Understanding Each Step with Legal Action

Statement of Claim

• Initiates legal proceedings.
• Document is served on the customer in accordance with the court rules
• After the plaint is served, the customer has 28 days to pay the outstanding debt including court costs or file a defence. (See Defence)
• If the debt (plus costs and Interest) is not paid or a Defence filed within the specified time, judgment is able to be entered without further notification to the customer.

Statement of Claim Benefits

• Customer knows that our client is serious about payment of the debt.
• All endorsed court costs, Interest and professional legal fees are recoverable from the customer.
• Allows further enforcement action to be taken once Judgment has been obtained.

Jurisdiction

A Claim must be issued out of the Court within the District where the cause of action arose or the Court nearest to the Defendant. A cause of action can be where an agreement or contract was entered into, where a collision occurred, where goods were supplied or services rendered. (nearest court to the Defendant or Nearest court to Plaintiff).

Notice of Intention to Defend and Defence

After serving the Claim, the Defendant/s have 28 clear days from the date they were served with the Claim to enter a Notice of Intention to Defend and Defence. A Notice of Intention to Defend must give the defendants full details including name, address, telephone no and address for service details (being a residential or business address and any facsimile no/ or an e-mail address.

The Defence must contain the defendant's response to each of the plaintiff's pleadings and give a detailed explanation for any denials or no-admissions of the Plaintiffs claim. After a Defence has been served on the plaintiff the plaintiff must then file and serve a reply to the defence within 14 days. The reply is to address any allegations contained in the defence. If the plaintiff fails to file and serve the reply within 14 days the defendants allegations are taken to be admitted and the plaintiff cannot draw any evidence at trial to counter reply to those allegations.

Application for Summary Judgment

If a Defence does not disclose a proper defence to the plaintiffs claim an Application for Summary Judgment can be made. Previously the courts required an Application for Summary Judgment to be made as soon as possible after a defence is filed, however the Uniform Civil Procedure Rules (Queensland Courts: www.courts.qld.gov.au) allow such an application to be made at any time after a defence has been filed. The rules also show that more than one Application for Summary Judgment can be made. This will be of assistance if further evidence supporting the plaintiff's claim comes to light after an initial Application for Summary Judgment has been made.

Disclosure

Disclosure was formerly known as discovery and is the process whereby one party requests that another party to the action supply it with it's list of documents they have that is relevant to the action or could be relied upon at trial.

After disclosure is sought a party has 28 days to supply the requesting party with it's list of documents. Disclosure is an ongoing responsibility and once, after a list of documents is provided, any further documentation comes into the possession of a party such documentation must be disclosed to the requesting party.

Directions Hearing Conference

A Directions Hearing Conference is a without prejudice meeting where all of the parties to an action, and their legal representatives, meet in an attempt to settle a matter before it's set down for trial.

A Directions Hearing Conference takes place in a meeting room at the Court and is chaired by a Registrar of Deputy Registrar. Any Settlement agreement entered into a Directions Hearing Conference can be recorded on the Court file allowing the plaintiff to enter Judgment against the defendant should the defendant default on any part of the settlement agreement.

If the matter does not settle at a Directions Hearing Conference it is usually set down for Trial.

Delay

If no action is taken in a matter for 1 year from the last step taken the party that wants to proceed with the next step must, before taking any further action, give a months notice of it's intention to proceed to every other party to the action advising of it's intention to proceed with further action (INTENTION TO PROCEED)

If no action is taken in a matter for 2 years from the last step taken, a party cannot proceed further without first being granted leave by the court. Such leave is granted upon an Application by the party wanting to proceed.

JUDGEMENT : All Power Flows from a Judgment

• To enter Default Judgment, service of claim must be proved, and is done by completing an Affidavit of Service
• Interest accrues and may be charged to the defendants account at prescribed court rate.

Benefits

• Secures the clients interests in the debt for another 6-12 years (depending on the state in which Judgment is obtained)
• All court, solicitor and prescribed interest costs are recoverable and are charged to the Defendants account.
• Allows client to continue Legal proceedings with further enforcement action.
• Further enforcement action will result in additional legal costs which will also be charged to the defendants account.

Registration of Interstate Judgment

To register an Interstate Judgment, the court requires a Certified Copy of the Judgment from the originating court to be filed together with the applicable registration fee. (WE LOCATE AN INTERSTATE AGENT TO PROCEED WITH ACTION- YOU SUPPLY THE JUDGMENT)

Once Judgment has been registered Interstate, you then can proceed with recovering the Judgment debt.

Enforcement Warrant for Seizure and Sale of Property (goods)

• Enforcement proceedings after Judgment obtained
• An enforcement officer (Bailiff/Sheriff) is directed to attend the defendants premises and seize goods and/ or chattels to the value of the debt and sells them at public auction for the best available price.
• The enforcement officer gives the customer a short period of time pay the full amount of debt and if no payment is made, he will the seize the goods. The officer often places a sticker on the goods he intends to seize.
• Cars, boats, caravans and trailers may also be recovered however a motor vehicle encumbrance search should be obtained to ensure that there is no encumbered finance outstanding.
• The difficulty with an Enforcement Warrant is that if the debtor does not own anything or if he claims that the goods or vehicles are under lease or lent to him by friends and/or relatives and/or is in joint ownership with the wife, the Enforcement officer will not seize those goods.

Enforcement Warrant for Seizure and Sale of Land

• Enforcement proceedings after Judgment obtained.
• A Writ of Execution will secure the clients interest over real property registered in the Defendants name by appearing on the Certificate of title for 6 months (this is good if they are trying to sell)
• The Real Property will not be sold or transferred with out the Writ being removed within the 6-month period. The Writ can be removed (at the defendants expense) upon payment of the debt.
• The Writ itself expires after a period of 12 months, but may be Re-issued.
• Should you wish to proceed and actually have the property sold, the enforcement Officer is contacted and asked how much funds are required to proceed with an auction over the property. A rough estimate generally $1500.00 but this differs from Court to Court. The enforcement officer requires these funds in his possession before he commences the auction. The majority of these monies are used for advertising costs and auctioneers fees and are recoverable.
• Prior to auction, a kerb side valuation by a registered valuer as to the value of the property has to be provided to the Enforcement officer at the cost of the Plaintiff. Such costs are usually recovered by the Enforcement Officer as part of the Judgment debt.

Examination Hearing Summons

• Enforcement proceeding after Judgment
• The Defendant is brought before the Court and is examined as to his income, expenditure assets and liabilities
• Often the Enforcement Hearing can be used as an opportunity to discuss a repayment arrangement with the Defendant, or identify assets to be seized.
• An Enforcement Hearing is mainly conducted if we are unsure of the defendants assets and liabilities.
• In most cases the Defendant will pay to avoid appearing at court
• Should the Defendant fail to appear an Enforcement Warrant can be issued for his arrest.

Garnishee

• Enforcement proceeding after Judgment
• This is a court order to the defendant's employer to deduct a court ordered amount from the defendant's wage and forward direct to the client
• We cannot issue a garnishee on wages in some states.
• We can only garnishee on wages in South Australia with consent of the Defendant.
• Defendants in NSW and QLD will have to attend an Examination Hearing prior to any Garnishee being granted.
• The difficulty with this is that the Defendants wages may be too minimal for a Garnishee to be issued if the debtor resigns or is terminated from his employment, the Garnishee ceases.
• To issue a Garnishee, it is preferred by the courts to have a Statement of Financial Position to determine the amount that the Garnishee will be issued for.
• Money is automatically deducted from the customers wage and forwarded to you or your client.
• Costs and Interest are added to the Judgment debt.
• Defendant can't forget or refuse to pay
• If the employer doesn't comply with the Garnishee Order the employer will be liable for payments not made as ordered by the courts.
• The employer is entitled to charge an administration fee to the employee for carrying out the instructions of the Garnishee order.

Section 460E

• This legal process is to be used for Company debts only
• Debt must be over $2000.00
• It is not necessary (although you really should) for Judgment or any other Legal proceedings to have commenced prior to issuing.
• The Section 459E Statutory Demand is an initiating process in Winding up the Company.
• The Debtor has 21 days from the date of service to pay in full or make an application for injunction to prevent a winding up application being made.
• Need to ensure that there is no genuine dispute, if not, the client may be ordered to pay the Companies legal costs.

Winding Up Procedure

• ISSUE STATUTORY DEMAND
• SERVE SAME EITHER PERSONALLY OR BY POST
• After 21 days you may file a Winding up Application at Court.
• Serve such Winding Up Application.
• Advertise the Winding Up Application in the Government Gazette and in a newspaper that is circulated in the area of which the debtor Company trades.
• Attend Registrars conference.
• Attend at return date and apply to the Court for the Company to be placed into Liquidation.
• Advise the appointed Liquidator of Appointment.
• It is Global and that includes everything the Company has
• It allows you to bring in associated entities to trace companies assets
• It appoints a Liquidator to determine if and how the company can pay the debt and if any action should be taken against the directors of the Company for insolvent trading.
• It allows you to force sale of real estate. This means you avoid the costs of public auction.
• OUTLAYS, FILING, ADVERTISING ETC (estimated) $800.00 LEGAL FEES (estimated) $1500.00
• PLEASE CONTACT TO DISCUSS COSTS FOR THIS ACTION

Bankruptcy

• Enforcement action after Judgment.
• Debt amount must be over $2000.00
• The petitioning creditors costs are always the first thing paid from Bankruptcy.
• Trustee will look at the financial affairs of the customer for the past 2-5 years and into the future until the debtor is discharged by the court by operation of the Law.
• Preference payments (6 months prior) can be recovered
• All of customer's assets are sold. (Not necessities)
• Unsecured creditors will receive equal prorate dividend payments after secured creditors.
• Debtors need to have property or known assets before we will Bankrupt the debtor as it can be expensive.
• Debtor is officially Bankrupt only after a Sequestration Order is made at the Creditors Petition.
• Passport can be confiscated and debtor can only travel overseas with the Trustee's permission.
• Trustee is able to obtain money from a family trust.
• Can obtain money that has been transferred (property sold recently and suspicious sale)

Procedures

1. Issue Bankruptcy Notice
2. Serve Bankruptcy Notice
3. Debtor has 14-28 days (whatever registrar allows) to comply with notice.
4. After the period expires a Creditors Petition may issue.
5. Serve the Creditors Petition
6. Appear at Court on the return date to obtain Sequestration Order.
7. Trustee appointed by the court to manage and/or control the Bankrupts affairs.

Our Web site is only an introduction to Challenge Commercial Collections. Allow us to answer your questions or send additional information. Please contact us with your enquiry.