Unpaid Invoice Over $10,000: Statutory Demand or Tribunal?

# Unpaid Invoice Over $10,000: Statutory Demand or Tribunal?

You’ve done the work. You’ve sent the invoice. You’ve followed up. Now the debt sits at $10,000 or more, and the other party has gone silent.

At this level, you need a recovery strategy that carries commercial weight. This guide explains your options when an unpaid invoice crosses the $10,000 threshold in Australia.

Why $10,000 Changes Your Options

Most Australian state tribunals cap their jurisdiction between $10,000 and $25,000. Once your debt exceeds the lower threshold:

• Small claims procedures may no longer apply
• Filing fees increase
• The debtor knows you’re serious enough to escalate
• Alternative enforcement tools become available

If the debtor is a registered company, you gain access to one of the most powerful debt recovery mechanisms in Australian law: the statutory demand under the Corporations Act 2001.

Statutory Demand vs Tribunal Application: The Core Difference

Statutory demand — a formal notice served on a company debtor demanding payment within 21 days, or face presumed insolvency and potential wind-up proceedings. Only available against registered companies. Minimum debt: $4,000. No court filing required initially.

Tribunal or court application — a formal claim filed with VCAT, NCAT, QCAT, or the relevant state tribunal (or District/Supreme Court if above tribunal limits). Available against companies, sole traders, partnerships, and individuals. Requires filing fees, evidence bundles, and a hearing.

The statutory demand is faster, cheaper, and more threatening. The tribunal application gives you a judgment you can enforce through multiple channels.

When to Use a Statutory Demand (Company Debtors Only)

A statutory demand is the right tool when:

• The debtor is a registered Pty Ltd or Ltd company (check the ASIC register)
• The debt is $4,000 or more
• The debt is liquidated — a specific, ascertained sum, not estimated damages
• The debt is undisputed — the company has not raised a genuine dispute about the amount or liability
• You want to apply maximum commercial pressure without going to court immediately

How a Statutory Demand Works

You prepare the required form and a supporting affidavit verifying the debt. The form is served personally on the company’s registered office. The company has 21 days to either:

1. Pay the debt in full
2. Apply to set aside the demand (typically costs them $2,000–$5,000 in legal fees, and they must prove a genuine dispute)
3. Do nothing — and become presumed insolvent

If they do nothing, you can apply to wind up the company after the 21-day period expires. Most companies pay rather than face wind-up proceedings.

Limitations of Statutory Demands

• Only works against companies — not sole traders, partnerships, or individuals
• Cannot be used for genuinely disputed debts — if the company can show a real dispute, the demand will be set aside
• Does not give you a judgment — it’s a notice, not a court order
• Requires precise compliance — errors in the form or affidavit can invalidate the entire demand

If your debtor is a sole trader, partnership, or individual, a statutory demand is not available. You need a tribunal or court application.

When to Use a Tribunal Application

A tribunal application is the right tool when:

• The debtor is not a company (sole trader, partnership, individual)
• The debt is disputed and you need a hearing to prove your case
• You want a formal judgment you can enforce through garnishment, property liens, or bankruptcy
• The amount is within your state’s tribunal jurisdiction

Tribunal Jurisdiction by State (Approximate Limits)

• NSW (NCAT): $30,000 for general division
• VIC (VCAT): $100,000 for civil claims
• QLD (QCAT): $25,000 for minor civil disputes
• SA (SACAT): $25,000 for minor civil disputes
• WA (SAT): $10,000 for general division
• TAS (Magistrates Court): $20,000 for small claims
• ACT (ACAT): $25,000 for general division
• NT (Civil & Administrative Tribunal): $25,000

If your debt exceeds these limits, you file in the District or Supreme Court — which means higher filing fees, longer timeframes, and often the need for a solicitor.

How a Tribunal Application Works

You file an application with the relevant tribunal, pay the filing fee (typically $200–$800 depending on state and amount), and serve the debtor. The tribunal schedules a hearing. You present your evidence: the invoice, the contract or agreement, proof of delivery, correspondence showing non-payment.

If you win, you receive a tribunal order. That order can be enforced through:

• Garnishment of the debtor’s bank accounts or wages
• Seizure and sale of assets
• Registration of a charge over real property
• Bankruptcy proceedings (if the debtor is an individual and owes $10,000+)

Limitations of Tribunal Applications

• Takes longer — typically 2–6 months from filing to hearing
• Costs more upfront — filing fees, evidence preparation, potential hearing attendance
• Debtor can defend — they can file a counterclaim or dispute, extending the process
• Enforcement is separate — winning the order does not guarantee payment; you must enforce it yourself

Unpaid Invoice Over $10,000: Decision Tree

Is the debtor a registered company?

• Yes → Is the debt undisputed and liquidated?
• Yes → Use a statutory demand (faster, cheaper, more pressure)
• No → Use a tribunal or court application (you need a hearing to prove the debt)

• No (sole trader, partnership, individual) → Is the amount within your state’s tribunal limit?
• Yes → File a tribunal application
• No → File in District or Supreme Court (consider engaging a solicitor)

What Happens After You Serve a Statutory Demand

The company has 21 days from the date of service. During this period, they can:

1. Pay the debt — most do, because the alternative is wind-up proceedings
2. Apply to set aside the demand — they must file an application in the Supreme Court within 21 days and prove a genuine dispute or offsetting claim
3. Do nothing — after 21 days, the company is presumed insolvent, and you can apply to wind up the company

If they apply to set aside, you will need to respond. If they do nothing and do not pay, you can instruct a solicitor to file a wind-up application. The threat of wind-up is usually enough to force payment.

What Happens After You File a Tribunal Application

The tribunal serves the debtor with your application. The debtor has a set period (usually 28 days) to file a response. If they do not respond, you can apply for a default judgment.

If they do respond, the tribunal schedules a hearing. Both parties present evidence. The tribunal member makes a decision. If you win, you receive a tribunal order.

You then enforce the order through the state sheriff, garnishment, or other enforcement mechanisms. If the debtor is an individual and owes $10,000 or more, you can also issue a bankruptcy notice.

Combining Strategies: Demand Letter First, Then Escalate

Before you serve a statutory demand or file a tribunal application, send a formal letter of demand. This written notice:

• States the amount owed
• Cites the applicable law or agreement
• Gives a final deadline (usually 7–14 days)
• Warns of escalation to statutory demand or tribunal proceedings

A well-drafted letter of demand resolves most disputes without further action. If the debtor ignores it, you escalate to the statutory demand (if a company) or tribunal application (if not).

ClaimDone’s letter of demand service drafts and sends your letter automatically for $79. If the debtor does not pay, you move to the next stage.

How ClaimDone Helps with Statutory Demands

If your debtor is a company and the debt is over $4,000, ClaimDone prepares your statutory demand in under 60 minutes.

You complete a short intake form. Our Proprietary AI Engine analyses your invoice, contract, and correspondence, then generates the required form and supporting affidavit template. You swear the affidavit before a JP or solicitor, then serve it on the company’s registered office.

Flat fee: $197. No subscription. Australia-wide.

ClaimDone does not give legal advice. For complex disputes, high-value debts, or if the company applies to set aside your demand, consult a qualified Australian solicitor.

Final Considerations

An unpaid invoice over $10,000 is a serious commercial matter. The right enforcement option depends on:

• Whether the debtor is a company or individual
• Whether the debt is disputed
• How quickly you need resolution
• Your tolerance for court proceedings

Statutory demands are fast and powerful but only work against companies. Tribunal applications work against anyone but take longer and cost more upfront.

If the debtor is a company, the debt is undisputed, and you want maximum pressure with minimum cost, start with a statutory demand. If the debtor is not a company or the debt is disputed, file a tribunal application.

Get Started with ClaimDone

For company debtors (statutory demand): Visit ClaimDone’s statutory demand service, complete the intake form, and receive your form and affidavit template in under 60 minutes. Flat fee: $197.

For non-company debtors or disputed debts (tribunal application): Visit ClaimDone’s tribunal application service for state-specific guidance and document preparation.

For a final warning before escalation: Start with ClaimDone’s letter of demand service — drafted by our Proprietary AI Engine and sent automatically for $79.

ClaimDone does not give legal advice. For complex, high-value, or disputed debts, consult a qualified Australian solicitor.

Frequently Asked Questions

Can I use a statutory demand for a $10,000 debt owed by a sole trader?

No. Statutory demands under the Corporations Act 2001 only apply to registered companies (Pty Ltd or Ltd). For sole traders, partnerships, or individuals, you must file a tribunal or court application to recover the debt.

What happens if the company disputes the debt after I serve a statutory demand?

The company has 21 days to apply to the Supreme Court to set aside the demand. They must prove a genuine dispute or offsetting claim. If they succeed, the demand is set aside. If they fail, they must pay your costs and the debt remains due. Do not serve a statutory demand if you know the debt is genuinely disputed.

Is $10,000 too high for a tribunal application in my state?

It depends on your state. Most tribunals accept claims between $10,000 and $100,000. NSW (NCAT) allows up to $30,000 for general division, Victoria (VCAT) allows up to $100,000, Queensland (QCAT) and South Australia (SACAT) allow up to $25,000. Check your state’s tribunal website or use ClaimDone’s state-specific tribunal application service for guidance.

How long does it take to get paid after serving a statutory demand?

The company has 21 days to pay or apply to set aside the demand. Most companies pay within this period to avoid wind-up proceedings. If they do nothing, you can apply to wind up the company, which usually prompts immediate payment. Total timeline: 3–6 weeks in most cases.

Can I issue a statutory demand and file a tribunal application at the same time?

No. You cannot pursue both simultaneously for the same debt. Choose one path. If the debtor is a company and the debt is undisputed, use the statutory demand. If you need a formal judgment or the debtor is not a company, use the tribunal application.