Debt Recovery

Our Services

Does someone owe you money?

Do you have a claim?

Depending on the nature of your claim, our team will guide you through the process to ensure your debt is duly recovered along with interest and costs. The debtor will be ordered to pay your legal costs in the event of a winning judgment.

Received a Letter of Demand?

Defending a claim?

If you have received a Letter of Demand or a Statement of Claim (“Claim”) and you do not think that you owe the person money, you must lodge a Defence within 28 days of the Claim or that default judgment may be awarded against you.

Please call our office urgently if you wish to defend a Claim.

Case Assessment

The Debt Recovery process

1. Assessment of the Case

When approached by a client, we need to assess and categorise the nature of the dispute. Although it may seem straightforward from the client’s perspective, there are often many traps to the unwary creditor.

During this process, questions to be asked include:

·         Why is there a debt owing? E.g. breach of contract, unperformed services

·         Is the debtor contactable? If not, is anybody else aware of the whereabouts of the debtor?

·         Is the debtor located in Australia?

·         Is the creditor located in Australia?

·         Why is the debtor not paying? A genuine defence, financial hardship, or does not want to pay?

·         What is the size of the debt?

·         Does the debtor have assets?

·         Does the creditor know the location of the debtor’s assets?

Letter of Demand

2. Negotiate / Letter of Demand

Negotiations are usually cheaper than litigation. As a result, a creditor should consider providing a discount for prompt return of the money. It will end up saving time and unrecoverable costs, ending up with a higher net result than directly pursing litigation.

A formal letter of demand is a useful tool to begin the negotiation process. It sets out briefly all the key information for the debtor, and acts as an invitation to negotiate. Concurrently, it serves as notice that litigation is about to be commenced and assists in the recovery of legal costs. However, legal costs are ultimately at the discretion of the Court.

Commence Proceeding

3.  Commencing Proceeding

The commencement of any litigation requires significant work, culminating into a precise claim of the material facts which gives rise to the creditor’s legal entitlement of the debt.

Many considerations also factored into the commencement of litigation, such as:

·         Which forums (courts and tribunals) have jurisdiction?

·         If there are multiple, which forum’s rules are the most beneficial to the creditor?

This is a holistic assessment including of whether the matter is likely to be defended (therefore whether default judgment would be pursued), the costs of each forum, etc.

·         Is the claim liquidated or unliquidated?

·         Are there any special rules and caveats for this particular type of case?

Defended / Undefended Proceeding

4. Defended / Undefended Proceeding

If the proceeding is undefended, available to the state courts only and not the tribunals or federal courts is the legal procedure known as ‘default judgment’.

The default judgment procedure is available as method of avoiding a debtor ignoring litigation. Provided the rules of default judgment are satisfied, a creditor is able to apply to the court to award judgment in favour of the creditor where the debtor has not taken any step in the proceedings.

If the claim is for a liquidated debt, the liquidated amount is awarded as judgment plus interest.

If the claim is for unliquidated damages, the loss must be proven to the court prior to the award of any judgment.

If the matter is defended, then the case would need to proceed to trial for determination or settle by negotiation.

Enforcement

5. Enforcement of Judgment       

After judgment is awarded, a debtor owes the amount awarded pursuant to the judgment. If they still do not pay, actions to enforce the judgment may be considered. These include:

·         Examination

·         Garnishee

·         Writ of execution

·         Bankruptcy/liquidation

Each of these options are explored in more detail below.

A decision of the Tribunal needs to be registered prior to enforcement. A decision of the Federal Courts may generally be enforced in the same manner as a judgment of the state court.

Contents contained herein are not intended to be legal advice. Legal advice will only be provided upon consultation with our office.

The Building and Construction Industry Security for Payment Act 1999 (NSW)

Traditionally, construction disputes are among some of the most expensive lawsuits involving heavy proceedings at the Supreme Court. The Building and Construction Industry Security of Payment Act 1999 (NSW) (“SoPA”) has bought this to an end.

The SoPA was implemented to ensure that those who carry out construction works or who supply related goods and services are entitled to receive and recover payments.

More