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  • Writer's pictureEvan Sarinas

The Strategic Success of Statutory Demands

Updated: 4 days ago

Issuing a Statutory Demands can be an extremely effective mechanism for debt recovery in cases where a debtor corporation who is refusing or unable to pay its bills.

Table of Contents

  1. What is insolvency?

  2. Statutory Demands

  3. All Roads Pty Ltd Wound Up in Insolvency

  4. Conclusion

 What is insolvency?

A company is considered insolvent when it is unable to pay its debts as and when they fall due.


Creditors can make a formal request for payment of a debt owed under section 459E of the Corporations Act 2001 (Cth), when the debt is:

  • more than $4,000;

  • owed by a corporation;

  • the debt is due and payable; and

  • there is no genuine dispute about the debt.

Statutory Demands

Statutory Demands have serious consequences.

If the company debtor fails or refuses to pay the debt within the 21 day statutory timeframe or is unsuccessful in having the statutory demand set aside, then the debtor company is presumed to be insolvent, and the creditor can commence proceedings in the court to have the debtor company wound-up in insolvency.

All Roads Pty Ltd Wound Up in Insolvency

Just last week, the Supreme Court of Queensland in Brisbane ordered Queensland construction firm, All Roads Pty Ltd, to be wound up in liquidation, appointing liquidators in response to a winding-up application from a pipe supplier over an unpaid debt.

The collapse of All Roads leaves a long line of creditors – including its own staff - and several large scale construction and engineering projects worth more than $177 million plunged into doubt, as liquidators begin the long road of paying creditors and winding up the company. reports:

“There have been worrying signs these guys were not in a good place for a long time with multiple subcontractors and suppliers walking off sites due to unpaid bills,” one person familiar with the matter told

According to them, the administrators’ investigations identified that in all, there are 721 creditors owed $24.5 million. Of that, 145 staff are owed $3.9m in wages, super and entitlements. They said many of these creditors were small businesses “who will feel the pinch if not break” from these massive losses.”

There are specific compliance requirements for Statutory Demands, and it’s crucial to have an experienced lawyer prepare the documentation to maximize its effectiveness and minimize any technical disputes should the matter proceed to a winding-up application in the courts.


Statutory Demands can be an extremely powerful tool for debt recovery for small businesses, especially in this uncertain economic climate.

Choosing the right business lawyer in Townsville is an important decision that can impact the outcome of your case and the success of your debt recovery measures.


If you need advice or assistance with your debt recovery options, contact us today to find out how we can assist you and help your business to flourish and grow.


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