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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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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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“Spooked” investors is not reason enough to change the ASIC register (even in the Halloween season)

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

A recent application to remove notification of a winding up application, recorded on the ASIC register, has been dismissed in the NSW Supreme Court.

Playup Australia Pty Limited (“Playup”) received a statutory demand from a creditor Ryan Kay (“Kay”).  Playup failed to comply with the demand and Kay filed an application to have Playup wound up.  Kay lodged notification of his application on the database maintained by ASIC, in accordance with standard procedure. [...]  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 →

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Can you serve legal documents by Facebook?

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

Yes, it is possible to serve documents via Facebook. In an earlier blog “Serving debtors that don’t want to be found“, we discussed how legal documents can be served by substituted service. Service via Facebook, LinkedIn and Instagram are some of the many methods legal documents can be served by substituted service.

In possibly a world first in 2008, the ACT Supreme Court granted orders for substituted service for the police to serve legal documents via a private message on Facebook. Since then, there have been many occasions in which the courts have allowed legal documents to be served via Facebook. You might even remember that in 2012, the District Court of NSW allowed for legal documents to be served on the rapper Flo Rida via his official Facebook page. Those orders for service via Facebook were ultimately overturned on appeal because, among other reasons, the evidence did not show that Facebook page through which the documents were served was actually the Facebook page of Flo Rida. [...]  READ MORE →

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Serving debtors who don’t want to be found

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

In an earlier blog “When is an old debt too old to collect“, we discussed how some of the more difficult to collect debts are often placed in the ‘too hard basket’. An all too common reason that these debts are in the ‘too hard basket’ is because you can’t find the debtor. They’ve moved address and you can’t find them to be able to serve them with legal documents. However, this is not the end! [...]  READ MORE →

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I Object!: The Importance of Strict Compliance with the Notice of Objection Regime

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

In the recent decision of Jones and Inspector-general in Bankruptcy [2018] AATA 3260 (“Jones”), the Administrative Appeals Tribunal has made it clear that a trustee in bankruptcy who files a notice of objection to discharge, needs to comply strictly with the requirements of the s 149D(1) of the Bankruptcy Act 1966 (Cth) (“the Act”), otherwise it is likely that the decision will be cancelled on review, either by the Inspector-General in Bankruptcy or the Tribunal. [...]  READ MORE →