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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 →

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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 →

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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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Is Payment of the Debt Guaranteed? The Answer Is Not Always Straightforward…

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

The concept is simple enough: your terms of trade contain a section to be completed and signed by a person who agrees to personally guarantee all debts of your customer. If the customer can’t or won’t pay, you can turn to the guarantor for payment.

The guarantee is a tried and trusted part of the debt collection strategy for many businesses.

Far too often, we see instances where claims for payment made against guarantors run into serious trouble. [...]  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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Proposed Changes to Credit Reporting Before Senate: Will it impact debt recovery?

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

The Commonwealth government has introduced the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018 (“the Bill“), which is currently before the Senate.

If passed, the Bill will require the four major banks (Westpac, Commonwealth Bank of Australia, National Australia Bank and Australia and New Zealand Banking Group) to supply their comprehensive credit information to credit reporting agencies, which will include information regarding customers that have been involved in a debt recovery process. The banks will also be required to keep the information they supply, accurate, complete and up to date, on all existing and new accounts. [...]  READ MORE →

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How to serve a statutory demand

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

In earlier articles, we highlighted the problems that arise when serving a Creditor’s Statutory Demand by post: see You’ve been served! and It Serves You Right?.

This issue reared its head again two weeks ago in winding up proceedings in the Supreme Court of NSW in which we acted for the creditor. The Court was satisfied with all but one element of the evidence required to make the winding up order. The Court did not accept that the statutory demand had been properly posted (even though there was evidence of postage). [...]  READ MORE →

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When is an old debt too old to collect?

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

Sometimes, we are all a bit guilty of putting some of the more difficult to collect debts in the ‘too hard basket’ for too long. For so long that they become an ‘old debt’. But how long can you leave an old debt before it’s too late to collect? And the old debt becomes ‘statute barred’?

For debts in NSW, the clock generally starts running for a period of 6 years from the date the cause of action first accrues (e.g. the date of default). After the expiry of this 6 year period, the legislation restricts you from recovering the debt and it becomes ‘stature barred’. [...]  READ MORE →

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When its better to get something than nothing, the use of Payment Arrangements in recovering your debt.

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

When looking to recover funds from a Debtor there are numerous ways in which it can be recovered. All of those options should be canvassed and considered carefully. One of those options is an agreed payment arrangement.

Benefits of entering into a payment arrangement include the ability to receive regular periodic payments of funds from the Debtor as well as the ability to monitor the Debtor for any changes in their financial situation. In setting a frequent payment schedule such as weekly or fortnightly, any sudden changes in the Debtor’s financial situation such as the Debtor going into Bankruptcy or the Debtor Company going into external administration can be found out and acted upon quickly. An obvious disadvantage of entering into a payment arrangement is that depending on the amount of the debt owing, it can take some time for the outstanding debt to be paid in full. [...]  READ MORE →

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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 →