New Zealand Law
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The applicant has to file an affidavit in support of the application to set aside the statutory demand. The respondent then has an opportunity to file in reply. The judge will then have a hearing where he will assess the evidence on these documents and any legal submissions in support as to the legal tests. In my experience this can be a robust approach, where dubious allegations of a factual dispute usually are rejected
The test is not whether there is a dispute, but whether there is a real dispute. My experience of arguing a reasonable number of the applications is that the evidence is carefully examined, and that it must be credible and well presented to permit setting aside of the demand. It is certainly not automatic.