always write something as if a judge would read it, or if it was on the front page of the Courier Mail or something like that. I like to be reasonable. I'd like to take any argument about emotion out of it. That is what I think looks bad before a court, because the court's looking at it for, I don't know, 2 to 3 days, maybe a week.
00:10:08:04 - 00:10:26:03
Unknown
They don't have the background and they're just looking at it black and white. I would like to think they do. Once they see the emotion come in, I think it looks bad for the for the solicitor and for the client. Same with mediations we go to all the time. You'll have people jumping up and down and yelling. It really takes me know.
00:10:26:03 - 00:10:50:04
Unknown
We're always find. It's easy to say no to someone who's being stupid and mean and loud, rather than someone that's being reasonable and friendly. That's how I seem to take it. And my experience from what I've seen. So there you have it. Litigation lawyers are generally nice guys. Yeah, yeah, I'd say that 100%. Well, Ken, thanks so much for being with us today.
00:10:50:05 - 00:10:56:04
Unknown
It's been heaps of fun. We've learned all about statutory demands, and we look forward to seeing you back on the OMB Law Board.
00:10:56:04 - 00:10:56:24
Unknown
Thanks, Simon.
00:10:56:24 - 00:11:04:13
Unknown
And for all our listeners, thank you so much for sticking around to the end. Stay tuned for the next episode of the and Be Loyal board.