Barry has suffered a workplace injury, but his life insurance company (“MPA”) won’t pay out on his Total Permanent Disability (“TPD”) claim.
Frustrated and upset, he issues a statutory demand (“SD”).
The statutory demand describes his claim on the basis that the CEO of MPA failed to answer the “Common Law Commercial Lien in Tort” (“CLCLT”) within 30 days and that, by reason of the default, MPA is liable for $3m.
MPA is slightly confused by the SD, because what is a CLCLT and how can they be liable for $3m, when the max payout could only ever be $457,450?
MPA applies to the NSW Supreme Court (“NSWSC”) for orders setting aside the SD on the following basis:
(1) Barry didn’t specify a service address in NSW, he lives in WA (s 459E(2) Corps Act and Sch 2 Corps Regulations);
(2) the debt being specified as CLCLT is confusing, ambiguous and not recognised by the law (s 459J(1)(a) Corps Act);
(3) the demand refers to the CEO of MPA rather than MPA itself, therefore, it’s not clear who is liable (sn 459J(1)(a)); and
(4) the debt amount is grossly excessive by more than $2.5m (s 459J(1)(b)).
MPA is successful and Barry is left paying a hefty legal bill for MPA.
This is a true story.