No Comments

Debt Recovery: Who Do I Sue?

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

A fundamental of any relationship is knowing who you are dealing with. This goes especially for business relationships where dealing with the correct customer may make the difference between getting paid, and missing out.

Your customer is not generally the purchasing clerk who rings up to order your goods or the foreman who requests your services on site. However, even more importantly, the customer is not a business name! Rather, this business name will normally be owned by, or used by, a legal entity. It is of the most fundamental importance in business that you properly understand the legal entity with whom you are dealing. This may be a corporation, partnership or sole trader. In addition, entities trading on behalf of others, for instance trustees, add another layer of complexity to business relationships, and to debt collection. [...]  READ MORE →

No Comments

When Should I Send A Letter of Demand?

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

The key to any business’ success is a strong relationship with its customers. But what happens when you supply the goods or services and the payment is not forthcoming? A relationship can quickly be eroded when the question of money is raised.

Internal Debt Recovery Process

Every business should have a clearly defined debt recovery process so that the debt collection team know when certain actions are to be taken against wayward customers who default on payment. This should ideally consist of two processes – an internal and an external process. [...]  READ MORE →

No Comments

Company Records? I could tell you, but I would have to go to gaol… ?

By Chloe Howard of Matthews Folbigg Lawyers, a lawyer in our Insolvency, Restructuring and Debt Recovery Group

A company is presumed to be insolvent if it fails to keep proper financial records (section 588E(4) of the Corporations Act 2001 (Cth)).

But what if you have the records, but providing them might send you to gaol?

This issue was recently discussed in the matter of Substance Technologies Pty Ltd [2019] NSWSC 612.

In this matter, the director refused to respond to a liquidator’s repeated requests for the company’s financial records because he said the records might contain incriminating material.  He couldn’t be certain but “would suspect there could well be.” (at [42]) [...]  READ MORE →

No Comments

Creditor’s statutory demand issued pending negotiations is upheld

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

In a recent matter which we acted for the Defendant (In the matter of Precise Training Pty Ltd [2018] NSWSC 1383), we successfully defended an application to set aside a creditor’s statutory demand issued by the Chief Commissioner of State Revenue (“the Commissioner“) against Precise Training Pty Ltd, the Plaintiff.

Facts

The Commissioner issued a number of assessments for payroll tax to Precise Training in 2015 as a member of a larger tax group. Precise Training disputed the assessments and lodged an objection on 10 December 2015. The Commissioner disallowed the objection and proceeded to enter into negotiations for payment of the assessments. [...]  READ MORE →

No Comments

Not opening your emails? That is not an excuse to avoid valid service!

By Chloe Howard of Matthews Folbigg Lawyers, a lawyer in our Insolvency, Restructuring and Debt Recovery Group

A recent Supreme Court matter has determined that service of an application to set aside a statutory demand was validly served in time, even though the solicitor in question did not open the email serving the application until the expiration date for service had passed.

In March 2019, the plaintiff’s solicitor and the defendant’s solicitor commenced communicating in an attempt to facilitate a resolution of the dispute between their respective clients. The communications predominantly took place by email. [...]  READ MORE →

No Comments

DEBTOR’S PETITION OVERHAUL – JANUARY 2020

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

An individual overwhelmed by debt (“the Debtor”) may seek the protection of the Bankruptcy Act 1966 (Cth) (“the Act”) and file a Debtor’s Petition.

Section 55 of the Act provides that an individual may present to the Official Receiver a petition against himself/herself in the approved form and accompanied by a Statement of Affairs which provides details of the person and sets out the person’s financial affairs. [...]  READ MORE →

No Comments

One Year Bankruptcies – Dead in the Water?

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

Legislation introduced to Federal Parliament prior to the 2019 election would have seen the introduction of a 12 month term for bankruptcy, replacing the current three year term.

The move prompted some interesting debate, and a fair degree of controversy.  Most people in the industry that we have spoken to were against it, for all sorts of different reasons.

In any event, the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 has lapsed.  It cannot be revived or reinstated.  Should there be any renewed interest in Canberra  to introduce one-year bankruptcy, a brand new bill will need to be introduced and moved through the various stages to become law. [...]  READ MORE →

No Comments

Preventing a Service Fail – A Tale of Email v. Snail Mail?

In one of our recent matters, a client instructed us to bring winding up proceedings against four companies with the same sole director. The total debt across the four companies was over $300,000.00. Whilst there were four applications before the Court, one common issue was whether the companies had been properly served with the statutory demands relating to the debt owed.

On 11 April 2019, statutory demands were sent to all four companies, with the demands posted to the registered offices of the defendants according to the records of ASIC. Unbeknownst to the creditor, the director had vacated the registered premises of two of the companies over a year earlier, but had failed to update ASIC’s records in respect of this change, and had not put in place a mail-forwarding system. The demands addressed to the other two companies were sent to the office of the director’s solicitor. [...]  READ MORE →

No Comments

Subpoena or Notice to Produce – how to get the documents you need!

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

Have you ever wondered about the difference between a subpoena and a notice to produce? These can be confusing and sometimes cause delays in proceedings or result in significant additional legal costs.

Both a subpoena and a notice to produce are court forms used once proceedings have been commenced, to obtain documentation from a specific individual or entity. A subpoena can also be issued to require a witness to attend Court and give evidence at a hearing. [...]  READ MORE →

No Comments

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 →

No Comments

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 →

No Comments

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 →