INS11289 - Prepare and issue statutory demand

Errors in statutory demands

It is vital to maintain high standards

• To keep the Revenue’s reputation with the courts
• Errors may create confusion and take time and money to sort out.

Courts are reluctant to grant an order to set aside or strike out a statutory demand. The Court will consider whether the debtor was actually prejudiced by the defects.

There may be grounds for a set-aside when the defect is fundamental, for example when there is

• Genuine confusion as to the identity of the debtor in the demand and accompanying documents
• A failure to allege that the debt is tax related
• An error or more than 25% in the total figure claimed.

(But fundamental errors may not cause actual prejudice.)

Other errors or defects which are not fundamental may be considered to be general errors, but three or more occurring in the same demand may be grounds for a set-aside. Seek advice from Solicitor's Office when time allows.

An error can be cured and any prejudice may be overcome by making clear the position in accompanying documents, or by writing to the debtor.

When writing, alert the debtor that any application to strike out the demand will cause delay and that delay will cause interest to accumulate.

If time limits allow, give at least 28 days (21days after service plus a further seven to allow for postage) between any letter of explanation and service of the petition.

But if the four-month period for service of the petition is too close, it will be better to proceed unless

• It is clear that there is a fundamental error, or
• There are four or more general errors, or
• There may be limitation periods if the Revenue continues and the demand is struck out at a later hearing.

In such cases a new demand should be promptly issued and served. When possible consult Solicitor's Office.

A clear and precise bankruptcy petition will cure all defects. (If taken with an earlier letter explaining the position, it would be difficult to claim prejudice.)