Agilo Ltd v William Henry [2010]
H was a director of L. AMF provided L with a loan facility through its agent, AUK. H gave a personal guarantee for the liabilities of L to AMF. AMF and AUK were all parties to the guarantee.When L defaulted on the loan facility, AUK issued a statutory demand against H. H applied to set aside the statutory demand on the grounds that his obligations under the guarantee were to AMF not AUK.
The High Court upheld the first instance decision to set aside the statutory demand. The court said that it was an absolute rule that the demand must be issued in the name of the creditor.
The High Court determined that it was correct to set aside a statutory demand (under rule 6.5(4) of the Insolvency Rules 1986) because it had the wrong creditor’s name it.
Creditors must make sure that statutory demands are accurate before serving them on debtors, otherwise they may be exposed to additional costs.
A court will set aside a statutory demand which:
- Contains incomplete, misleading or inaccurate details of the debt claimed.
- Is issued by or on behalf of a party that was not a creditor at the date of the demand.