Judgment made applying the provisions of the Coronavirus Economic Response Package Omnibus Act 2020 (Cth)

Justice Callaghan of the Qld Supreme Court has delivered one of the few judgments nationally applying provisions of the Coronavirus Economic Response Package Omnibus Act 2020 (Cth), in Sunstate Land Pty Ltd v Hiview Design & Construction Pty Ltd [2020] QSC 181.

Hiview Design & Construction Pty Ltd (Hiview) issued a statutory demand on Sunstate Land Pty Ltd (Sunstate) pursuant to section 495E(2)(e) of the Corporations Act 2011 (Cth).

Justice Callaghan accepted that the demand was served on 1 April 2020, 1 week after commencement of the relevant sections of the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (the Coronavirus Omnibus Act). The demand required payment within the then statutorily prescribed period of 21 days.

Sunsate applied to have the statutory demand set aside.

The Coronavirus Omnibus Act extends the time for payment of statutory demands from 21 days to 6 months. The provisions of the Coronavirus Omnibus Act were found to apply to the demand, which then meant the demand became defective. However, if the demand was not set aside, non-compliance would have meant Sunsate committed an act of insolvency.

In setting aside the demand, his Honour pointed to the intention of Parliament to provide “flexibility to temporarily adjust legal obligations” and achieve the objectives of the Coronavirus Act, which included the facilitation of the “continuation of business”.

This is a sensible decision, achieving the aims of the Coronavirus Omnibus Act.