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Calderbank Offers – What You Need to Know

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

In our earlier post about settlement negotiations “Agreement in principle” – is it binding?“, we discussed the an offer that was agreed to “in principle” and what that means.  The offer that we talked about was a Calderbank offer.

What is it?

A Calderbank offer is a type of settlement offer designed to put the offeror in a position to ask the court to make an indemnity costs order, if the offerer succeeds in the litigation beyond the amount offered. An indemnity costs order is an order that the less successful party pay a larger portion of the other party’s costs. Normally ‘costs follow the event’ – which means that an unsuccessful party  will be ordered to pay the successful party’s costs of litigation. However normally, because of the way the costs assessment process works, only a portion of the successful party’s actual costs will be recoverable. However by making a Calderbank offer, a party to litigation can improve the chances of recovering a significantly higher proportion of those costs. These offers are based on the principles outlined in the English case of Calderbank v Calderbank [1975] 3 All ER 333. [...]  READ MORE →

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Garnishee Orders – 5 things to know.

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

In a previous blog, which can be found here, we explained the advantages and disadvantages of using Garnishee Orders to recover money from a Judgement Debtor.

Here are 5 things you may not have known about Garnishee Orders:

  1. There is no filing fee on a Garnishee Order.

The process of issuing a Garnishee Order against a Garnishee is a quick and inexpensive process.

  1. You can issue a Garnishee Order with limited information about your Judgment Debtor.

An advantage of Garnishee Orders is that you don’t need a lot of information in order to use the garnishing process. In most cases, the name of the debtor is all that is required, however the more information that is provided the quicker the process will be. [...]  READ MORE →

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“Agreement in principle” – is it binding?

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

When you’re negotiating the terms of a contract, settlement or payment arrangement, you might hear the term “agreement in principle”.  The obvious questions are:

  1. What does it mean?
  2. If you agree “in principle” to a person’s offer, or that person agrees “in principle” to your offer, can the agreement be enforced?

These are questions that are considered in numerous cases and various situations. The Courts have historically considered such cases in the context of different categories of agreement based on the decision in Masters v. Cameron. Recently the Supreme Court of New South Wales looked at these questions again in the matter of P J Leahy & Ors v A R Hill & Anor [2018] NSWSC 6. In this matter, Mr Leahy (and his related parties) commenced proceedings against Mr and Mrs Hill to recover an amount he claimed was due for repairs to a shed and arrears under a licence agreement. [...]  READ MORE →

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DEBT COLLECTION BY THE MERE FACT …

Debt collection commentary by Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

Following on from our article on the Safe Harbour provisions recently introduced, Credit Managers should be also be aware of the proposed additions to the Corporations Act 2001 (“the Act”) that attempt to create a further reforms for companies in financial stress.

The reforms are known as the “ipso facto” provisions. Don’t let the Latin term confuse you as it simply means “by the mere fact”. [...]  READ MORE →

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CREDITORS AND THE INSOLVENCY LAW REFORM ACT 2016

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

As the 2017 year draws to a close, creditors would be aware that both instalments of the Insolvency Law Reform Act 2016 (“the ILRA”) have come to pass.

What should creditors be aware of under the new regime?

The ILRA is an attempt to reform the insolvency law but also to provide an improvement in the confidence of the public in the overall performance of the trustees and liquidators appointed to the various estates and administrations that are commenced every day. [...]  READ MORE →

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Signing on the dotted line: making sure you bind your customer to a contract.

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

We all know the importance of getting a customer “signed up”. But how do you know that the person signing a supply agreement on behalf of a potential customer has authority to do so, and does it even matter if that person does not have authority?

This issue commonly arises when we advise clients on credit collection policies and when we work with sales teams on how to cut down on errors at the point where a sales lead becomes a customer. These errors can have catastrophic effects when seeking to chase a customer who has become a bad debt. [...]  READ MORE →

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Guaranteed Win?

By Bonnie McMahon Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

Guarantees are a vital part of any credit agreement, however enforcing them is often a major headache for creditors, especially when collecting money. It is often the case that guarantors will argue that a guarantee is invalid or was never incorporated into the credit agreement: see Singh v De Castro; Dhaliwal v De Castro; Brar v De Castro [2017] NSWCA 241 (“Singh”).

So how can debt collectors avoid guarantors trying to get around a guarantee when they are trying to recover a debt? The simple answer is by foreseeing the issues which may arise in respect of a guarantee and eliminating them now. [...]  READ MORE →

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Collecting Money: Which Court?

By Bonnie McMahon Solicitor of Matthews Folbigg, in our Insolvency, Restructuring and Debt Recovery Group.

When commencing debt recovery proceedings against a debtor, it is important to ensure that you are commencing proceedings in the right court. –

Collecting money under $10,000 – Debt collection proceedings to recover a debt under $10,000 should be commenced in the Small Claims Division of the Local Court of NSW.

Collecting money under $100,000 – Debt collection proceedings to recover a debt under $100,000 should be commenced in the General Division of the Local Court of NSW. However, there are circumstances where a debt up to $120,000 can be heard by the Local Court, although you will normally need the consent of the debtor. [...]  READ MORE →

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Recovering money from the right debtor

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

One of the biggest mistakes companies or individuals make when attempting to recover a debt is going after the wrong debtor. Although a credit application has been completed in its entirety that does not mean the credit application is enforceable or even contains the correct information in order to recover a debt from a customer.

To ensure that you are seeking payment from the correct customer, debt collection processes should be put in place to protect your entity from providing goods to customers who will inevitably default in payment and be unable to recover payment for such goods. [...]  READ MORE →

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When is a letter Delivered?

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

A letter can be posted today and yet be received by the recipient on any number of days thereafter due to various issues that impact on the process between sender and recipient. The Government has attempted to regulate a standard time frame for receipt by various statutory measures to assist to work out the delivery time … but has it?

The need in legal circles to be precise about the date of receipt of a letter became instantly necessary when the High Court of Australia in David Grant and Co Pty Ltd v Westpac Banking Corporation [1995] 184 CLR 265 held unanimously that the time limit of 21 days after service set for the setting aside of a Creditor’s Statutory Demand (“Demand”) was 21 days, a number not to be fudged by any external factors. [...]  READ MORE →

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DEBT RECOVERY – BANKRUPTCY ENFORCEMENT

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

Obtaining a judgment from the Court is the first step in the debt collection process.  Enforcement is the next step but which option is going to recover that debt.

One option is to proceed with an application to have the individual declared bankrupt.  In an effort to avoid bankruptcy, the individual will have to pay the judgment debt or make other arrangements satisfactory to the creditor. [...]  READ MORE →

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DEBT RECOVERY – ENFORCEMENT BY WINDING UP

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

A debt is due to you by a company and your internal debt recovery methods have failed as they won’t pay!!  What’s next for you to collect those unpaid invoices?

The Corporations Act 2001 (“the Act”) provides for a company owing money to be wound up and a liquidator appointed to recover the assets of the company and distribute them to all creditors of the company.  The winding up process is a strong debt collection tool for unpaid creditors. [...]  READ MORE →