Commercial Litigation & Insolvency News Alert: Back where we started...Update on Kisimul Holdings Pty Ltd v Clear Positions Pty Ltd
In our News Alert on 8 April 2014 "A statutory demand is not defective despite the absence of a "no genuine dispute" statement", we reported on the decision of Justice Stevenson of the NSW Supreme Court in Kisimul Holdings Pty Limited. His Honour decided, contrary to a long line of authorities, that an affidavit omitting the ‘no genuine dispute’ statement did not invalidate a statutory demand.
The decision was appealed and on 11 August 2014, the New South Wales Court of Appeal upheld the appeal.
In upholding the appeal, the Court of Appeal found that Justice Stevenson was in error when he regarded the absence of the relevant ‘no genuine dispute’ statement as somehow offset or compensated for by particular factual matters. The Court of Appeal said that those factual matters had nothing to do with preserving the salutary measure that the statement of absence of genuine dispute provided, namely assurance that the objectives of the Corporations Act were being observed by the creditor when seeking to wind up a company relying on the presumption of insolvency that arises though non-compliance with a statutory demand.
Kirsten Farmer, Partner