Insights

In brief - Limitation of time is absolute and courts cannot extend time

With the upcoming raft of public holidays, the case of J & K Homes Pty Ltd v Evans Lawyers [2017] QSC 24 provides a timely reminder regarding the 21 day time limit for complying with a creditor's statutory demand. There are no ifs, buts or maybes: in accordance with section 459G of the Corporations Act 2001, 21 days means 21 days when it comes to setting aside a creditor's statutory demand.

Applicant relies on Uniform Civil Procedure Rules in excluding Christmas and New Year's period 

In that case, the creditor's statutory demand was served just prior to the Christmas break in December 2016. When calculating the date by which any application to set aside the creditor's statutory demand needed to be filed, the applicant (J & K Homes) did not include the period between Christmas and New Year's Day in reliance of rule 1.9(4) of Schedule 1A of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) which provides that "in calculating a period of time for the purpose of these rules, the period beginning on 25 December in a year and ending at the end of 1 January in the next year is not to be counted."  

As a result, the application to set aside the creditor's statutory demand was filed on 11 January 2017, being 23 days after the date of service.

21 days refers to calendar days under section 459G of Corporations Act and courts do not have power to extend

Brown J held that section 459G of the Corporations Act provides that any application needs to be filed within 21 days - being calendar days, not business days as provided in other sections of the Corporations Act, and that it did not matter that weekend and public holidays fell during that period or that rule 1.9(4) of Schedule 1A of the UCPR provided otherwise. 

The 21 day time limit imposed by section 459G of the Corporations Act cannot be extended by the court or otherwise. This was recognised by Brown J at [9] who stated that:

The fact that the 21 days specified in s 459G may include a period of public holidays which may lead to some parties having shorter time to respond and harsh results given the Court has not got the power to extend the time prescribed, has been recognised by the courts.

Companies served with statutory demands must correctly calculate date and allow time to take action

This case highlights the importance of: 
  1. calculating the date by which any application to set aside a creditor's statutory demand needs to be filed and ensuring that you get it right
  2.  making sure that you seek appropriate advice as soon as you receive a creditor's statutory demand to ensure that you have sufficient time during the 21 day period to negotiate a resolution or to prepare, file and serve any application to set aside a creditor's statutory demand
The last thing you want is to be faced with a situation where you want to apply to set aside a creditor's statutory demand but you are unable to do so because you have miscalculated the expiration of the 21 day period, or because the courts are closed because it is a public holiday.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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