A creditor should not issue a creditor’s statutory demand if there is a genuine dispute about the existence or the amount of a debt.
A genuine dispute is a dispute that is real and not hypothetical or spurious.
The threshold for a debtor seeking to prove the existence of a genuine dispute is low and the Court will not look into the merits of the dispute, rather, the Court will only determine whether the genuine dispute exists or not.
Some examples of a genuine dispute may include:
If a debtor receives a creditor’s statutory demand and the debt referred to in the demand is disputed, the debtor may apply to the Court to set aside the demand.
Creditors should carefully consider whether there is a dispute relating to a debt prior to issuing a creditor’s statutory demand and as always, exercise caution when issuing a demand.