A Company owes me $30,000 for goods it purchased from me. What can I do?

If the Company does not respond to a letter of demand, the next step can often be to serve a Creditor's Statutory Demand.

A Statutory Demand requires the Company to satisfy its debt to you within 21 days of service. If the Company fails to do so, or fails to apply to set aside the Statutory Demand within the 21-day period, then you are entitled to apply to the Supreme Court for the Company to be wound up. For this reason, in our experience, a Statutory Demand can be a highly effective way of encouraging the Company to pay because most companies do not want to have a liquidator appointed. However, a Statutory Demand may not be used to recover a debt when the debt is genuinely disputed by the debtor.

Further, there are very specific rules and requirements in relation to the format and content of a Statutory Demand. Should a Statutory Demand ultimately be set aside, you may be ordered to pay the debtor's Court costs, as well as being responsible for paying your own legal costs. Accordingly, it is important to ensure that the process is handled correctly.

For more information surrounding the process of serving a Statutory Demand, or for winding up proceedings based on an unsatisfied Statutory Demand, please see the Federal Court of Australia's website.

How can Sharrock Pitman Legal assist?

If you feel that serving a Statutory Demand could assist you and your business or if you require any additional information surrounding this process please feel free to get in touch. Our Accredited Commercial Litigation Specialist, Simon Matters can be contacted on 1300 205 506 for advice, or alternatively fill in the form below.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by one of our lawyers

Simon Matters

For further information contact

Simon Matters

Simon is a Senior Associate of Sharrock Pitman Legal.

He is an Accredited Commercial Litigation Specialist (accredited by the Law Institute of Victoria) and deals with Litigation, Mediation of Disputes, and Law for Charities & Not for Profits. For further information, contact Simon Matters on his direct line (03) 8561 3324.

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A Company owes me $30,000 for goods it purchased from me. What can I do?

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be placed on the Supreme Court website for at least 14 days prior to any application.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself does not take long to process the application (maybe another 1 to 2 weeks) and this is done 'on the papers'. This means you do not have to go to a court hearing. There is also a general discretion for the Court to issue a 'Requisition' asking that you provide more information before they process the application and this can delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

Statutory Demand

A Company owes me $30,000 for goods it purchased from me. What can I do?