Form 7 Affidavit Accompanying Statutory Demand

When the Demand Needs an Accompanying Affidavit

A statutory demand needs a verifying affidavit unless the debt, or every debt included, is a judgment debt. Section 459E(3) of the Corporations Act 2001 sets that distinction. An unpaid invoice is not a judgment debt simply because the creditor considers it enforceable.

The documents have different jobs. The demand identifies the debt and requires compliance. The accompanying affidavit verifies the amount due and payable. Evidence supporting a later winding-up application addresses service, non-compliance and the debt still outstanding. Keep that later evidence separate from the affidavit prepared for service with the demand.

The Federal Court’s statutory demand information sheet states a $4,000 minimum and an ordinary 21-day statutory period after service. Those requirements concern the demand process. They do not remove the need to establish the debt or complete the accompanying affidavit correctly.

Choose the Prescribed Form and the Right Deponent

Use the Federal Court’s Corporations Form 7 for the Federal Court procedure described here. Read it with rule 5.2 and rule 2.6 of the Federal Court (Corporations) Rules 2000. For a State Supreme Court matter, identify that court’s corporations rules and prescribed form before adapting a precedent. A matching form number alone does not establish compliance.

The deponent is the person who swears or affirms the affidavit. Rule 5.2 permits the creditor or a person authorised by the creditor to make it. Form 7 requires their relationship to the creditor and the source of their knowledge about the debt.

Choose someone who can explain the records and dealings they rely on. A credit manager who has inspected the account may have that knowledge. A director’s title alone does not explain it. A solicitor preparing the demand must also establish authority and identify the basis of their evidence if acting as deponent.

Before drafting, give the deponent the proposed demand and the reconciled debt schedule. Resolve any payment allocation or disputed invoice they cannot explain.

Verify the Amount Due and Payable

Reconcile the proposed demand against the contract, invoices and receipt records before taking the affidavit. An accounting balance can contain amounts that are not yet payable, disputed charges or payments awaiting allocation.

1. Identify the agreement and each invoice relied on. Record the contractual payment term and confirm that its due date has passed.
2. Match receipts to the bank statement and remittance advice. Investigate an unallocated credit before treating the account balance as unpaid.
3. Deduct credit notes and partial payments. Check whether interest or costs have a contractual or other legal basis before adding them.
4. Separate contested amounts and refer the underlying correspondence for legal assessment. Keep the original ledger figure visible in the working schedule.

A Fictional Debt Reconciliation

In this illustration, a supplier’s ledger shows $18,000 across two invoices. Both payment terms have expired. The creditor also holds a $1,000 credit note and a bank receipt of $5,000 that the ledger has not allocated.

The reconciled account balance is $12,000: $18,000 less $1,000 and $5,000. Separating the contested $3,000 leaves $9,000 for assessment as the proposed demand amount. This arithmetic does not decide whether a genuine dispute or offsetting claim affects that remaining amount.

Incorrect: copying $18,000 from the ledger into both documents ignores a credit and money already received. Correct: retain the adjustments and source references, then obtain a legal decision on the debt that can properly support the demand.

For a large statement bundle, FinTrace removes hours of manual statement review and supplies a searchable ledger with source PDF filenames and pages. That gives the creditor’s legal team direct access to the receipts used in its reconciliation.

Complete and Execute the Affidavit

Complete Form 7 from the settled debt schedule and the deponent’s actual knowledge. Its numbered statements identify the debt, explain the deponent’s authority where required and state how they know the facts. They also confirm that the debt is due and payable and record the deponent’s belief that no genuine dispute exists.

Match the creditor and debtor company names across the demand and affidavit. Compare the debt description and amount line by line. Under rule 5.2, the affidavit’s heading must not contain a proceeding number or refer to court proceedings.

The deponent must swear an oath or make an affirmation before an authorised witness. Complete the jurat, which records the execution details, including the place, date and witness’s designation. Section 45 of the Federal Court of Australia Act 1976 identifies authorised witnesses for Federal Court affidavits. Rule 2.6 also addresses the permitted form where the affidavit is sworn or affirmed.

The Federal Court’s information sheet states that the verifying affidavit must not pre-date the demand. Finalise the demand before execution and compare the dates. If the debt figure changes before service, resolve the change and prepare consistent documents before proceeding. The general affidavit guide explains oath, affirmation and witnessing requirements in more detail.

Serve and Keep a Verifiable Record

Serve the demand and its required accompanying affidavit together, retaining an exact copy of the complete set served. The Federal Court information sheet describes service under section 109X, including delivery to the company’s registered office or personally to a director residing in Australia.

Before releasing the documents for service, complete this file check.

• Confirm the chosen form complies with the applicable court rules.
• Confirm the deponent’s authority and knowledge are recorded.
• Match the debt figure to the reconciled schedule, including receipts and credits.
• Confirm the oath or affirmation and witness details are complete, with an affidavit date no earlier than the demand.
• Compare every page of the service copy with the signed documents.
• Retain evidence of the method and effective date of service, then calculate and record the statutory period.

For postal service, keep evidence of what the envelope contained as well as posting. Do not calculate the period from the demand’s date or assume posting and effective service occur together. The broader statutory demand procedure explains the issue-and-service sequence.

Defects, Disputes and What Comes Next

A genuine dispute, an offsetting claim or an affidavit defect needs legal assessment before the creditor relies on non-compliance as a basis for insolvency proceedings. Sections 459H and 459J address disputes, offsetting claims and other grounds for setting a demand aside. A defect does not automatically produce the same result in every case.

The company’s set-aside application has its own supporting affidavit. Section 459G requires the application and supporting affidavit to be served within the statutory period, with the affidavit filed in that period. The ordinary period is 21 days after service. Treat those steps separately from preparing the creditor’s Form 7.

If winding-up proceedings follow, rule 5.4 requires evidence about service and non-compliance, any set-aside application and the debt still due. A completed Form 7 does not replace that later evidence. Before the next step, reconcile any further receipts and give the solicitor the executed affidavit, service evidence and dispute correspondence together.