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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.
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Subpoena or Notice to Produce – how to get the documents you need!

By Hayley Hitch, an Associate of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Have you ever wondered about the difference between a subpoena and a notice to produce? These can be confusing and sometimes cause delays in proceedings or result in significant additional legal costs.

Both a subpoena and a notice to produce are court forms used once proceedings have been commenced, to obtain documentation from a specific individual or entity. A subpoena can also be issued to require a witness to attend Court and give evidence at a hearing.

In simple terms, a subpoena is issued by the Court to request documents from someone who is not a party to the proceedings. On the other hand, a notice to produce is issued by a party to the proceedings to request documents from another party.

Subpoena

Most courts have rules about how to obtain a subpoena. Under the Uniform Civil Procedure Rules 2005 (NSW) (“the Rules”) for instance, the Court will issue a subpoena if requested by a party. However, if that party is not represented by a solicitor, leave of the court is required (Rule 7.3).
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Securing Property Interests on the PPSR is now mainstream

By Jeffrey Brown, a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

 

The latest statistics published by the Australian Financial Security Authority (AFSA) confirms what I am seeing in the business world – that registering on the Personal Property Securities Register (PPSR) has become an accepted part of trading and credit in Australia.

In the March quarter of 2019 there were 462,578 new registrations created on the PPSR.  That brought the total number of registrations on the PPSR to 10,004,438.  Interestingly, there were over 2 million searches conducted on the PPSR during the March quarter, which represented a sharp increase in searches.  Searches conducted by serial number were by far the most common type of search, accounting for over 1.2 million searches.

I predict that this number will only increase as businesses and consumers come to understand how to use the PPSR more effectively.  Many of my clients have been unaware of the types of interests that they can register on the PPS.  For example, landlords can register their interest in a security bond on the PPSR, and if they do so they can enforce that security to the extent that they are owed money at the conclusion of a commercial lease.  This is despite the PPSR not being directly concerned with “real property” (in other words, land).
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Can I transfer the business of my insolvent Company without conducting “illegal phoenix activity”?

By Jeffrey Brown, a Principal of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group

Many of you will have seen recent publicity concerning a crackdown by the Australian Taxation Office (ATO) and other Government agencies on Illegal Phoenix Activity.

A “phoenix” company is created when an insolvent company is wound up and, immediately before the liquidation takes place, the business is transferred to another company, which typically conducts the business under a similar or even identical name.  The obvious concern for creditors of the wound up insolvent company is that they have no right to recover their debt from the new company now conducting the business.

Although there have been laws in place for many years which allow the liquidator of a wound up company to pursue a new company and its directors in the above circumstances, recovery of funds has been notoriously difficult.

There has been a recent focus on directing Government resources towards funding actions against illegal phoenix operators.
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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.
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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.
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Social Media and the Workplace – A Recent High Court Decision

Can Employees Express their Political Views through Social Media?

The High Court has recently struck down a ruling that a Federal Government department unjustifiably trespassed on the implied constitutional rights of an employee when her employment was terminated over making political tweets.

In essence:

  • the employee brought an unlawful termination claim after her employment had been terminated for making political tweets about her employer, the Department of Immigration and Border Protection
  • the employee argued that her employer had imposed an unreasonable burden on the employee’s implied freedom of political communication
  • the employee had previously succeeded in bringing a claim before the Administrative Appeals Tribunal that dismissing her for anonymous tweets highly critical of government policy trespassed on her implied constitutional rights and failed the “reasonable management action” test
  • the High Court though affirmed the decision by Comcare to deny the employee’s claim for compensation for a psychological condition allegedly aggravated by her dismissal and ruled that it did not constitute an injury because her employer took “reasonable management action
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Child Custody Laws and Independent Children’s Lawyers

An independent children’s lawyer, also known as an ICL, is a Court-appointed lawyer who acts independently to represent the child’s interests in family law proceedings regarding child custody laws. The child, an organization concerned with the welfare of the child or any other person may apply for an ICL to be appointed. The Court may then make an order to appoint an ICL who will attempt to find out what the views of the child are.

The Full Court in Re K [1994] FamCA 21 provided some guidance on what the court might consider when appointing an ICL in matters involving child custody laws, including:

  • Alleged child abuse
  • Unsuitability of either parent
  • Parental conflict
  • Proposal to relocate the child far away
  • Alienation from a parent
  • A parent’s sexual preferences
  • Special medical procedure for the child

Role of the ICL

The role of the ICL is not to take instructions from the child, but rather, to represent the child’s best interests. The ICL should form an independent view of what is in the child’s best interests according to the evidence, act in the child’s best interests and make submissions to the Court regarding the child’s best interests. The child’s best interests must be distinguished, however, from the child’s wishes. An ICL is not obliged to follow the child’s wishes and may disclose information about the child against their wishes if necessary.

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