Application to set aside a statutory demand dismissed by the court without a hearing

A debtor appealed against a district judge’s decision to dismiss his application to set aside a statutory demand without a hearing. The debtor applied to set aside the statutory demand pursuant to rule 10.5(5)(a) of the 2016 Insolvency Rules on the basis he had a cross-demand against the creditor which was being pursued in separate legal proceedings.

However, those proceedings had been struck out by the court prior to the debtor’s application to set aside.

The district judge dismissed the debtor’s set-aside application without a hearing on the basis the debtor could not evidence a cross-demand which gave rise to a ‘genuinely triable issue’ which equalled or exceeded the amount of the debt specified in the statutory demand.

The issues on appeal were whether the district judge had considered the debtor’s cross-demand and if so, whether the judge had given adequate reasons in support of the decision to dismiss the set-aside application. The debtor submitted, among other reasons, that the judge’s reasons for dismissal were only two lines long and it was unfair that, as a litigant in person, the debtor’s application was dismissed without a hearing.

The appeal was dismissed. It was held that the judge was able to deal with the debtor’s application without a hearing and that the judge had taken the alleged cross-demand into account and his reasons were adequate. The key question was whether the debtor’s cross-demand gave rise to a ‘genuinely triable issue’ and it did not. There were therefore no grounds for setting aside the statutory demand.

Popely v Popely [2023] 1 WLUK 362

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