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OFFER UP!

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Calderbank offers are based on the principles outlined in the English case of Calderbank v Calderbank [1975] 3 All ER 333. Whether you are the offeror or the offeree, it is important to understand the effect of these offers.

Calderbank Offer: What is it?

A Calderbank offer is designed to put the offeror in a position to apply to the court for an indemnity costs order, in circumstances when the offeror receives a better outcome than the amount that was offered. Should an indemnity costs order be granted, the unsuccessful party will pay a higher proportion of the successful party’s costs. Emphasis is placed on the word “higher”. In many civil jurisdictions (but by no means all), “costs follow the event,” and so the unsuccessful party might expect to have to pay some of the successful party’s costs. If ‘indemnity’ costs are awarded, the amount payable is higher. Somewhat  counterintuitively however, the amount is almost never “all” the successful party’s costs, for various reasons. However, in many cases the difference between recovering some costs, and recovering a much higher proportion of those costs, can make an enormous difference. And by making a Calderbank offer, a party will improve the chances of recovering a higher proportion of costs. [...]  READ MORE →

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Debt Recovery of Judgments – Debt Collection and the Judgment Debtor

By Jamieson Naylor, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

Debt recovery can be quite confusing and while all debt collection will vary in complexity, here are some answers to a few of our most commonly asked debt collection questions. Hopefully these will help clarify the debt recovery process.

 

What is the best debt collection process to reduce outstanding invoices?

It may sound trite but the best way to avoid debt collection is not to become involved in the debt recovery process in the first place! Well established credit management procedures can minimise the chances of debtors delaying payment and avoid the need for formal debt recovery processes (including debt collection agents (or even debt recovery lawyers). If you are having difficulty with the volume or age of your receivables, it would be worth seeking legal advice on template contracts, terms and conditions and any other credit management procedures that are in operation, which might give you the edge on managing the debt collection process and avoiding formal debt recovery processes. [...]  READ MORE →

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Get out of (Liability) Gaol Free under section 447A

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

Section 447A of the Corporations Act 2001 (Cth) (“the Act”) enables the Court to make such orders as it thinks appropriate as to the operation of Part 5.3A of the Act. Since its introduction, the Courts have adopted an expansive construction of the provision and have liberally applied the power in a variety of contexts. Accordingly, the provision has become something of a panacea for multiple ills in the context of voluntary administration and has been used in various instances among others to: [...]  READ MORE →

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Do you want to continue litigation against a party declared bankrupt? The Federal Court of Australia provides insight in Yan v Spyrakis as trustee in bankruptcy for Liu [2022] FCA 872

By Aritree Barua, Solicitor at Matthews Folbigg Lawyers.

In Yan v Spyrakis as trustee in bankruptcy for Liu [2022] FCA 872 (“Yan v Spyrakis”), the Federal Court of Australia (“FCA”) re-stated the principles to be applied when considering whether to continue litigation against a party that has been declared bankrupt.

Background

Mr Liu (“the Bankrupt”) was made bankrupt on 11 November 2011 on his own petition. At the time of his bankruptcy, there were proceedings pending in the Supreme Court of New South Wales (“the Supreme Court proceedings”) in which the Bankrupt and a number of related companies were the defendants and Mr Yan was the plaintiff. [...]  READ MORE →

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Replacing a Trustee of a Bankrupt Estate

By Aritree Barua, Solicitor at Matthews Folbigg Lawyers

If you are concerned about the appointment of a trustee of a bankrupt estate, or you have a disagreement with a trustee, or a trustee has decided to retire, you may be able to replace that trustee. This article explores various ways in which you can replace a trustee of a bankrupt estate.

Replacing a trustee by resolution at a creditors’ meeting

If you are a creditor, you can remove and replace a trustee of a bankrupt estate by way of a resolution at a creditors’ meeting (Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), Schedule 2 (“the Insolvency Practice Schedule”), section 90-35(1)). Notice of the meeting must be provided to all persons who are entitled to receive notice at least 5 business days before the meeting (Insolvency Practice Schedule, section 90-35(2)). [...]  READ MORE →

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Judgment Debts – The Consequences for a Judgment Debtor

By Jamieson Naylor, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

Becoming a judgment debtor, that is, having a judgment entered against you, can be quite an unsettling notion. However, judgment debtors should resist the urge to ignore a judgment creditor. There are a number of options open to a judgment debtor and it is important that judgment debtors should take steps to deal with a judgment debt as soon as possible. If a court or tribunal has entered judgment in favour of a judgment creditor, then the judgment creditor can enforce that judgment against a person known as a “judgment debtor”. The person with the benefit of the judgment is known as a “judgment creditor”. [...]  READ MORE →

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Debt Recovery – Obtaining Admission from Debtors

OBTAINING ADMISSION FROM DEBTORS

Creditors are frequently frustrated with the time it can take to prosecute defended debt recovery proceedings in court.

Debt recovery proceedings can take somewhere usually between 6 to 24 months before obtaining a judgment against the debtor. However, in the recent case of Mary Antoinette Aviani v Jennifer Loh [2022] NSWSC 658 a creditor was able to obtain a judgment much earlier on in the debt recovery proceedings based on admissions the debtor conceded at an interlocutory hearing.

De facto partners were in a dispute regarding contributions towards the purchase of jointly owned property. The Plaintiff sought and obtained an injunction against the Defendant restraining property dealings. The matter next came before Kunc J where the injunction was modified. The Defendant required access to funds to conclude a property purchase. [...]  READ MORE →

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Filing Fee Rise!

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

There has been a minimal increase in the costs associated with filing documents in the State’s Courts over the past 3 years whilst the country was dealing with the financial ramifications of COVID-19. However, a rise has been imminent.

The NSW Attorney-General has now considered the costs associated with commencing and running proceedings within the Courts of New South Wales and upon evaluating such costs has enacted the Civil Procedure Amendment (Fees) Regulation 2022 (NSW). [...]  READ MORE →

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Collecting Money: Which court should I pick?

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

When collecting money from a debtor in NSW, it is important to ensure that you are collecting money in the right court.

  • Collecting money under $20,000 – When collecting money which is under $20,000, debt collection proceedings should be commenced in the Small Claims Division of the Local Court of NSW.
  • Collecting money over $20,000 but under $100,000 – When collecting money which is over $20,000 but under $100,000, debt collection proceedings should be commenced in the General Division of the Local Court of NSW. However, there are some circumstances where collecting money up to $120,000 can be done in the Local Court, although you will normally need the consent of the debtor.
  • Collecting money over $100,000 but under $750,000 – When collecting money which is over $100,000 but under $750,000, debt collection proceedings should be commenced in the District Court of NSW. However, like the Local Court, the District Court can hear debt collection matters up to $1,125,000, provided no party objects to the matter being heard in the District Court.
  • Collecting money over $750,000 – When collecting money over $750,000, debt recovery proceedings should generally be commenced in the Supreme Court of NSW.

What happens if you are collecting money by debt collection proceedings in the wrong court?

If you are collecting money in the Supreme Court and you obtain a judgment for less than $500,000, you may not be able to recover costs from the debtor, unless the Supreme Court is satisfied that commencing debt collection proceedings in the Supreme Court was warranted. [...]  READ MORE →

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KNOWING YOUR LIMITATIONS

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Has the COVID-19 pandemic affected your approach to debt collection? Have you deferred debt collection, or accepted payment arrangements on matters which you would have previously sent for debt collection? The last few years have certainly tested the limits of creditors’ willingness to defer debt collection. However with debt collection generosity comes the very real risk that some amounts may no longer be available for debt collection. When considering leniency with your debt collection, it is important to know your limitations. [...]  READ MORE →

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Overdue payment – lawyer or Debt Collector?

By Jodie Rodrigues, solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

So you’ve found an outstanding invoice. Sure, all invoices are valuable to a business but now you’re considering whether there is any commercial benefit to asking a lawyer to chase the debt. There are real advantages in using a lawyer rather than a debt collector to assist with collection of your debts. There are three main questions you should ask when considering which invoices to chase through legal proceedings: [...]  READ MORE →

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A DEBT COLLECTION AGENCY VERSUS A DEBT COLLECTION LAWYER

By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

The debt collection process is one which causes a lot of hesitation and frustration which can lead to a misunderstanding of what the key differences are between a debt collection agency and a debt collection lawyer.

Some creditors choose to handle such matters on their own whilst others choose to engage with a debt collection agency at first instance. That being said, engaging with a debt collection lawyer is a step which many avoid due to some misconceptions of how lawyers deal with the debt recovery process and by the same token, engaging a lawyer can seem daunting. [...]  READ MORE →