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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. [...]  READ MORE →

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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. [...]  READ MORE →

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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. [...]  READ MORE →

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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. [...]  READ MORE →

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When does an employee of a company become an “officer”?

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

Later this year the High Court will turn its attention to what makes a person an “officer” of a corporation. Their judgment will be eagerly awaited by those advising companies and their senior management staff.

Earlier this month the High Court of Australia granted special leave to the Australian Securities & Investments Commission (ASIC) to appeal the decision of the Queensland Supreme Court, Court of Appeal in ASIC v King [2019] HCA Trans 104 (17 May 2019). [...]  READ MORE →

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In a Daze about Days – counting the time limit for filing an Application to set aside a Creditor’s Statutory Demand

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

The Supreme Court has today handed down a Judgment that reinforces an established principle about the meaning of the term “within 21 days” in Section 459G(2) of the Corporations Act.

If a company is served with a Creditor’s Statutory Demand, it must, if it wishes to resist the Demand, file an Application with a Court within 21 days. This timeframe cannot be extended, even if both parties agree to do so. [...]  READ MORE →

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Three reasons why your debt collection efforts should not end when your debtor goes bankrupt

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

Most of us assume that the bankruptcy of a debtor that we are chasing for payment is the death knell for any return. It is true that in most cases the end result of bankruptcy is a minimal or zero return for unsecured creditors. However, there is a lot to say for putting in a relatively small effort to ensure that you are in the mix in case funds become available for distribution.

For example: [...]  READ MORE →

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Is Payment of the Debt Guaranteed? The Answer Is Not Always Straightforward…

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

The concept is simple enough: your terms of trade contain a section to be completed and signed by a person who agrees to personally guarantee all debts of your customer. If the customer can’t or won’t pay, you can turn to the guarantor for payment.

The guarantee is a tried and trusted part of the debt collection strategy for many businesses.

Far too often, we see instances where claims for payment made against guarantors run into serious trouble. [...]  READ MORE →

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One year bankruptcy – debt collection is about to get even harder!

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

Proposed amendments to the Bankruptcy Act 1966 which would reduce the duration of a typical bankruptcy from three years to one year have been drafted, and it is a matter of when – not if – the amendments will become law throughout Australia.

The reduction is partly to ensure that bankruptcy does not act as too much of a handbrake on the entrepreneurial spirit.  Business owners should be able to fail once, twice or even more, before succeeding. [...]  READ MORE →

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The Clock is Ticking….

By Renee Smith a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

The time that is available to recover a debt from a debtor is not infinite. Each State and Territory in Australia has set limitation periods that restrict the time available to a creditor to recover a debt.

In relation to simple contract debts (which can include unsecured personal loans, personal guarantee claims, and credit card debts) all States and Territories (except the Northern Territory, where the period is 3 years), have a limitation period of 6 years from the date on which the ‘right of action’ accrued.  For Court judgments, all States and Territories (except Victoria, where the period is 15 years), have a limitation period of 12 years from the date of judgment to enforce that judgment. [...]  READ MORE →

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Paper, who needs paper?

By Renee Smith a Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

In today’s society of evolving technology, contracts between parties can be whipped up in no time. However, what happens when an agreement between two parties is not formalised in writing and a debt is claimed by one party to another. Can the creditor still enforce the payment of the debt? If so, on what terms?

In the recent decision of Saravinovski v Duncombe [2017] NSWSC 1521, the Supreme Court was asked to overturn the decision of a local court magistrate who granted Mr Duncombe, a private investigator, judgment in respect of a debt for unpaid surveillance fees owed to him by Mr Saravinovski. While there was no formal contract signed, the parties had had many discussions regarding particular aspects of the services Mr Duncombe was to provide and which he subsequently delivered. [...]  READ MORE →

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Double Whammy! When cost orders become a further debt

By Hayley Hitch a Solicitor of Matthews Folbigg Lawyers in our Insolvency, Restructuring and Debt Recovery Group

In one of our recent matters, proceedings were commenced against a debtor, and the relevant guarantor, in the Local Court of NSW for recovery of a debt, being non-payment of services rendered by our client to the debtor.

Local Court proceedings

The defendants were at all times self-represented in those proceedings and took steps to file defences, out of time (and without leave) and also failed to appear in Court on several occasions. This ultimately led to: [...]  READ MORE →