As a dispute lawyer, I often see clients leave important court documents to the last minute, or too late. When you are in financial difficulty, it may feel best to bury your head in the sand. It’s far less stressful, and perhaps it will all just go away if you ignore it. The problem is, it doesn’t. In fact, you are doing yourself a disservice if you don’t act quickly and handle things head on. In this article, we look at some of the legal documents that are served and ignored.

Director Penalty Notice

Companies are obliged to meet their Pay As You Go (PAYG) withholding and Superannuation Guarantee Charge (SGC) amounts and a company director you have a legal responsibility to ensure the company meets the obligations. The company director becomes liable for the unpaid amount if the company fails to do so.

A Director Penalty Notice (DPN) is an enforcement action commenced by the Australia Taxation Office against directors of companies. It carries serious consequences so if you are served with one, you need to attend to it immediately. However, if the company has reported within three months of the due date the unpaid amounts, your options are:

  • Having a liquidator appointed to wind up the company;
  • Payment of the debt in full; or
  • Appoint a company administrator.

Within 21 days of the notice being issued, these actions need to be undertaken. If they are not, the director is liable until the debt is paid in full. This can mean court proceedings commenced by the ATO against you for the debt in full.

Statutory Demand

If your business or company is served with a statutory demand, it is imperative that you respond to it within 21 days. If you have received on and believed the company should not comply with it, then you can apply to the court to have it set aside. There are three main ways in which you can do this:

  • There is a genuine dispute about the existence of the debt OR the amount that is owed.
  • If your company has an offsetting claim which then brings the debt below the statutory amount (less than $2,000); or
  • There is a defect in the notice.

If you fail to pay the debt or make your application to set it aside then by failing to respond your company can be presumed insolvent and then apply to wind up your company.

Statement of Claim

If you as an individual or your company is served within 28 days, then you have a limited time frame in which to respond to the claim. This is done by either paying the money sought in the Statement of Claim or by filing a defence. If you do not do either within the time frame, then it is open to the other party (the plaintiff) to apply for default judgment.

Court Documents are Important

As you can see, there are significant consequences when you fail to respond to these important legal documents. The best approach is to seek legal advice straight away as this is when you have more legal options available to you. LegalVision has disputes lawyers who are able to provide you with advice about your dispute and your legal documents

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Emma George
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