We have been helping a client chase a $242k debt, half of which is not actually in dispute, but our client’s client is basically trying to extort a settlement for a lesser sum by withholding the whole amount.
We issued a creditors statutory demand about 4½ weeks ago for the undisputed portion.
If the debtors fails to apply to set aside the default judgment within 21 days of service, the company is deemed to be insolvent, which can have very adverse effects, such as putting it in default in relation to loan facilities.
The company’s solicitor wrote to us last Wednesday:
- to advise that $9k had been paid;
- offered to pay the balance amount not in dispute, in full and final settlement of the claim;
- requested that the creditors’ statutory demand be withdrawn; and
- required a response within 24 hours.
I queried the short time frame and was told it was to avoid the need to make an application to set aside the creditor statutory demand.
I called the solicitor to advise that the 21 day period had already expired, her client was already deemed to be insolvent and the offer was rather disingenuous.
The amount not in dispute was paid on the Friday, to avoid our winding up application.
We are now chasing the balance and expect to file a District Court writ.
For help with contract disputes, see Michael Paterson & Associates.