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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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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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THE DEBT RECOVERY PROCESS

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

Obtaining a judgment is a goal in the debt recovery process. Debt collection is not easy and the Court Rules make provision for collecting money but it’s not a one way street.

Judgments in New South Wales can generally be entered by a Court in three ways:

– by default;
– by consent; or
– by Order.

A default judgment is entered following the service of a Statement of Claim and non-compliance by the defendant. If after 28 days elapses and no payment is received and no Defence is filed, the creditor can then file at the Court an affidavit confirming the Claim was served and an application for judgment. Upon processing the application, if the Court accepts the Claim was served and that the debt remains unpaid, it will then enter judgment for the creditor as at a nominated date and amount. [...]  READ MORE →