AUCTIONSlegal
Statutory Demands –
a serious wind-up
Verona Cocks says in tough times, the tough
get legal. Statutory Demands can be set aside
and defended on certain grounds. A recent case
highlighted the issue in property transactions
AHMED V LANDSTONE LEISURE LTD, An individual can apply to set aside a demand within 18 days
Court of Appeal - Chancery Division, from receipt and there are specific circumstances in which the
JANUARY 30, 2009, [2009] EWHC 125 (Ch) court will allow this. In the recent case Waheed Ahmed v
Landstone Leisure Ltd, Birmingham High Court considered those
n the current economic climate it comes as no surprise that the very circumstances when it heard an appeal against the refusal to
I
ability to raise finance by the collection of debt is an important set aside a Statutory Demand based on a bounced cheque.
consideration in property transactions – or at least it should be;
the old adage that ‘cash is king’ could not be more true. CONVOLUTED PURCHASE AND PAYMENT
A Statutory Demand is one mechanism that can be used to Mr Ahmed had given the cheque as a deposit to his brother. His
force a debtor to pay the sum due. It is a formal demand under brother was purchasing some land at auction on behalf of another
the Insolvency Act for payment which, if not complied within a brother, who was acting for a third party. The cheque was
specified period, will entitle the creditor to present a bankruptcy or subsequently dishonoured at Mr Ahmed’s instruction on the basis
winding up petition, depending on the nature of the debtor. that the plot of land they thought they were buying had been
64 JUNE 2009 PROPERTYdrum
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