No Comments

Preventing a Service Fail – A Tale of Email v. Snail Mail?

 

In one of our recent matters, a client instructed us to bring winding up proceedings against four companies with the same sole director. The total debt across the four companies was over $300,000.00. Whilst there were four applications before the Court, one common issue was whether the companies had been properly served with the statutory demands relating to the debt owed.

On 11 April 2019, statutory demands were sent to all four companies, with the demands posted to the registered offices of the defendants according to the records of ASIC. Unbeknownst to the creditor, the director had vacated the registered premises of two of the companies over a year earlier, but had failed to update ASIC’s records in respect of this change, and had not put in place a mail-forwarding system. The demands addressed to the other two companies were sent to the office of the director’s solicitor.

No application to set aside the statutory demands was filed by any of the 4 companies. Therefore winding up proceedings were filed against the companies on 28 May 2019. The Originating Processes in respect of the winding up applications were served at the same addresses that the statutory demands had been sent.
Continue reading…

No Comments

How to Enforce a Judgment in Debt Recovery – Garnishee Orders

By Chloe Howard,  a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Whilst there are many options for enforcing a judgment debt, in the right matter a Garnishee Order can be an extremely effective debt recovery tool. They are inexpensive to issue and all you need is the debtor’s name to get the process started. So, what is a Garnishee Order and how can a Garnishee Order help in recovering a debt owed to you?

What is a Garnishee Order?

A Garnishee Order is an order of the Court which allows a judgment creditor to recover or ‘garnish’ a debt from a judgment debtor by essentially ‘seizing’ monies from the judgment debtor without their permission by going directly to a third party for payment.

How can a Garnishee Order help recover the debt owed to me?

A Garnishee Order can be enforced in any of the following ways:

Wages

If the judgment debtor is employed and earns an income, a Garnishee Order can be issued to the debtor’s employer. In this situation, the employer will deduct funds from the debtor’s pay cheque and pay that amount directly to you by way of instalments.
Continue reading…

No Comments

No Special Treatment for Lawyers – Debt Recovery for ‘Fools’

By Chloe Howard, a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

They say a person who represents himself has a fool for a client. However if the person is lawyer, at least the ‘fool’ could recover his or her own professional costs in debt recovery proceedings. Or at least that was until a High Court’s decision this week abolished this special treatment for lawyers.

Normally, it is not possible for a self-represented litigant to recover any costs of litigation, including debt recovery. Until recently, however, there was a  benefit of lawyers keeping their own debt recovery in-house: The Chorley exception.  This exception, adopted from the Court of Appeal of England and Wales case of Scottish Benefit Society v Chorley (1884) 13 QBD 872, meant that lawyers who represented themselves in litigation, including debt recovery for their own fees, were entitled to recover the costs associated with litigating that claim.
Continue reading…

No Comments

Can you serve legal documents by Facebook?

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Yes, it is possible to serve documents via Facebook. In an earlier blog “Serving debtors that don’t want to be found“, we discussed how legal documents can be served by substituted service. Service via Facebook, LinkedIn and Instagram are some of the many methods legal documents can be served by substituted service.

In possibly a world first in 2008, the ACT Supreme Court granted orders for substituted service for the police to serve legal documents via a private message on Facebook. Since then, there have been many occasions in which the courts have allowed legal documents to be served via Facebook. You might even remember that in 2012, the District Court of NSW allowed for legal documents to be served on the rapper Flo Rida via his official Facebook page. Those orders for service via Facebook were ultimately overturned on appeal because, among other reasons, the evidence did not show that Facebook page through which the documents were served was actually the Facebook page of Flo Rida.
Continue reading…

No Comments

Serving debtors who don’t want to be found

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In an earlier blog “When is an old debt too old to collect“, we discussed how some of the more difficult to collect debts are often placed in the ‘too hard basket’. An all too common reason that these debts are in the ‘too hard basket’ is because you can’t find the debtor. They’ve moved address and you can’t find them to be able to serve them with legal documents. However, this is not the end!

Yes, the law usually requires that legal documents be served personally. This is to make sure the defendant actually receives the legal documents and knows about the legal proceedings against them.

However, the court rules allow for you to serve legal documents in other ways. This is known as “substituted service”. Legal documents served by substituted service are deemed to be served and will allow you to continue proceedings to recover your debt. Some examples include serving legal documents by email, or even by leaving them at the last known address of the debtor and sending them a text to let them know where the documents have been left. In the social media era the courts are also becoming more prepared to make substituted service orders involving use of social media such as Facebook.

Continue reading…

No Comments

Proposed Changes to Credit Reporting Before Senate: Will it impact debt recovery?

By Bonnie McMahon an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

The Commonwealth government has introduced the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 (“the Bill“), which is currently before the Senate.

If passed, the Bill will require the four major banks (Westpac, Commonwealth Bank of Australia, National Australia Bank and Australia and New Zealand Banking Group) to supply their comprehensive credit information to credit reporting agencies, which will include information regarding customers that have been involved in a debt recovery process. The banks will also be required to keep the information they supply, accurate, complete and up to date, on all existing and new accounts.

How will the bill impact credit providers and debt recovery?

It is expected that these new credit reporting requirements will assist credit providers to make more informed assessments, when determining whether to approve credit applications. Further, it is anticipated that these reforms will assist credit providers to identify which applications may require future debt recovery, if approved.
Continue reading…

No Comments

How to serve a statutory demand

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

In earlier articles, we highlighted the problems that arise when serving a Creditor’s Statutory Demand by post: see You’ve been served! and It Serves You Right?.

This issue reared its head again two weeks ago in winding up proceedings in the Supreme Court of NSW in which we acted for the creditor. The Court was satisfied with all but one element of the evidence required to make the winding up order. The Court did not accept that the statutory demand had been properly posted (even though there was evidence of postage).

The statutory demand had been ‘posted’ by an Australia Post employee attending and collecting it from the office premises rather than the statutory demand being placed into a post box. The Court was not prepared to accept that the statutory demand had been posted because it was unfamiliar with this practice. The Court was more familiar with posting a statutory demand by placing the document into a post box or directly with an Australia Post outlet.
Continue reading…

No Comments

When is an old debt too old to collect?

By Andrew Behman, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Sometimes, we are all a bit guilty of putting some of the more difficult to collect debts in the ‘too hard basket’ for too long. For so long that they become an ‘old debt’. But how long can you leave an old debt before it’s too late to collect? And the old debt becomes ‘statute barred’?

For debts in NSW, the clock generally starts running for a period of 6 years from the date the cause of action first accrues (e.g. the date of default). After the expiry of this 6 year period, the legislation restricts you from recovering the debt and it becomes ‘stature barred’.

However, it is possible to reset the clock on old debts depending on the circumstances and events that take place during the 6 year period. A few examples that might reset the clock for an old debt include:
Continue reading…