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There is an inherent difficulty in balancing the financial viability of a school with the desire to educate will often come to a head because educating the child is no longer possible. In such cases, it may be necessary to recover school fees through legal proceedings. This instalment of the blog series provides a short summary of the standard recovery process.

  1. Settlement – Negotiations over the terms of a settlement will often continue for the duration of the legal proceedings. Settlement does not mean complete compromise; it may simply mean that the parties have recognised that the cost of legal fees will mean that payment of the unpaid fees is more efficiently and economically resolved between the parties. Legal proceedings can sometimes be necessary to draw parents and guardians to that conclusion.
  2. Legal Letters – A letter of demand provides the parents and guardians with a final opportunity to make payment before Court proceedings are commenced. If drafted on the letterhead of a law firm, this letter will often elicit a response from the parents and guardians. This response may include information about their position as relevant to the commencement and resolution of legal proceedings and, in the best case, provide for the payment of the unpaid fees.
  3. Court Proceedings – Court proceedings are commenced by filing a Statement of Claim in which the school can claim the unpaid fees, interest and some of their legal costs. There are generally two avenues once the Statement of Claim is filed:
    1. Undefended proceedings – an inadequate (or no) response from the parents and guardians which leads to Default Judgment being awarded in favour of the school; or
    2. Defended proceedings – the debt recovery matter proceeds as a case before the Local Court.
  4. Enforcement – Once judgment has been made in favour of the school, there are several options available to obtain payment from parents or guardians including garnishing wages or existing bank balances, Court ordered payment plans and orders for the sale of personal property. The suitability of these options varies in view of the amount to be recovered and the school’s desire to maintain a relationship with student and their parents and guardians.

In the interest of costs and maintaining relationships, the school should exhaust all informal recovery options prior to commencing legal proceedings. However, if your school is considering recovering its fees through legal proceedings, we invite you to contact the Matthews Folbigg on 9635 7966 and talk to our friendly Debt Recovery team about your options.