Jun

27

Debt Recovery

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THE IMPORTANCE OF CASH FLOW

The profitability and sustainability of any business often depends on its ability to recover debts. Often businesses can be crippled when large sums of money are due and have not been recovered.

While some businesses have streamlined processes for recovering outstanding monies, others have not. It is very important that if you are having difficulty in recovering debts that you retain the services of a professional at the earliest opportunity.

OUR APPROACH TO DEBT RECOVERY

At  Ferguson Cannon we have a systematized approach to debt recovery. To maximize the prospects of getting your money quickly, we immediately forward a letter of demand to the debtor requiring payment be made within a certain period of time.

If payment is not made as requested we will discuss the options with you including court proceedings for recovery. The time, cost and nature of court proceedings is explained in full to clients.

Once a judgment is obtained against the debtor there are several ways which can be pursued to recover the debt including taking possession of property, garnishing wages and bankruptcy. It is important that debts are pursued early as it increases the chances of full recovery. There are often strict time limits imposed by legislation and the courts to allow proceedings for recovery to be commenced.

TYPES OF DEBT DISPUTES

Debt disputes involve disagreements with another person, business or company about a fixed or agreed sum of money. Examples of a debt dispute include:

  • an unpaid invoice or account
  • rent arrears, other than arrears of rent for a residential tenancy
  • work done and/or goods supplied with the cost having been agreed beforehand
  • money lent and not repaid
  • wages owing
  • an IOU
  • a dishonoured cheque.

Consumer and trader disputes involve disputes against another person, trader or company arising out of a contract for the supply of goods and services.

Goods include:

  • cars
  • building supplies
  • appliances
  • furniture

Services include:

  • trade services
  • professional services such as accounting services
  • work performed by contractors
  • building contract disputes

 Ferguson Cannon already act on behalf of a number of businesses, including both large and small bodies corporate, for debt recovery matters. We are proud of our success rate in the recovery of monies outstanding.

At  Ferguson Cannon, we understand and appreciate that debt recovery is important to the long-term viability of your business. If any part of our costs are able to be recovered we will ensure that this amount is included within the claim against the debtor.

HOW DO I RECOVER DEBT FROM ANOTHER PERSON OR COMPANY?

 

As outlined in the Litigation Process – Contractual Dispute page of our website, the amount of money that you seek to recover will generally determine the process that you must follow to recover the debt that is owed to you. Once you have commenced the debt recovery process in the correct Court or the Queensland Civil and Administrative Tribunal it is important to understand the requirements and timeframes that you must adhere to. At Ferguson Cannon Lawyers we can guide you through these processes.

COURT PROCEDURE ONCE A CLAIM AND STATEMENT OF CLAIM IS FILED

 

Once a Claim and Statement of Claim is filed by a Plaintiff in either the Magistrates, District or Supreme Court, the following timetable of steps is generally followed:

  1. The defendant must file a Notice of Intention to Defend and Defence with 28 days, if they do not the plaintiff may apply for default judgment;
  1. The defendant may file a Counter Claim to the plaintiff’s Claim and Statement of Claim when filing their Notice of Intention to Defend and Defence;
  1. The plaintiff may then file a Reply to the Defence of the Defendant within 14 days;
  1. If the Defendant filed a Counter Claim the Plaintiff may file an Answer to the Counter Claim when filing their Reply to the Defendant’s Defence;
  1. If the Plaintiff files an Answer to a Counter Claim the Defendant may then file a Reply to that Defence within 14 days;
  1. Both the Plaintiff and Defendant must then disclose to the Court all of the documents and evidence that they intend to reply upon when the matter proceeds to Trial;
  1. The matter will then be set down for a Directions Hearing that both parties must attend (this is generally only in Magistrates Court);
  1. If the matter is not resolved at a Directions Hearing the matter will be set down for Trial;
  1. Once the matter is heard at Trial a decision will be reached. That decision is called a Judgment.

QUEENSLAND CIVIL & ADMINISTRATIVE TRIBUNAL PROCEDURE ONCE AN APPLICATION IS FILED

Once an Application is filed in the Queensland Civil and Administrative Tribunal (QCAT), the following timetable of events is generally followed:

  1. The Applicant files an Application first, the type of Application form used by the Applicant will vary depending upon the type of dispute;
  1. The Respondent must file a Response to the Application within 28 days of receiving the Application;
  1. The Respondent may also file a Counter Claim to the Application when filing the Response to the Application;
  1. The Tribunal will then order the Applicant and the Respondent to file a Statement of Evidence outlining the facts that they intend to reply upon when the matter is heard in front of the Tribunal;
  1. The Tribunal will then set the matter down for a Directions Hearing. At the Directions Hearing the Tribunal will set a timetable for all future events, including the date that all expert reports must be filed, the hearing date, list of witnesses, etc.
  1. The matter will then to proceed to a hearing of at the Tribunal. The Tribunal Hearing rooms are located in Brisbane;
  1. Once the matter is heard at a hearing a decision will be reached, that decision is called a Ruling.

Both the Court and QCAT debt recovery process is complicated and varies greatly from matter to matter.

It is very important that if you intend to make a Claim, or receive a Claim or make an Application or receive an Application, that you urgently seek legal advice. There are an enormous number of requirements that are not addressed within this general summary that must be complied with. Legal advice should be sought in that regard.

WHAT HAPPENS ONCE THE COURT ORDERS SOMEONE TO PAY ME MONEY?

Once you receive a Judgment from a Court or a Ruling from the Queensland Civil and Administrative Tribunal that orders someone or a company to pay you money this Judgment or Ruling is enforceable as a money order of the Court. There are various types of enforcement proceedings that may be undertaken to enforce a money order.

The five major types of Enforcement proceedings are:

  1. Enforcement Warrant;
  2. Enforcement Hearing;
  3. Warrant of Seizure and Sale;
  4. Bankruptcy Notice; and
  5. Creditors Statutory Demand.

Bankruptcy Notices and Creditors Statutory Demands are outlined in detail in the Bankruptcy Notices and Creditors Statutory Demand Fact Finder.

ENFORCEMENT HEARING

An Enforcement Hearing uncovers financial information about a person or a company who owes money under a Money Order.

An Enforcement Hearing involves the person or company who is owed money applying to the Court for an Enforcement Hearing to take place.

Once the Application has been made for an Enforcement Hearing, the Court requires the individual or company debtor to attend Court and complete a statement of their financial position or in the case of a company, it requires a Director to attend the Court and complete a statement of financial position for their company. This process allows the creditor to find out the individual or company debtor’s ability to pay the financial obligation that has been outlined in the Money Order.

A creditor can start Enforcement proceedings without leave from the Court within 6 years of the Money Order of Judgment to which the Enforcement Proceedings relate being made.

ENFORCEMENT WARRANTS

An Enforcement Warrant is used to enforce a Judgment or Money Order and recover monies awarded to individuals or companies in the civil jurisdiction of the Magistrates Court.

The Court has the power to order the payment of outstanding debts, restitution or compensation to a person who has suffered a breach of contract, property damage, financial loss or personal injury. Before a Judgment or Money Order can be enforced it must be filed or registered at the Court.

It is important to note that a Judgment or Money Order made in a Federal or interstate Court can be registered and enforced in Queensland. There are several conditions around this occurring. One of them is ensuring that the person required to pay the money lives or has their place of business in Queensland.

It is also important to remember that various Queensland Tribunals and adjudicating bodies require their Judgments, Rulings or Money Orders to be registered in a Court before they can be enforced.

Once a Judgment, Ruling or Money Order has been filed and/or registered in the Court, the individual who is owed money, commonly known as the Enforcement Creditor, can make an Application to the Court for an Enforcement Warrant to be issued to recover the debt owed.

Enforcement Warrants can take various forms and can authorise the seizure and sale of property of the individual or company that owes the money, the re-direction of money that is owed to the individual or company that owes the debt to the Enforcement Creditor or the re-direction of the individuals or companies earnings that owes the debt to the Enforcement Creditor.

WARRANTS OF SEIZURE AND SALE

As outlined above once a Judgment or Money Order has been made by a Court, the Court may issue, after Application by an Enforcement Creditor, an Enforcement Warrant.

A Warrant of Seizure and Sale authorizes an Enforcement Officer to enter private property and seize and sell by public auction the real and personal property of the individual or company that owes money under a Judgment or Money Order.

The proceeds from the auction are then used to pay and satisfy the relevant Money Order or Judgment.

A Bailiff can only take certain goods under a Warrant of Seizure and Sale. For example, a Bailiff cannot take tools of trade (up to a certain value) or a car (up to a certain value) if the relevant individual or company that owed the money needs such items to earn a living.

A Warrant of Seizure and Sale can only be issued by the Court or the Registrar at the Courthouse where the Judgment or Money Order that the Warrant relates to was given, ordered or filed.

The individual or company that is owed money under a Judgment or Money Order can apply for a Warrant of Seizure and Sale without notice to another party.

For further queries regarding the debt recovery process and the Queensland Courts, please contact Byron Cannon, Director byron@fclawyers.com.au  or Samuel Barber, Solicitor sam@fclawyers.com.au or (07) 5443 6600. 

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Category: Conveyancing, Dispute Resolution, Fact Finders, General, litigation

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