Serving a Statutory Demand on the Correct Company: A High Court Reminder

Serving a Statutory Demand on the Correct Company: A High Court Reminder

A judgment handed down in the High Court on 14 August 2026 is a clear reminder that a statutory demand only carries weight when it names the right company and reaches it by proper service. Sitting in the Insolvency and Companies List in Leeds, His Honour Judge Richard Carter set out again the threshold a creditor must clear before a winding-up petition can safely proceed, in a case where the demand had to be reissued after it was first served under the wrong company name.

The dispute grew out of a construction contract for the redevelopment of a property. The contractor raised invoices 31 to 34 totalling about £27,000, which the company did not pay. A demand was served on 24 December 2025, but it named the wrong company and had to be reissued on 8 February 2026 in the correct name. The debtor company then applied under rule 7.24 of the Insolvency (England and Wales) Rules 2016 to restrain advertisement of a petition dated 11 March 2026 and to strike it out.

What the Court Weighed in August 2026

The company argued that the debt was genuinely disputed and that it held cross-claims of roughly £83,000 for defective work, an amount well above the petition debt. By a consent order in April 2026 the parties had already recorded their agreement that there was a genuine dispute between them, and the matter was stayed for alternative dispute resolution. At the hearing the court also refused the company permission to rely on two surveyor reports that had been served late, shortly before the listing.

The judge restated the settled principles. A petition can only be presented by a creditor, and a company may challenge that standing by advancing in good faith a substantial dispute as to the debt. Drawing on Angel Group Ltd v British Trading Ltd, Re Bayoil, Dennis Rye Ltd and Tallington Lakes Ltd v South Kesteven District Council, the court confirmed that the threshold for showing a debt is disputed on substantial grounds is not a high one, and a serious cross-claim exceeding the petition debt can be enough to stop advertisement.

How a Statutory Demand Must Be Served

The insolvency process is unforgiving about identity and service. A demand must be addressed to the correct legal entity, using its exact registered name and number, and directed to the registered office or another address at which it will genuinely come to attention. Where the recipient is an individual the rules expect the creditor to take reasonable steps to bring the demand to the debtor personally. Getting the name wrong, as happened here, forces a reissue and resets the clock.

Proof matters as much as delivery. A creditor who cannot show how, when and on whom a document was served is exposed the moment the point is taken. Tremark’s guidance on how process servers prove service and on the certificate of service explains the evidence a court expects. A professionally served demand, supported by a clear statement of service, removes an easy line of attack.

 

When Serving a Statutory Demand Is Not Enough

Correct service is necessary but never sufficient. Even a perfectly served demand will not support a petition if the underlying debt is the subject of a genuine and substantial dispute, or if the company has a real cross-claim that exceeds the sum claimed. The court in this case was prepared to examine the evidence in much the same way as it would on an application for summary judgment, and the parties’ own agreement that a dispute existed shaped the outcome.

For a solicitor advising a creditor, that means the demand is a test of the debt as well as a step in recovery. Presenting a petition on a debt that turns out to be disputed can expose the creditor to the costs of a restraint application and to a claim for the damage that advertisement can do to a solvent company.

The Practical Takeaway for Creditors

Before serving, verify the debtor’s exact registered name and current registered office at Companies House, confirm the debt is truly undisputed, and keep clean proof of service. Serve any supporting evidence in good time rather than on the eve of a hearing. These are small disciplines, but the August 2026 judgment shows how quickly a petition unravels when they are missing. You can read the full decision on the National Archives Find Case Law service, and the governing rules in the Insolvency (England and Wales) Rules 2016.

If you need a statutory demand or winding-up petition served correctly and provably on the right company, fill in the form below to get in touch with the Tremark team.

Frequently Asked Questions

What is a statutory demand?

It is a formal written demand for payment of an undisputed debt. If it is not met or set aside within 21 days, it can be used as the basis for a bankruptcy or winding-up petition.

Does the demand have to be served in person?

The rules expect a creditor to take reasonable steps to bring the demand to the debtor’s attention, and personal service is the safest route for an individual. Companies are served at the registered office or another effective address.

What happens if the debt is disputed?

Proper service will not rescue a petition built on a genuinely disputed debt or a serious cross-claim that exceeds it. The court can restrain advertisement and strike the petition out.