Letter of Demand Ignored: Tribunal or Statutory Demand?

You sent a letter of demand. The deadline passed. Nothing happened.

Now you need to decide: tribunal application or statutory demand? The answer depends on how much you are owed, whether the debtor is an individual or a company, and how fast you need enforcement.

Why letters of demand get ignored

Some debtors ignore letters of demand because they dispute the debt, have no money, or think you will not follow through. Others are waiting to see what you do next.

If your letter of demand was ignored, you have two main escalation paths: tribunal application or statutory demand.

Tribunal application vs statutory demand: the key differences

Tribunal application is a formal claim filed with a state or territory tribunal (VCAT, NCAT, QCAT, etc.). It applies to individuals and companies. The tribunal hears both sides and makes a binding order. If you win, you can enforce that order through the courts.

Statutory demand is a formal notice served on a registered company under the Corporations Act. It gives the company 21 days to pay or face presumed insolvency. If the company does not pay or apply to set aside the demand, you can file to wind up the company.

The tribunal is a dispute resolution process. The statutory demand is a compliance mechanism with immediate consequences.

Decision matrix: which path to take

If the debtor is an individual

You must use a tribunal application. Statutory demands only apply to registered companies. Individuals cannot be served with a statutory demand.

File your tribunal application in the state or territory where the debtor lives or where the contract was performed. Each tribunal has a monetary limit:

• NSW (NCAT): up to $30,000
• VIC (VCAT): up to $100,000
• QLD (QCAT): up to $25,000
• SA (SACAT): up to $25,000
• WA (SAT): up to $10,000
• TAS (Magistrates Court Small Claims): up to $5,000
• ACT (ACAT): up to $25,000
• NT (Local Court): up to $25,000

If your debt exceeds the tribunal limit, you need to file in the relevant state or territory court. That typically requires a lawyer.

If the debtor is a company and the debt is under $4,000

You must use a tribunal application. Statutory demands require a minimum debt of $4,000 under the Corporations Act.

Check the ASIC register to confirm the debtor is a registered company (Pty Ltd or Ltd). Then file your tribunal application in the state where the company is registered or where the contract was performed.

If the debtor is a company and the debt is $4,000 or more

You can choose either path. This is where the decision gets strategic.

Use a statutory demand if:

• The debt is undisputed and liquidated (a specific, ascertained amount)
• You want immediate pressure — 21 days to pay or face wind-up proceedings
• You do not want to attend a hearing
• The company is solvent and will pay to avoid insolvency proceedings
• You are prepared to follow through with wind-up proceedings if they do not pay

Use a tribunal application if:

• The debt is disputed (the company claims they do not owe the full amount)
• The debt is unliquidated (damages, not a fixed sum)
• You want a binding tribunal order that is easier to enforce
• You prefer a hearing where both sides present evidence
• The company might set aside a statutory demand on genuine dispute grounds

If you need speed

Statutory demand is faster. The company has 21 days to comply. If they do not pay or apply to set aside the demand, you can file a wind-up application immediately. The entire process can be complete in 4-6 weeks if the company does not defend.

Tribunal application takes longer. After filing, the tribunal schedules a directions hearing, then a final hearing. The process typically takes 3-6 months depending on the tribunal’s backlog and whether the debtor files a defence.

If you want enforceability

Tribunal order is easier to enforce. Once you have a tribunal order, you can enforce it through:

• Garnishee order (seize money from the debtor’s bank account)
• Instalment order (court-ordered payment plan)
• Examination summons (force the debtor to disclose assets)
• Warrant of execution (sheriff seizes and sells the debtor’s goods)

Statutory demand does not give you a judgment. If the company pays within 21 days, you get your money and the matter is closed. If they do not pay and do not apply to set aside, you can file to wind up the company — but that is a separate, expensive process that requires a lawyer.

The statutory demand is a threat. The tribunal order is a judgment you can enforce.

How to file a tribunal application

Each state and territory tribunal has its own forms and filing fees. The general process:

1. Complete the application form — available on the tribunal website
2. Attach your evidence — contract, invoices, emails, letter of demand, proof of delivery
3. Pay the filing fee — typically $50-$200 depending on the claim amount
4. Serve the application — the tribunal will serve it, or you may need to arrange service
5. Attend the hearing — present your case, the debtor presents theirs, the tribunal makes an order

ClaimDone prepares tribunal applications for all Australian states and territories. Upload your evidence, complete the intake form, and we generate a ready-to-file application citing the applicable law and tribunal rules. You file it yourself with the tribunal.

How to serve a statutory demand

A statutory demand must comply with the Corporations Act and Corporations Regulations. The process:

1. Prepare Form 509H — the prescribed form under the Corporations Regulations
2. Prepare a supporting affidavit — sworn before a JP or solicitor, verifying the debt
3. Serve the demand — personal service on the company’s registered office or a director
4. Wait 21 days — the company must pay, apply to set aside, or do nothing
5. If they do nothing — you can file a wind-up application (requires a lawyer)

ClaimDone prepares Form 509H and the supporting affidavit template for $197. You arrange service and swear the affidavit before a JP or solicitor.

What if the debt is disputed?

If the debtor genuinely disputes the debt, do not serve a statutory demand. The company can apply to set aside the demand on the grounds of genuine dispute. If the court agrees, the demand is set aside and you pay their legal costs.

Use a tribunal application instead. The tribunal will hear both sides and determine whether the debt is owed.

What if the debtor has no money?

If the debtor is insolvent, neither path will get you paid. A tribunal order against someone with no assets is unenforceable. A statutory demand against an insolvent company will trigger wind-up proceedings, but unsecured creditors rarely recover anything in liquidation.

Before escalating, check:

• Does the debtor own property? (search the land titles register)
• Does the debtor have a job or income? (garnishee orders require a known income source)
• Is the debtor trading? (companies with no assets or activity are not worth pursuing)

If the debtor is genuinely insolvent, you may need to write off the debt or negotiate a payment plan.

How ClaimDone helps

ClaimDone prepares both tribunal applications and statutory demands.

Tribunal application: Upload your evidence, complete the intake form, and our Proprietary AI Engine generates a ready-to-file application citing the applicable law and tribunal rules for your state or territory. You file it yourself with the tribunal. Flat fee, all states, prepared in 60 minutes.

Statutory demand: Upload your evidence, complete the intake form, and we prepare Form 509H and the supporting affidavit template. You arrange service and swear the affidavit before a JP or solicitor. $197 flat fee, prepared in 60 minutes.

Both services include the legal research, document drafting, and formatting required to comply with the relevant legislation.

Final decision: tribunal or statutory demand?

Use this decision tree:

• Debtor is an individual: Tribunal application
• Debtor is a company, debt under $4,000: Tribunal application
• Debtor is a company, debt $4,000+, undisputed, you want speed: Statutory demand
• Debtor is a company, debt $4,000+, disputed or unliquidated: Tribunal application
• You want a judgment you can enforce: Tribunal application
• You want immediate pressure with no hearing: Statutory demand

If you are unsure, start with a tribunal application. It works for all debtors, all debt sizes, and gives you a binding order you can enforce. The statutory demand is a specialist tool for specific circumstances — registered companies, undisputed debts over $4,000, and debtors who will pay to avoid insolvency proceedings.

Your letter of demand was ignored. Now you escalate. ClaimDone prepares your tribunal application or statutory demand in 60 minutes. Upload your evidence and we handle the rest.

Frequently Asked Questions

Can I serve a statutory demand on an individual?

No. Statutory demands under the Corporations Act only apply to registered companies (Pty Ltd or Ltd). If the debtor is an individual, sole trader, or partnership, you must file a tribunal application or court claim instead.

What happens if the company ignores the statutory demand?

If the company does not pay or apply to set aside the demand within 21 days, it is presumed to be insolvent under the Corporations Act. You can then file an application to wind up the company. This requires a lawyer and involves court proceedings, but the presumption of insolvency makes it difficult for the company to defend.

Can I file a tribunal application if the debt is over the tribunal limit?

No. Each tribunal has a monetary limit (e.g. $30,000 in NSW, $100,000 in VIC). If your debt exceeds the limit, you must file in the relevant state or territory court (District Court, County Court, or Supreme Court). That typically requires a lawyer.

How long does a tribunal application take?

Typically 3-6 months from filing to final hearing, depending on the tribunal’s backlog and whether the debtor files a defence. Some tribunals offer expedited processes for urgent matters or undefended claims.

What if the debtor disputes the statutory demand?

The company can apply to the court to set aside the demand on the grounds of genuine dispute, offsetting claim, or defect in the demand. If the court agrees there is a genuine dispute, the demand is set aside and you pay their legal costs. Do not serve a statutory demand if the debt is genuinely disputed — use a tribunal application instead.