Commercial Litigation, Debt Recovery & Insolvency

Commercial Litigation

Commercial Litigation

How to Draft an Adjudication Response in Queensland

By //  by 

How to Draft an Adjudication Response in QueenslandIf you want to know how to draft and serve an adjudication response, then this article will provide you with useful information.

If you have been served with an adjudication application in Queensland, then you need to file and serve an adjudication response.

A respondent will need to do the following:

  1. Identify the eligibility to give an adjudication response;
  2. Immediately confirm the critical dates for submitting the response;
  3. Understand how and where to submit the adjudication response;
  4. Confirm if there are any jurisdictional issues which will need to be considered;
  5. Understand if the payment claim includes items not allowed to be claimed;
  6. Understand what is and is not allowed to be included in the adjudication response.
  7. Prepare detailed submissions and evidence to support the payment schedule; and
  8. Understand how to serve the adjudication response before time runs out.

If the respondent does not act within the required time, then the adjudicator may decide in favour of the claimant.

The claimant may then register the adjudication certificate and enforce the decision as if it were a judgment of the Court.

It is vital that you act quickly to draft and serve an adjudication response.  To ensure that you give yourself the best chance, you should contact a lawyer immediately

DEDICATED TEAM – COMMERCIALLY FOCUSED – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Eligibility to give an Adjudication Response

A condition precedent for eligibility to respond to an adjudication application if the giving of a payment schedule after being given a payment claim.

Section 82(2) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“BIFA”) says:

… The respondent must not give an adjudication response if the respondent failed to give the claimant a payment schedule as required under section 76.

If a respondent did not give a payment schedule in answer to the payment claim, then a respondent will not be entitled to give an adjudication response.

What is an Adjudication Response?

Section 82(1) of BIFA says:

After being given notice of an adjudicator’s acceptance of an adjudication application under section 81, the respondent may give the adjudicator a response to the adjudication application (the “adjudication response”).

So, an adjudication response is a response to the adjudication application.

There are a number of things to consider when drafting and serving an adjudication response, namely:

  1. Identify the critical dates; and
  2. Know how to give the adjudication response;
  3. Consider what can be included in the response and what cannot;
  4. Consider any jurisdictional issues;
  5. Prepare submissions;
  6. Collate all of the evidence required; and
  7. Submit and serve the adjudication response in the correct time.

These issues will be explained in more detail below.

Identify the Critical Dates

There are strict timeframes in which to file an adjudication response.

The adjudication response must be given to the adjudicator the later of 10 business days after receiving the application; or 7 business days after receiving the adjudicators acceptance.

For a complex claim, 15 business days or 12 business days respectively.

Section 83 of BIFA says:

(1) If responding to a standard payment claim, the respondent must give the adjudicator the adjudication response within the later of the following periods to end—

(a) 10 business days after receiving a copy of the adjudication application;

(b) 7 business days after receiving notice of the adjudicator’s acceptance of the adjudication application.

(2) If responding to a complex payment claim, the respondent must give the adjudicator the adjudication response within the later of the following to end—

(a) 15 business days after receiving a copy of the adjudication application;

(b) 12 business days after receiving notice of the adjudicator’s acceptance of the adjudication application.

What does it mean to “Receive” the Documents?

The time starts running from the date of “receiving” the above documents.  But what does “receiving” mean in this context?

In CMF Projects Pty Ltd v Masic Pty Ltd & Ors [2014] QSC 209 Daubney J said at [25]:

… there is a distinction in BCIPA (now BIFA) between the notions of “service” and “receipt” of documents. The word “receive” … has been considered on numerous occasions … That subsection relevantly provides that an adjudication application must be made “within 10 business days after the claimant receives the payment schedule”. It seems now to be clear enough on the authorities that the word “receive” connotes that, whilst the document in question need not come to the attention of a particular person within the relevant office, it nevertheless does actually need to have arrived at, and thereby been received’, at the recipient’s registered office, or place of business, and be there during normal office hours.

So, the time for the adjudication response starts running from the time that the above documents arrived at the recipient’s registered office, or place of business, and be there during normal office hours.

Care should be taken when assessing the time the document was delivered and the time it was received.

For example, it could have been delivered yesterday afternoon, but only retrieved from the post box today.

The Form of the Adjudication Response

Section 82(3) of BIFA says:

The adjudication response—

(a) must be in writing; and

(b) must identify the adjudication application to which it relates; and

(c) may include the submissions relevant to the response the respondent chooses to include.

However, the respondent is restricted to only include reasons that were included in the payment schedule.

Failure to articulate reasons in the schedule may mean that the respondent will be unable to include them in the adjudication response.

Section 82(4) of BIFA says:

However, the adjudication response must not include any reasons (“new reasons”) for withholding payment that were not included in the payment schedule when given to the claimant.

What are “new reasons”?

In John Holland Pty Ltd v Walz Marine Services Pty Ltd & Ors [2011] QSC 39 Margaret Wilson J said at [27]:

… the issues to be decided by the adjudicator are defined in the payment claim and the payment schedule. The respondent must state its reasons for wholly or partially withholding payment in the payment schedule. While the parties may make submissions in support of their respective positions in the adjudication application and the adjudication response respectively, the respondent cannot use the adjudication response as a vehicle to advance reasons for withholding payment which it failed to include in its payment schedule.

There are a number of cases on this point and it has been enforced reasonably strictly to prevent unfairness.

In Wiggins Island Coal Export Terminal Pty Ltd v Monadelphous Engineering Pty Ltd & Ors [2015] QSC 307 Philip McMurdo J said at [55]:

The evident intent of [the section] is to prevent the unfairness to a claimant which could follow from a respondent being allowed to contest its alleged liability for a reason which it had not advanced ahead of the adjudication application.

However, an adjudication response can do more than simply mirror the payment schedule.

In Tqm v Dasein [2004] NSWSC 1216 McDougall J said at [30]:

… it would be open to a respondent to argue, either in greater detail or with perhaps more supporting evidence, reasons that had been advanced. If it were intended that an adjudication response should do no more than mirror, word for word, a payment schedule, then there is little point to the ability … for a respondent to lodge an adjudication response.

So, an adjudication cannot raise new issues, but can elaborate, provide greater detail, and provide supporting evidence to support the reasons contained in the payment schedule.

What can be Included in the Response

The adjudication response can include the following (amongst others):

  1. An expert report supporting the respondent’s payment schedule;
  2. Particulars and evidence (statutory declarations) in support of the submissions;
  3. Particulars and evidence in relation to why the payment (or part of the payment) was withheld, (including offsetting claims);
  4. Particulars and evidence identifying any non-contractual matters raised in the payment claim that should not be taken into account by the adjudicator; and
  5. Particulars and evidence bringing attention to any jurisdictional issues.

An adjudication response can include information in relation to jurisdictional issues not contained in the payment schedule.

Jurisdictional Issues for Adjudication Response

The adjudication response can ask the adjudicator to consider the statutory requirements of BIFA, the payment claim and the adjudication application, namely:

  1. Identify the reference date to which the payment claim applies;
  2. Identify if the claim relates to an applicable construction contract;
  3. Identify if the payment claim is valid;
  4. Correct identification of the construction work and/or related goods or services; and
  5. Have all of the time limits been correctly complied with.

If any of the above can be answered in the negative, then the adjudicator may not have jurisdiction to decide the claim.

Once all of the arguments and any jurisdictional issues have been identified; the respondent has prepared their Adjudication Response Submissions and collated all of their evidence, it is time to submit the adjudication response.

How to give the Adjudication Response

An adjudication response in Queensland must be submitted to the adjudicator within the timeframe above, and a copy of the response given to the claimant within two (2) business days.

The adjudicator is appointed by the Registrar and will have provided a copy of the adjudicator’s acceptance of the adjudication application, including contact details.

Once the adjudication response is given to the adjudicator, the response must be given to the claimant within two (2) business days.

Section 83(6) of BIFA says:

If the respondent gives the adjudicator an adjudication response under this section, the respondent must give a copy of the response to the claimant not more than 2 business days after giving the response to the adjudicator.

Service of the Adjudication Response

Section 102(1) of BIFA says:

A notice or other document that, under this chapter, is authorised or required to be given to a person may be given to the person in the way, if any, provided under the relevant construction contract.

Service is not limited to provisions of the construction contract however, section 39(1) of the Acts Interpretation Act 1954 (CTH) also applies to service of an adjudication response, which says:

If an Act requires or permits a document to be served on a person, the document may be served—

(a) on an individual—

(i) by delivering it to the person personally; or

(ii) by leaving it at, or by sending it by post, telex, facsimile or similar facility to, the address of the place of residence or business of the person last known to the person serving the document; or

(b) on a body corporate – by leaving it at, or sending it by post, telex, facsimile or similar facility to, the head office, a registered office or a principal office of the body corporate.

The expression “similar facility” has been held to mean email.  In Penfold Projects Pty Ltd v Securcorp Limited [2011] QDC 77 Irwin DCJ said at [232]:

In my view in context, “or similar facility” is wide enough to extend to email. As such I consider s 103(2) of the BCIPA envisages email service of notices

So, the same principles would apply as in CMF Projects Pty Ltd v Masic Pty Ltd & Ors [2014] QSC 209 in that the adjudication response should be given to the claimant at the claimants registered office, or place of business, or place of residence, and be there during normal office hours.

A Respondent might also consider personal service and facsimile or email too, if the files are not too large.

Once served, the adjudicator can do a number of things.

Adjudication Procedures

Once the adjudication response is given to the adjudicator and served on the claimant, the adjudication can do a number of things, namely:

  1. Ask for further written submissions;
  2. Call for a conference between the parties; and
  3. Carry out an inspection of any matter to which the claim relates.

If the adjudicator does not do any of the above, or request an extension of time, then they will need to decide.

The Adjudication Decision

The adjudicator must decide:

  1. Whether they have jurisdiction and whether the application is frivolous or vexatious;
  2. The amount of the progress payment, if any, to be paid by the respondent to the claimant;
  3. The date on which any amount became or becomes payable;
  4. The rate of interest payable on any amount; and
  5. The fee and the percentage that each party is required to pay.

Further, the adjudicator’s decision must:

  1. Be in writing; and
  2. Include the reasons for the decision.

The adjudicator must decide the above within a strict timeframe.

Time Limits for Making the Adjudication Decision

The adjudicator must decide the adjudication in either 10 business days, or 15 business days for a complex claim.

Section 85(1) of BIFA says:

(1) Subject to section 86, an adjudicator must decide an adjudication application no later than—

(a) for a standard payment claim—10 business days after the response date; or

(b) for a complex payment claim—15 business days after the response date.

The “response date” is the day on which the adjudicator receives the response; or (if no response is given) the last day on which the respondent could give the adjudicator an adjudication response.

Section 86 of BIFA says that the adjudicator can request an extension of time for deciding adjudication application.

However, the claimant and the respondent must agree in writing.

Upon payment of fees, the adjudicator will provide a copy of the decision and reasons to the Registrar, the claimant and the respondent.

What Happens Next?

If everything goes right, then the adjudicator will decide that the amount payable is the amount contained in the payment schedule.

A good building and construction debt recovery lawyer will give you the best chance to defend an adjudication application and defeat an unfair payment claim.

Further Reading

It is vital that you act quickly to draft and serve an adjudication response.  To ensure that you give yourself the best chance, you should contact a lawyer immediately

DEDICATED TEAM – COMMERCIALLY FOCUSED – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Wage Theft – Underpayment of Wages

By //  by 

Wage Theft and the Underpayment of Wages in Queensland lawyerWage theft is the non-payment of your legal entitlements by your employer, including award rates, penalty rates, wages, and overtime.

If your employer has stolen your wages then you may have a claim in the Federal Court, Federal Circuit Court, the District Court, or the Magistrates Court.

You can seek an order from your employer and also any person involved in the contravention.

There are processes that should be followed in different situations, and include negotiation, reporting to the Fair Work Ombudsman, mediation, conciliation, and filing a claim in Court.

This article will explain the requirements and the process of making a claim for wage theft below.

If you have not been paid your legal entitlements by your employer, including award rates, penalty rates, wages, and overtime – then you might have a wage theft claim against the employer

DEDICATED TEAM – COMMERCIALLY MINDED – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

What is Wage Theft?

The term wage theft can take a number of different forms, including:

  1. Not being paid the correct hourly rates;
  2. Illegal cash-back contracts;
  3. Being paid cash-in-hand or off-the-books;
  4. Non-agreed deductions from wages;
  5. Unpaid overtime and penalty rates;
  6. Illegal phoenixing;
  7. Sham contracting arrangements; and
  8. Non-payment superannuation.

We will detail these in more detail below.

Not Being Paid the Correct Hourly Rates

Probably the most common form of wage theft is not being paid the correct hourly rates.

For the most part, minimum hourly rates are prescribed by the relevant modern award.  If you are not being paid the correct amount, then your employer is stealing your wages and you will have a claim.

Modern awards include all the information you need to understand your entitlements including information in relation to:

  • Types of employment and termination of employment;
  • Classifications and minimum wage rates;
  • Hours of work and related matters;
  • Leave and public holidays; and
  • Industry specific provisions.

The modern award defines the type of work classification and the minimum pay amount in relation to that classification.

Another common form of wage theft is an employer paying an employee at a level 2 rate, when the employee is doing level 4 work.  If your employer is doing this then they are stealing your wages and you may have a claim.

Click to go to the list of Modern Awards here

Another way that an employer can steal an employee’s wages is by paying cash-in-hand.

Being Paid Cash-in-hand or Off-the-books

Although a seemingly good prospect, getting paid cash-in-hand or off-the-books can also result in wage theft.

Being paid cash-in-hand or off-the-books may mean that your employer is not paying superannuation, leave entitlements, and other entitlements, etc.

Also, because the non-payment of tax seems enticing, the employer may also pay you less than the minimum wage.

It is possible to be paid in cash, that’s not the problem, but the employer must still pay all of your entitlements and provide you with a payslip.

Being paid cash-in-hand or off-the-books can result in wage theft and you may have a claim.

Unpaid Overtime

Your Modern Award will provide for the amount of hours a full-time employee has to work per week and overtime rate of pay for hours worked outside of ordinary time.

These rates of pay are usually around 150% to 200% – aka time-and-a-half to double-time.

If your employer has not paid any overtime rates, then this is wage theft and you may have a claim.

Unpaid Penalty Rates

Also, your Modern Award will provide for the penalty rate that the employee is entitled for working on the weekend or on a public holiday.

These rates are usually between 125% to 250% – aka time-and-a-quarter to double-time-and-a-half.

If your employer has not paid any penalty rates, then this is wage theft and you may have a claim.

Find your penalty rate amount in your Modern Award here.

Illegal Cash-Back Schemes

In some instances, an employer may make an employee give back a percentage of their wages.  This is sometimes known as a “Cash-back scheme”.

If this happens, then that money is treated like back-pay and can be claimed from the employer.

If your employer is making an employee pay “cash-back” then this is wage theft and the employee may have a claim.

Non-Agreed Deductions from Wages

An employer and an employee can agree that certain deductions can be made from the employee’s wages.  An employer can only deduct money if:

  1. The employee agrees in writing; and
  2. It’s principally for the benefit of the employee; and
  3. It’s allowed by a law, a court order, the Fair Work Commission, a modern award, or registered agreement.

Any deductions that are not agreed or are not for the benefit of the employee are wage theft and the employee may have a claim.

Illegal Phoenixing

Phoenixing is a term used to describe the act of transferring business assets to another company, continuing to trade in the new company, and leaving debts and liabilities in the old company – including employee wages and entitlements.

Usually, the old company will go into liquidation with a very slim chance of getting any money.

If your employer does this then this is wage theft and the employee may have a claim.

An employee may be entitled to the Governments Fair Entitlements Guarantee (“FEG”).

Click to learn more about the FEG here.

Sham Contracting Arrangements

A sham contract is when an employer tries to disguise an employment relationship with a contractor relationship, and incorrectly classifies an employee as an independent contractor.

An employer may try to pay an employee as a contractor so that the employee will lose their entitlements, including superannuation and leave entitlements.

Whether someone is an employee, or a contractor depends on a number of different complex factors and is usually determined by the Court.

However, if an employee is a party to a sham contract then this may be wage theft and the employee may have a claim.

Non-payment of Superannuation

Unfortunately, another common form of theft (albeit, not wages per se) is the non-payment of superannuation.

Most employment relationships require the employer to contribute a minimum of 9.5% of your wages into a superannuation account.

Every dollar that goes into superannuation now will be worth a lot more by retirement age, so it is very important that an employer pays this entitlement.

If your employer has not paid, or underpaid, your superannuation then the employee may have a claim.

Can I Make a Claim for Wage Theft?

If you fit into any of the categories above, then it is likely that you will be able to make a claim against your employer for unpaid wages and entitlements.

Obviously, each claim is different and will depend on the particular work, the Modern Award, and the employment contract.

Making a Claim for Wage Theft

The starting point for any claim for wage theft is section 45 of the Fair Work Act 2009 (CTH) (“FWA”).

Section 45 of the FWA says:

A person must not contravene a term of a modern award

A modern award sets out the minimum employment terms and conditions.

These minimum employment terms and conditions include:

  1. Wages and pay;
  2. Employment allowances;
  3. Staff breaks – duration and time;
  4. The hours of work;
  5. Any overtime payable; and
  6. Any penalty rates payable.

Note: Section 45 of the FWA is a civil remedy provision.

Section 539 of the FWA outlines the Civil remedy provision, the person, the Courts, and the maximum penalty.

The table in subsection (2) of this section says that a breach of section 45 of the FWA applies to an employee and an employer (amongst others).

It also defines the Courts which have jurisdiction as the Federal Court; the Federal Circuit Court; and an eligible State or Territory court.

The Wage Theft Process

The process for making a wage theft claim for unpaid entitlements is:

  1. Work out exactly what the employee is owed;
  2. Try to negotiate with the employer to reach a settlement;
  3. Report the employer to the Fair Work Ombudsman (“FWO”);
  4. Commence legal action in the Court with jurisdiction;
  5. Sometimes the Court will order mediation or conciliation;
  6. Obtain a judgment against the employer;
  7. Enforce the judgment.

This is an over-simplification of the process, but this is essentially what an employee will need to do.

We will explain the process in more detail below.

Work out Exactly what the Employee is Owed

It is important to work out exactly how much money the employee is owed.

Correctly calculate the exact amount (or as reasonably close as possible).  This will include:

  1. The minimum rate of pay calculated at the correct level;
  2. Any allowances allowable;
  3. Any leave loading that has accrued;
  4. Any leave payments that have not been paid;
  5. Any overtime that has not been paid;
  6. Payment of the correct penalty rates;
  7. Any additional tax and superannuation; and
  8. Any entitlements in the award, employment contract or other agreement.

Once the employee has a figure calculated, it is best practice to approach the employer, or engage a solicitor to approach the employer, to attempt to reach a settlement.

Negotiate with the Employer to Reach a Settlement

Most good lawyers will attempt to resolve wage theft claims without going to Court.  Going to Court can be stressful and costly for both parties, so there is a real incentive to try to reach an agreement by negotiation.

Litigation lawyers are skilful negotiators, and it is well worth engaging a litigation lawyer to negotiate on your behalf.  Reaching a settlement will involve a compromise by both parties.

Read our article here about Settling Litigation Early.

If the employer is being unreasonable and refusing to settle, then the employee can refer the matter to the Fair Work Ombudsman (“FWO”).

Report this Employer to the Fair Work Ombudsman

The Fair Work Ombudsman is there to provide help and assistance in relation to:

  1. Wage theft – disputes relating to pay, penalty rates, any loadings and allowances;
  2. Ending employment – giving notice, employees final pay and redundancy packages;
  3. Leave entitlements including annual leave, sick leave, maternity leave and parental leave;
  4. Any sham contracting arrangements; and
  5. Anything covered by an award, enterprise agreement or other registered agreement.

The FWO will then attempt to resolve the dispute with the employer by negotiation in an attempt to reach a settlement.

If no settlement can be reached informally, then the FWO can refer the matter to a mediation.

A mediation is usually a telephone conference where the employee and the employer work with a skilled mediator to help the parties in dispute to come to a reasonable agreement to resolve the wage theft dispute.

This mediation can last up to two (2) hours.

If the parties agree on a resolution, then that agreement can be documented by way of a formal agreement.

The mediator may assist by drafting a deed of settlement outlining the terms of the agreement, time for compliance, and anything else of concern.

If the matter does not settle at the mediation, then the employee must take legal action to recover the unpaid wages.

Commence Legal Action in the Court with Jurisdiction

Legal action for wage theft can be broken down into two (2) separate parts, namely:

  1. Claims under $20,000.00; and
  2. Claims over $20,000.00.

Small Claims Under $20,000.00

A claim under $20,000 is called a small claim.

Section 548 of the Fair Work Act 2009 (CTH) (“FWA”) confers jurisdiction on the Magistrates Court or the Federal Circuit Court if it relates to an amount that an employer was required to pay to, or on behalf of, an employee; and it is for an amount of $20,000 or less.

There are advantages and disadvantages in commencing action in this small claims jurisdiction.

Basically, he court is not bound by any rules of evidence and procedure and may act in an informal manner; and without regard to legal forms and technicalities.  This makes the process easier.

However, a party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.  This means that if leave is not given, then the employee may have to appear on their own.

In Queensland this small claim in commenced in the Magistrates Court by way of Employment Claim. 

Queensland Industrial Relations Commission (QIRC) for a compulsory conciliation hearing in the first instance.

Once claim is filed, the Court will refer the matter to the Queensland Industrial Relations Commission (“QIRC”) for a compulsory conciliation hearing.  If the matter does not resolve by way of conciliation, then the proceeding will progress.

In the Federal Circuit Court a small claim is commenced by way of Form 5 – Small claim under the Fair Work Act 2009.

We strongly advise seeking legal advice before filing the small claim.

However, just because the amount is less than $20,000.00 that allows an employee to proceed as a small claim, but it does not compel an employee to.  An employee can commence as if it were a claim over $20,000.00.

Claims Over $20,000.00

Claims over $20,000.00 can be commenced in the Federal Court, the Federal Circuit Court, or an eligible State or Territory court.

Section 543(1) of the FWA says:

The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

Section 543(2) of the FWA says:

Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:

(a)  an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;

(b)  an order awarding compensation for loss that a person has suffered because of the contravention;

(c)  an order for reinstatement of a person.

Section 545(3) of the FWA says:

An eligible State or Territory court may order an employer to pay an amount to, or on behalf of, an employee of the employer if the court is satisfied that:

(a) the employer was required to pay the amount under the FWA or a fair work instrument; and

(b) the employer has contravened a civil remedy provision by failing to pay the amount.

Remember section 45 of the FWA is a civil remedy provision.

Therefore, the Federal Court, and the Federal Circuit Court have jurisdiction to make an order awarding compensation for loss that an employee has suffered because of the contravention of section 45 of the FWA, or the contravene of a term of a modern award.

Further, eligible Queensland State Courts also have jurisdiction to hear claims for wage theft and can make an order the employer to pay an amount to the employee for unpaid wages.

But what is an eligible State or Territory court?

Eligible State Courts for Wage Theft Claims

Section 12 of the FWA defines “eligible State or Territory court” to mean one of the following courts:

(a) a District, County or Local Court;

(b) a Magistrates Court;

So, for a proceeding for unpaid wages, the matter can be commenced as a general claim in the Magistrates Court and the District Court.

Jurisdiction of the State Courts

The State Courts have a monetary jurisdiction in the following amounts:

  1. The Magistrates Court – up to $150,000.00;
  2. The District Court – from $150,000.00 to $750,000.00.

It would not be usual for an employee to be owed more than $750,000.00 in stolen wages.

Is the Business Owner Liable for the Debts?

Yes.  The director of the company or the any person involved in the contravention can be personally liable for the contravention.

Section 550(1) of the FWA says:

A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

It then goes on to define what being “involved in a contravention” means.  Section 550(2) says:

A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)  has aided, abetted, counselled or procured the contravention; or

(b)  has induced the contravention, whether by threats or promises or otherwise; or

(c)  has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)  has conspired with others to effect the contravention.

In Fair Work Ombudsman v Quincolli Pty Ltd & Anor [2011] FMCA 139 Driver FM said:

The authorities show that in order for a person to have accessorial liability under … 550 of the Fair Work Act, he or she must be a knowing participant or in other words:

a. must have knowledge of the essential facts constituting the contravention;

b. must be knowingly concerned in the contravention;

c. must be an intentional participant in the contravention based on actual not constructive knowledge of the essential facts constituting the contravention – although constructive knowledge may be sufficient under s.728(2)(c) in cases of wilful blindness; and

d. need not know that the matters in question constituted a contravention.

So, if these things can be proven, then the employee may obtain judgment against the person (or people) involved in the contravention.

Once an employee commences legal action in the Courts against the company, the business, and against a person involved in the contravention, the objective is to obtain from the Court a judgment or enforceable money order against them.

Once you are given judgment, and the debtors still do not pay, you can enforce that order over the property of the enforcement debtors.

Enforce the Wage Theft Judgment

This website has a lot of information of enforcement.

If you have judgment on a company, then you can:

  1. Enforce with an enforcement warrant; or
  2. Serve a statutory demand.

If you have a judgment against a person, then you can:

  1. Enforce with an enforcement warrant; or
  2. Serve a bankruptcy notice.

Read the articles below in relation to enforcement of money orders.

Moving Forward – Wage Theft

Employees have a right to claim their wages for up to 6 years after the amount became due and payable.  This is the limitation period and it cannot be extended.

If you have a claim for wage theft, or unpaid entitlements then contact us today.

If you have not been paid your legal entitlements by your employer, including award rates, penalty rates, wages, and overtime – then you might have a wage theft claim against the employer

DEDICATED TEAM – COMMERCIALLY MINDED – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Legal Proceedings for Debt Recovery

By //  by 

legal proceedings for debt recovery in QueenslandLegal proceedings for debt recovery include:

  1. Trying to resolve the debt dispute without litigation;
  2. Starting legal proceedings for debt recovery;
  3. Obtaining a judgment or enforceable money order; and
  4. Enforcing that judgment over the property of the debtor.

However, debt recovery action in Court or QCAT should be a last resort.  Legal proceedings for debt recovery can be costly and time consuming.

But in a lot of cases when the debtor is being unreasonable then a creditor may have no option but to commence debt recovery action.

This article will explain the option available in debt recovery matters, alternative dispute resolution options, options for legal proceedings for debt recovery, enforcement options, and attempt to explain debt recovery law and debt recovery legislation available in Queensland.

If you need to start legal proceedings for debt recovery then it is important to get it right and you should contact a lawyer

DEDICATED TEAM – COMMERCIALLY MINDED – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

The Debt

The first thing to consider when thinking about legal action for debt recovery is the debt.

When commencing legal action for debt recovery, different rules and jurisdictions apply to different amounts of debt, which allow for different types of debt recovery action.

Jurisdiction

In Queensland, the jurisdiction of QCAT and the Courts are:

  1. Debts up to $25,000 – QCAT Minor Civil Disputes;
  2. Debts up to $150,000 – Magistrates Court;
  3. Debts from $150,000 to $750,000 – District Court; and
  4. Debts over $750,000 – Supreme Court.

Each of the above have both advantages and disadvantages, so it is important to speak to your lawyer before commencing legal action for debt recovery.

Legislation

Different industries have different pieces debt recovery legislation used for the recovery of debts and can be treated differently, for example:

  1. Building and construction debts – The Building Industry Fairness (Security of Payment) Act 2017 (QLD) can be used to issue payment claims and subcontractors’ charges.
  2. Body Corporate debts – The Body Corporate and Community Management Act 1997 (QLD) can be used along with whichever module your scheme falls under, to recover unpaid body corporate levies.
  3. Company Debts – The Corporations Act 2001 (CTH) can be used to recover debts from a company by issuing creditor’s statutory demands and winding up the company in insolvency.

Plus, there is other industry-specific legislation, so it important to ensure that you fully understand your rights and liabilities under debt recovery law in relation to debt recovery in certain industries.

The Contract

Next, the contract has some important factors to consider when thinking about legal proceedings for debt recovery.  Different contract clauses can make it easier to recover your debt, and also can help you to recover more costs and outlays.

Some good contract clauses include:

  1. Charging clauses or other security;
  2. Personal guarantees from directors;
  3. PPSA charging clauses; and
  4. Default terms clauses.

I will explain these in more detail below.

Charging Clauses or other Security

A charging clause in the contract requires the debtor to give security for the debt with an equitable interest in real property or land elevating the creditor to the status of a secured creditor.

A charge over property is essentially a guarantee that in the event of a default, the creditor’s equitable interest in the debtor’s real property is realised and the debtor can take steps to satisfy the debt as equitable mortgagee.

This charge is a charge over company property (if any) but can also be a charge over the director’s personal property.

Personal Guarantees from Directors

A personal guarantee from a director of the debtor company means that in the event of a default by the company, the director will be personally liable to pay the debt.

This clause is a must if you are offering credit to a corporate client for a number of reasons.

First, it means that if the company trades as a $2 shell and have no assets to satisfy your debt, then a creditor can attack the director’s personal assets.

You can also charge property with the Personal Property Securities Act 2009 (Cth) (“PPSA”)

PPSA Charging Clauses

The PPSA allows a creditor to charge (secure) the debt over the personal property of the debtor.  This is distinct from real property or land as mentioned above.

A secured creditor, secured with a charge over the personal property is allowed to seize collateral, by any method permitted by law, if the debtor is in default under the security agreement.

Typically, a car finance company will charge the car.  Then upon default of the finance agreement they are able to take possession of the vehicle.

Some challenges can arise from a PPSA charge, so it important to get your contract drafted correctly.

Default Terms Clauses

Lastly, some carefully drafted contract terms will allow you to recover more in costs and interest from the debtor.  Some good terms to consider are:

  1. Costs – Usually the costs of legal proceedings are scale costs and don’t cover the actual legal costs of debt recovery action.  However, carefully drafted clauses allowing for legal costs can allow a creditor to recover more costs in relation to debt recovery and collection.
  2. Interest – The legislative allowance for interest in Queensland is 4% above the cash rate at the Reserve Bank of Australia.  So, if the cash rate is 1.25% then you are only able to claim 5.25% interest.  An interest clause will allow you to recover more in interest in the event of a default.
  3. Liquidated Damages – in some instances you will be able to claim liquidated damages, meaning a daily fixed amount (say $50) for every day that the debtor is in default.  Care must be taken to ensure that this amount is a genuine pre-estimate od damages, and not a penalty for default.

If you need new or updated contract terms then contact us.

Once you have given thought to the parties, the debt, and the contract, you are now in a better position to commence legal proceedings for debt recovery.

Start Legal Proceedings for Debt Recovery

A typical debt recovery scenario should look something like this:

  1. Send a letter of demand;
  2. Try alternative dispute resolution;
  3. Debt recovery action in Court or QCAT;
  4. Enforcement of the judgment or money order.

We will explain this process in more detail below.

Letter of demand

In a lot of instances, a debt dispute can be resolved by a well-worded letter of demand.

A letter of demand should clearly identify the debt, outline the debtor’s obligation to pay, and clearly set-out the creditor’s rights according to debt recovery law.

Once a debtor realises that a lawyer is involved, and that they may have to pay thousands of extra dollars in legal costs and interest, then it may incentivise them to pay.

Read about letters of demand here – Letter of Demand

If a letter of demand doesn’t work, then another non-legal option would be to attempt alternative dispute resolution.

Alternative Dispute Resolution (ADR)

There are a number of different alternative dispute resolution methods, including:

  1. Negotiation with the debtor;
  2. Attending a mediation with the debtor;
  3. Attend an expert arbitration with the debtor;
  4. Determination by an expert;
  5. BIFA adjudication; and/or
  6. Conciliation

Each of the above can apply in different circumstances and may not be suitable for all debts.

We will explain in more detail below.

Negotiation

Although it sounds counter-intuitive, good litigation solicitors do all we can to not litigate unless we absolutely have to.

The first skill in ADR is trying to negotiate with the debtor or the debtor’s solicitor, in an attempt to reach a resolution without having to legal proceedings for debt recovery.

As with any negotiation we need to have leverage.  A good negotiator has ways of successfully getting leverage to increase the chances of a swift and just resolution to debt disputes.

Contact our lawyers to help and assist with negotiation payment of a debt.

If the negotiations break down, then the parties could agree to attend a mediation.

Mediation

A mediator is a third-party, usually a barrister, who guides the parties through a structured process in an attempt for the parties to reach a resolution.

The end result of a mediation is for the parties to sign a legally enforceable deed of settlement, which will outline the steps required by each party to finalise the dispute.

The deed will also include clauses upon breach by either party and will likely foreshadow debt recovery action upon default.

Attending a mediation can save considerable time, legal fees and court costs.

Arbitration

Arbitration is a type of ADR outside of the courts which allows the parties to obtain a legally binding decision.

Arbitration is only available in certain circumstances and in certain types of matter and is not available to all debt recovery or commercial disputes.  Further, the parties will have to agree to arbitration and agree to be bound by the decision.

Section 1 of the Commercial Arbitration Act 2013 (QLD) defines the types of disputes to include:

Relationships of a commercial nature include, but are not limited to, the following transactions – any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.

During the arbitration, the parties present their arguments and evidence to an independent arbitrator who essentially acts as a judge and creates a binding determination, called an award. 

Expert Determination

Similar to arbitration, expert determination is a process in which the parties in dispute agree to have their dispute determined by an independent third-party, or expert.

In most cases the expert is a person with technical experience, such as an engineer, construction expert, or accountant, etc.

Parties to disputed commercial contracts will sometimes include a clause requiring the parties in dispute to refer dispute to an expert for determination rather than going to Court.

Alternatively, the parties in dispute may agree to enter into a stand-alone expert determination agreement to save the expense and time of going to Court.

Again, the determination is binding on the parties.

BIFA Adjudication

If a dispute arises under the Building Industry Fairness (Security of Payment) Act 2017 (QLD) (“BIFA”) then BIFA has the option of having the building and construction dispute determined by an adjudicator.

A BIFA adjudication is a fast and cost-effective way of resolving building and construction disputes without resorting to the Court.

Once a decision has been made, the adjudicator will issue an adjudication certificate which can be registered in the Court and enforced as if it were a decision of that Court.

Time Limits

Very strict time limits apply to BIFA claims, so it is vital that you act now to protect your rights.

Read more about making payment claims – How to Make a BIFA Payment Claim

Read more about making adjudication applications – How to Make an Adjudication Application

Conciliation

Debt recovery claims for unpaid wages and entitlements may require the parties to attend a conciliation.

This process helps the parties in dispute to identify the salient issues and assists with identifying the terms of settlement in an attempt to reach a resolution.

The terms of the agreement are then recorded in a legally enforceable deed of settlement.

The conciliator does not act as a judge for the parties.

Get Help with Dispute Resolution

If you need help and assistance with any of the alternative dispute resolution processes above, then please get in touch with our solicitors.

Useful link to the Queensland Law Society – https://www.qls.com.au/For_the_community/Alternative_Dispute_Resolution

If the matter fails to resolve by way of ADR, then a creditor may have not any choice but to take legal action to recover the debt.

Legal Proceedings for Debt Recovery

The most common ways to start legal proceedings for debt recovery are:

  1. Commence debt recovery action in QCAT;
  2. Commence debt recovery action in the Court with jurisdiction;
  3. Serve the debtor company with a statutory demand.

We will explain these and the QCAT procedures & Court procedures in more detail below.

Commence Debt Recovery Action in QCAT

The Queensland Civil and Administrative Tribunal (“QCAT”) is essentially Queensland’s “small claims Court”.

QCAT is a no-costs jurisdiction, so you will not be able to claim your legal costs, save for a few legislated items except in exceptional circumstances, but this is at the discretion of the tribunal.

The pros of commencing proceedings in QCAT are:

  1. It is a lot less expensive than commencing in the Court;
  2. The process can be a lot quicker than the Court;
  3. QCAT is designed for self-represented people.

The cons of commencing proceedings in QCAT are:

  1. The minor debt jurisdiction is mostly a no costs jurisdiction. This means that you will not be able to recover your costs save for a few designated items;
  2. Legal representatives do not have an automatic right of appearance. This means that if you want us to appear at a QCAT hearing, you will need the leave of the tribunal, which is not always given.

QCAT has strict requirements in relation to what types of cases they hear, so I would need more information from you to be able to advise you if QCAT has jurisdiction.

QCAT Procedures

If a creditor is owed a debt of $25,000 or less, then they can apply to QCAT for minor civil dispute resolution.

Debt recovery action is started in QCAT by making an application for minor civil dispute.

After the application is served on the debtor, they have 28 days to file a response to a minor civil dispute.

If they don’t file a response, then the creditor can obtain a decision in default.

The QCAT member might also order that the matter proceed by way of mediation.  If the matter does not settle at the mediation, then the legal proceedings for debt recovery in QCAT will proceed to a hearing.

If you want to claim costs, or you require a more judicial process, then you can commence legal action in the Court with jurisdiction.

Commence Debt Recovery Action in the Court

We can commence legal action in the Court with jurisdiction.

An action for debt recovery is commenced by claim and statement of claim. The cause of action will usually be a breach of contract (amongst others).

Once a claim and statement of claim is filed and served on the debtor, they have 28 days to file and serve a defence.

If they do nothing, then we can make an application to the Court to get default judgment, which is a Court order ordering the defendant (debtor) to pay the claimed amount, being the outstanding fees, costs and interest at a rate of 4% above the RBA Cash Rate, from when the debt was due and payable.

Court Procedures

If the debtor does file a defence (and counterclaim – if any), then we will need to draft and serve a reply to the defence and an answer to the counterclaim (if needed).

Based upon the strength of the respective cases and evidence, the matter will likely resolve by negotiation, or by one party getting summary judgment.

It is unusual for a debt recovery matter to proceed all the way to a trial.

However, if both parties object to any resolution in the proceeding, then ultimately the matter will go to a trial for a Magistrate or Judge to decide.

If you have a debt owed by a company, then you might be able to serve a creditor’s statutory demand for payment.

Serve the Debtor Company with a Statutory Demand

If an insolvent debtor company has assets, then a creditor can serve that company with a statutory demand for payment.

Failure to comply with a statutory demand allows a creditor to commence proceedings to wind up the debtor company.

All assets, bank accounts etc. are frozen and realised to satisfy the debts owed to the creditors.

The liquidator is also able to void certain transactions, or in some cases make the director(s) personally liable for the debt.

If the debtor company does not respond, then it is presumed to be insolvent and a creditor can take steps to wind it up in insolvency.

Once served, the debtor company will have 21 days to do any of the following:

  1. Pay the amount claimed;
  2. Secure or compound for the debt;
  3. Request that the demand be withdrawn; or
  4. Make an application to the Court setting aside the demand.

If they pay, or reasonably secure or compound (enter into an arrangement to pay) for the debt, then the demand is extinguished.

If the debtor company has grounds to set the demand aside, then before making the application, they may simply request that the demand be withdrawn.

If they ask that a creditor withdraw the demand, and a creditor does not, then a creditor may be liable to pay the costs of the application to set the demand aside if they are successful.

Read our complete guide to statutory demands – Guide to Statutory Demands

Contact us to discuss how we can help you issue a creditor’s statutory demand.

Setting Aside the Statutory Demand

A debtor company has four (4) main grounds for setting aside the statutory demand, they are:

  1. There is a genuine dispute as to the existence or amount of the debt; and/or
  2. They have a genuine offsetting claim; and/or
  3. There is a defect in the demand which is likely to cause substantial injustice; and/or
  4. Some other reason.

The bar for setting aside a statutory demand is quite low.

All that a debtor needs to do is prove to that any of the above exist, and the demand will likely be set aside.

If the demand is set aside, then the Court may order that you pay the debtor company’s costs of the application.

Read our complete guide to setting aside a statutory demand – Guide to Setting Aside a Statutory Demand

Contact us to discuss how we can help you Setting Aside a Statutory Demand

In a lot of cases it is better to get a judgment or enforceable money order in the Court or QCAT first, and then use a statutory demand to enforce that judgment or money order.

Enforcement of the Judgment or Money Order

The end result of legal proceedings for debt recovery is to obtain a legally enforceable judgment or money order from the Court.

If the judgment debtor still refuses to pay the judgment debt, then a judgment creditor will need to enforce the judgment over the property of the judgment debtor.

There are a few different enforcement options, namely:

  1. Enforce the judgment debt in the Court; or
  2. Enforce the judgment debt with insolvency.

We will explain these in more detail below.

Enforcing the Judgment in the Court

The options for enforcing the Judgment in the Court are:

  1. Summon the judgment debtor to an enforcement hearing to attempt to extract information regarding their financial position; and/or
  2. Apply to the Court for the issue of one of the various types of enforcement warrant.

Summon the Debtor to an Enforcement Hearing

This enforcement option is strictly an information gathering exercise.

If the judgment debtor provides documents showing any assets they own, the equity in those assets, and details of any debts owed to them, this method of enforcement has achieved its purpose, being gathering information to use to request an enforcement warrant.

This can include bank statements, mortgage payout figures, etc.

The first step is to give the judgment debtor a written notice requiring them to complete a sworn statement of financial position. They have fourteen (14) days from receiving the notice to complete and return it.

If the creditor is not satisfied with the contents of the completed statement of financial position, or the debtor does not return one at all, a creditor can then apply to the Court for an enforcement hearing summons order.

An enforcement hearing summons order is a Court order requiring a debtor to complete a statement of financial position (if they have not done so), produce substantial documents regarding their financial position, and appear in Court for the purpose of being cross examined about their financial position. However, in our experience, debtors rarely voluntarily reveal to the Court what assets they own that can be seized.

If a debtor is served with an enforcement hearing summons order at least fourteen (14) days before the date set for the enforcement hearing, but does not attend the hearing, the Court may issue a warrant for their arrest.

You do not need to summon the debtor to an enforcement hearing if you have details which are sufficient to issue an enforcement warrant.

Read our article on Enforcement Hearings and Statement of Financial Position

Either way, once you have the information, you can ask the Court to issue an enforcement warrant.

Issuing an Enforcement Warrant

There are a number of different types of enforcement warrants that can be issued by the Magistrate Court to enforce the Judgment, they are:

  1. Enforcement warrant for seizure and sale of property;
  2. Enforcement warrant for redirection of earnings;
  3. Enforcement warrant for redirection of debt;
  4. Enforcement warrant for regular redirections from financial institutions;
  5. An order for payment by instalments.

We will explain these in more detail below.

Enforcement Warrant for Seizure and Sale of Property

To issue a warrant for seizure and sale of property, the Court will need evidence showing what property is owned by this debtor and the equity in that property.

We can conduct a title search, but we will likely need a payout figure from the mortgagor.

Read our article on Enforcement Warrant for Seizure and Sale of Property

Enforcement Warrant for Redirection of Earnings

To issue a warrant for redirection of earnings the Court will need to be provided with evidence of

  1. Whether the enforcement debtor is employed, and the enforcement debtor’s employer has been identified;
  2. Whether the enforcement debtor has sufficient means of satisfying the order after deducting, the necessary living expenses of the enforcement debtor and the enforcement debtor’s dependants; and
  3. Any other known liabilities of the enforcement debtor.

We can usually ask for payslips etc at the enforcement hearing.

Read our article on Enforcement Warrant for Redirection of Earnings

Enforcement Warrant for Redirection of Debt

A warrant for redirection of debts allows the creditor to enforce an enforceable money order over any debts owed to the judgment debtor by a third person.

When the Court issues the UCPR enforcement warrant for redirection of debts, it then needs to be served on the third person who owes the debt to the judgment debtor.

Enforcement Warrant for Regular Redirections from Financial Institutions

A warrant for regular redirection from financial institutions is a warrant directed toward a third person (the financial institution) for a redirection of a regular deposit paid by a fourth person.

Regular payments to the judgment debtor under a retainer for example.

Read our article on Enforcement Warrant for Redirection of Debt

An Order for Payment by Instalments

An order for payment by instalments is just that, and order that the debtor pays in instalments.

The breach of this order means that the judgment debtor has breached a court order.

If the court enforcement option is not likely to yield and positive results, then we can apply that the judgment debtor be made bankrupt or wound up in insolvency.

Contact us to discuss how we can Enforce a Judgment.

Enforce the Judgment Debt with Insolvency

There are a couple of different ways to enforce a judgment debt with insolvency, they are:

  1. If the judgment debtor is a person – bankruptcy; or
  2. If the judgment debtor is a company – winding up application.

We will explain the process of each in more detail below.

Bankruptcy

An application for a bankruptcy notice will cost a fee of $470.00 with AFSA and $33.55 for a bankruptcy search.

The requirements for a bankruptcy notice are:

  1. There must be a judgment or final order of $5,000 or more, the execution of which has not been stayed.

Much like a statutory demand, if the judgment debtor does not comply with the bankruptcy notice within 21 days then they will have committed an act of bankruptcy, allowing a judgment creditor to present a creditor’s petition to the Federal Circuit Court.

Once bankrupt, all of the debtor’s property (excluding exempt property) vests in the bankruptcy trustee and can be sold to create a fund to pay the bankrupts creditors.

Contact us to discuss how we can help you Enforce a Judgment with Bankruptcy.

Winding Up Application

As mentioned above, failure to comply with the requirements of a statutory demand raises the legal presumption that the company is insolvent.

This legal presumption shifts the onus of proof on the debtor company to prove that they are not insolvent.

With this legal presumption of insolvency assisting, within three (3) months after non-compliance with the statutory demand, the judgment creditor can apply to the Court for an order that the debtor company be wound up in insolvency.

Winding-up Proceedings

The winding-up process is an originating application in the Federal or Supreme Court. The judgment creditor will need to file an application, affidavit of service of the statutory demand, and a further supporting affidavit:

  1. Containing details of the failure of the company to comply with the Statutory Demand;
  2. Stating whether and, if so, to what extent the debt, or each of the debts, to which the Statutory Demand relates is still due and payable at the date when the affidavit is made; and
  3. Annexing a copy of the ASIC search of the company.

Once filed and sealed with the Court’s seal, the documents will need to be served on the debtor company.

Other steps to be taken include (amongst others):

  1. Notification to ASIC of the winding-up application;
  2. Obtaining consent of a Liquidator;
  3. Publishing a notice of the ASIC Insolvency Notices website.

Once served, the debtor company can attempt to defend the winding-up action.

Liquidator

The role of the liquidator is to attempt to realise the company’s assets, and if possible, make a payment to the creditors.

The liquidator also has claw-back powers for voidable transactions. These include:

  1. Transfer to defeat/defraud creditors;
  2. Uncommercial transactions;
  3. Unfair loans to a company;
  4. Unfair preferences;
  5. Unreasonable director-related transactions.

This may include any payments to associated companies/businesses.

If the liquidator finds any of these transactions, they will attempt to void that transaction and realise the asset or cash for the benefit of the creditors.

Once the order is made and the liquidator is appointed, the process can take 12 to 18 months to wind-up the company and organise its affairs.

The liquidator will report to the judgment creditor (and all creditors) at the start of the liquidation, at about three (3) months, and whenever they deem it necessary to do so.

Legal Proceedings for Debt Recovery Process

That’s basically it.  The process is simply:

  1. Try to resolve the dispute without litigation;
  2. Start legal proceedings for debt recovery;
  3. Obtain a judgment or enforceable money order; and
  4. Enforce that judgment over the property of the debtor.

We would always strongly recommend that you use a debt recovery litigation lawyer who understands debt recovery law and debt recovery legislation to recover your debts.

Debt Recovery FAQ

Below are a number of frequently asked questions in relation to legal proceedings for debt recovery and debt recovery action.

Who is Liable for Joint Debts?

In most cases both parties in joint debts are jointly and severally liable.  This means they jointly owe the debt, and they both individually owe the entire debt.

This means that a creditor can choose to enforce the debt over one or both of the debtors.

Am I Liable for my Partner’s Debts?

No, not usually.  The only way that a person may be liable is if they have signed a joint loan agreement or a personal guarantee.

However, if you are using the item over which the money is owed, a car for example, then a secured creditor may repossess the item.

How do I find out if a Money Order has been Made Against Me?

The following Courts have an online search facility:

  1. Federal and Federal Circuit Court – https://www.comcourts.gov.au/public/esearch
  2. District and Supreme Courts – http://apps.courts.qld.gov.au/esearching/

If you think an order has been made against you in the Magistrates Court, then give them a call and they will tell you what has happened on that Court file.

What do I do if a Money Order has been Made Against Me?

Depending on what you want to do, you can attempt to pay the debt, or negotiate a repayment plan, or if you want to dispute the debt, then attempt to set aside the default judgment.

Care must be taken that the judgment creditor doesn’t start enforcement proceedings.

How do I Negotiate a Payment Arrangement?

We would always advise getting a solicitor to negotiate on your behalf.

Ultimately you need leverage.  The more leverage you have in a negotiation, the better the outcome you will likely receive.

Do I need Legal Advice?

Yes.  We would always advise that both creditors and debtors take legal advice before starting legal proceedings for debt recovery.

A solicitor may be able to save you money and protect your rights and interests.

If you need to start legal proceedings for debt recovery then it is important to get it right and you should contact a lawyer

DEDICATED TEAM – COMMERCIALLY MINDED – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Making a Payment Claim – BIFA (QLD)

By //  by 

Payment Claim new BIFA replaces old BCIPA legislation in QueenslandA payment claim process using the old BCIPA – Building & Construction Industry Payments Act 2004 (Qld) has been repealed and replaced with Building Industry Fairness (Security of Payment) Act 2017 (Qld) (“BIFA”).

The provisions of the repealed legislation have been amended and incorporated into BIFA.

Progress Payments and Payment Claims from the previous BCIPA – Building & Construction Industry Payments Act 2004 (Qld) are dealt with in Chapter 3 of BIFA.

This article will deal with making a payment claim under BIFA in more detail below.

Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.

GET A FREE FEE ESTIMATE TODAY

Call 1300 545 133 and speak to our debt recovery lawyers

Making a BIFA Payment Claim

If you are eligible, then making a claim using BIFA is a relatively straightforward and structured process allowing you to seek payment for the goods and/or services you have provided.

Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.

Eligible Person under BIFA

BIFA relates to payments under a construction contract.

Construction contract (whether written or oral, or partly written and partly oral) is defined as:

“construction contract” means a contract, agreement or other arrangement under which 1 party undertakes to carry out construction work for, or to supply related goods and services to, another party.

Construction Work is defined at section 65 of BIFA and are quite extensive, but includes:

the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures, whether permanent or not, forming, or to form, part of land … of any works forming, or to form, part of land, including walls, roadworks, powerlines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for land drainage or coast protection …

In BIFA Construction Work does not include:

the drilling for, or extraction of, oil or natural gas; the extraction, whether by underground or surface working, of minerals, including tunnelling or boring, or constructing underground works, for that purpose.

Related Goods and Services are defined at section 66 of BIFA and include the following goods:

materials and components to form part of any building, structure or work arising from construction work … plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;

And also include the following services:

the provision of labour … architectural, design, surveying or quantity surveying services … building, engineering, interior or exterior decoration or landscape advisory services … soil testing services … and goods and services, relating to construction work, of a kind prescribed by regulation.

The few that are included in this article are just a small sample of the actual types of construction works and related goods & services.  You should follow the links to read them all.

There are also a number of construction contracts that BIFA does not apply to which are referenced under sections 61(2) to 61(4) of BIFA.

If you have an eligible construction contract for work defined as construction work, or the provision of related goods and services, then you might have a right to a progress payment.

Right to a BIFA Progress Payment

If you contract contains a payment provision which is not a void payment provision, you are entitled to a progress payment on the day on which the payment becomes payable under the provision.

Section 70 of BIFA says:

From each reference date under a construction contract, a person is entitled to a progress payment if the person has carried out construction work, or supplied related goods and services, under the contract.

A Reference Date under BIFA is defined at section 67 and says:

A “reference date” for a construction contract, means … a date stated in, or worked out under, the contract as the date on which a claim for a progress payment may be made for construction work carried out, or related goods and services supplied, under the contract

Alternatively, if you contract does not contain a reference date then the reference date is the last day of the month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract … and the last day of each later month.

If you have an eligible construction contract for work defined as construction work, or the provision of related goods and services, and you have a right to a progress payment, then you may be able to make a BIFA payment claim.

BIFA Payment Claim

If you tick all of the boxes above, then you may be able to make a payment claim.

Section 68 of BIFA says that a payment claim:

  1. Identifies the construction work or related goods and services; and
  2. States the amount (the claimed amount) of the progress payment that the claimant claims; and
  3. Requests payment of the claimed amount; and
  4. Includes the other information prescribed by regulation.

Section 68 of BIFA also says that a written document bearing the word ‘invoice’ is taken to be a request for payment.

There are strict requirements in BIFA for the issuing and serving of payment claim.  Contact our solicitors today to get legal assistance with issuing a payment claim.

Time Requirements for Payment Claims

Section 75 of BIFA defines the time requirements for making a payment claim.

If the payment claim is not related to a final payment, then the claim must be served the later of:

  1. The time allowed for in the construction contract; or
  2. Six (6) months after the work to which the claim relates was last carried out; or
  3. The related goods and services to which the claim relates were last supplied.

If the payment claim is related to a final payment, then the claim must be served the later of

  1. The time allowed for in the construction contract; or
  2. Twenty-eight (28) days after the end of the last defects liability period; or
  3. Six (6) months after the completion of the works; or
  4. Six (6) months after the complete supply of related goods and services to be supplied under the construction contract.

Summary of Eligibility

In summary to the above a party:

  1. Who has a written or oral construction contract;
  2. Who has provided construction work or related goods and services;
  3. Who has given an eligible payment claim (an invoice) to the other party; and
  4. Who has complied with the time requirements of BIFA.

Than that that party is entitled to the protections offered under the new BIFA legislation.

After the party has validly served a BIFA payment claim, the respondent will then have to give a BIFA payment schedule.

Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.

Payment Schedules after Payment Claim

Once you have validly served the BIFA payment claim section 76 of BIFA says:

A respondent must respond to the payment claim by giving the claimant a payment schedule within whichever of the following periods ends first … the period, if any, within which the respondent must give the payment schedule under the relevant construction contract … or 15 business days after the payment claim is given to the respondent.

Consequences for not Giving a Payment Schedule

Section 77 of BIFA says:

If a respondent given a payment claim does not respond to the claim by giving the claimant a payment schedule as required under section 76 … the respondent is liable to pay the amount claimed under the payment claim to the claimant on the due date for the progress payment to which the payment claim relates.

If the debtor does not pay the amount in the payment claim by the due date then you can recover that amount as a debt in the Court with jurisdiction; or make an adjudication application.

Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.

START NOW – FAST TURNAROUND – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

Call 1300 545 133 and speak to our debt recovery lawyers

Consequences for Non-payment of Payment Schedule

Section 78 of BIFA says:

If a respondent given a payment claim for a progress payment does not pay the amount owed to the claimant in full on or before the due date for the progress payment … The claimant may either … recover the unpaid portion of the amount owed from the respondent, as a debt owing to the claimant, in a court of competent jurisdiction … or apply for adjudication of the payment claim.

Section 78 of BIFA defines Amount Owed to mean:

“amount owed” to a claimant for a payment claim, means:

(a) if the respondent did not respond to the payment claim with a payment schedule as required under section 76 —the amount claimed under the payment claim; or

(b) if the respondent did respond to the payment claim with a payment schedule as required to do so under section 76 —the amount proposed to be paid under the payment schedule.

Notice before Commencing Court Proceedings

If you intend to recover the amount mentioned above as a debt in the Court with jurisdiction, then:

  1. Before proceeding you need to give the debtor a notice under section 99 of BIFA; and
  2. The five (5) business days for the debtor to serve the payment schedule, as stated in the notice, has ended.

Section 99 of BIFA says that the notice must be given to the debtor within 20 business days immediately following the due date for the progress payment; and it must be in the approved form.

The approved form for this notice is the Form S99 – Warning Notice – Notice Of Intention To Start Legal Proceedings.

If you correctly serve this notice, and the 5 business days have elapsed, you are then able to recover the amount of the payment claim as a debt in the Court with jurisdiction.

The benefit of commencing legal action in the Court with jurisdiction is that the respondent debtor is statute-barred from raising a defence or bring any counterclaim.

Section 100(3) of BIFA says in relation to proceedings to recover the unpaid amount as debt:

The respondent is not, in those proceedings, entitled (a) to bring any counterclaim against the claimant; or (b) to raise any defence in relation to matters arising under the construction contract.

Valid Service under BIFA

Section 102 of BIFA says that a notice or other document under this chapter can be served pursuant to a term or terms in the construction contract; or pursuant to section 39 of the Acts Interpretation Act 1954 (QLD) which says:

If an Act requires or permits a document to be served on a person, the document may be served—

On an individual—by delivering it to the person personally; or by leaving it at, or by sending it by post, telex, facsimile or similar facility to, the address of the place of residence or business of the person last known to the person serving the document; or

On a body corporate—by leaving it at, or sending it by post, telex, facsimile or similar facility to, the head office, a registered office or a principal office of the body corporate.

If the claimant does not want to commence legal action to recover the debt in the Court, then the claimant can apply for an adjudication application.

What is a BIFA Adjudication?

If you did not want to recover the amount of the payment claim as a debt in the Court with jurisdiction then you could apply to get the matter resolved by adjudication.

An adjudication is a process whereby a professional trained in BIFA dispute resolution assesses the payment schedule and the payment claim and makes a determination in an attempt to resolve this dispute.

A BIFA Adjudication Application

Section 79 of BIFA says that an adjudication application:

  1. Must be in the approved form; and
  2. Must be made in the correct time-frame; and
  3. Must identify the payment claim and the payment schedule to which it relates; and
  4. Must be accompanied by the fee prescribed by regulation for the application; and
  5. May contain the submissions relevant to the application the claimant chooses to include.

A list of BIFA adjudicators can be found here.

Once an adjudication application has been accepted by an adjudicator, the other party must provide the adjudicator with an adjudication response.

The adjudication response must be given within the time required by section 83 of BIFA.

The adjudicator must then decide the matter within the time required by section 85 of BIFA.

Read our great article on Making an Adjudication Application in Queensland

Adjudication Certificate

Once the adjudicator has made the decision, then they must pursuant to section 91 of BIFA provide the claimant with an adjudication certificate.

The adjudication certification certificate must include:

  1. The name of the claimant;
  2. The name of the respondent who is liable to pay the adjudicated amount;
  3. The adjudicated amount;
  4. The date on which payment of the adjudicated amount was required to be paid to the claimant;
  5. The rate of interest payable on the adjudicated amount;
  6. The fees, identified in the decision, that the respondent is to pay;
  7. That the certificate is made under this Act.

The adjudication certificate can then be registered in the Court with competent jurisdiction and enforced as a money order of that Court.

Enforcement of an Adjudication Certificate

Section 93 of BIFA says:

An adjudication certificate may be filed as a judgment for a debt, and may be enforced, in a court of competent jurisdiction.

The adjudication certificate must be accompanied by an affidavit of the claimant stating that the whole or a part of the adjudicated amount has not been paid to the claimant at the time the certificate is filed.

Rule 793 of the Uniform Civil Procedure Rules 1999 (QLD) says:

“enforceable money order” of a court, means (a) a money order of the court; or (b) a money order of another court or tribunal filed or registered under an Act in the court for enforcement.

Because section 93 of BIFA allows for the adjudication certificate to be registered and enforced, in a court of competent jurisdiction, then rule 793 applies and the decision becomes an enforceable money order.

Conclusion

The new Building Industry Fairness (Security of Payment) Act 2017 (Qld) includes some good amendments to assist the payment of monies the subject to building and construction disputes.

Very strict time limits apply to the different stages of BIFA. Ensure that you do not miss out on a claim by contacting our building and construction lawyers today.

START NOW – FAST TURNAROUND – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

Call 1300 545 133 and speak to our debt recovery lawyers

Enforcement Warrant for Redirection of Debts

By //  by 

Enforcement Warrant for Redirection of DebtsAn enforcement warrant for redirection of debts is an enforcement option pursuant to the Uniform Civil Procedure Rules 1999 (QLD) (“UCPR”).

An enforcement warrant for redirection of debts is a way of enforcing a judgment, enforcing a registered QCAT decision or enforcing a registered adjudication decision.

A warrant for redirection of debts allows the creditor to enforce an enforceable money order over any debts owed to the judgment debtor by a third person.

The redirection warrant confers the obligation on the third person to pay the debt to the creditor rather than the debtor.

Just like other enforcement warrants, a warrant for redirection of debts is obtained by making an application to the Court.  The application consists of:

  1. The application;
  2. A statement in support of the application; and
  3. A draft enforcement warrant.

When the Court issues the UCPR enforcement warrant for redirection of debts, it then needs to be served on the third person who owes the debt to the judgment debtor.

This article will give you all the information needed to apply for an enforcement warrant for redirection of debts, and give you hints and tips to avoid pitfalls.

There are a number of difficult steps that need to happen before the third person must comply with an enforcement warrant for redirection of debts. We strongly recommend engaging a qualified legal professional

FIXED FEES – DEDICATED TEAM – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Enforcement Warrant for Redirection of Debts

Rule 840(1) of the UCPR says:

A court may issue an enforcement warrant authorising redirection to an enforcement creditor of specified debts certainly payable, belonging to an enforcement debtor, from a third person.

For the Court to issue an enforcement warrant for redirection of debts the creditor will need:

  1. An enforceable money order;
  2. An application – Form 9;
  3. A draft warrant – Form 76;
  4. A statement in support of the application – Form 74; and
  5. To serve the debtor and the third person.

We will give you more information on each of these steps below.

What is an Enforceable Money Order?

Rule 793 of the UCPR says:

“enforceable money order” of a court, means – a money order of the court; or a money order of another court or tribunal filed or registered under an Act in the court for enforcement.

Schedule 3 of the UCPR defines an order to mean:

“order” … includes a judgment, direction, decision or determination of a court whether final or otherwise.

An enforceable money order is a money judgment from the Court, or a decision in QCAT or an adjudication decision registered in the Magistrates Court.

A QCAT decision or an adjudication decision that has not been registered in the Court is not an enforceable money order.

Rule 793 of the UCPR says:

“enforcement creditor” means – a person entitled to enforce an order for the payment of money; or a person to whom the benefit of part of the order has passed by way of assignment or in another way.

If an enforcement creditor has an enforceable money order, then to issue the warrant the enforcement creditor will need to ensure that they are eligible.

Eligibility Requirements

The eligibility requirements to be granted an enforcement warrant for redirection of debts include:

  1. There must be a debt owed;
  2. The debt must be an actual debt presently due; and
  3. The debt must be owed by a third person.

We will discuss these eligibility requirements in more detail below.

There must be a Debt Owed

Rule 839 says that the payment of earnings or payment into Court are not debts which can be directed under this warrant. These debts are dealt with in their own enforcement warrants.

As stated above, rule 840(1) of the UCPR says “specified debts certainly payable”.  The UCPR is silent on what constitutes a “specified debt”.

The debt must be owed to the judgment debtor in his/her/its own right.  The debt cannot be owed in its capacity as trustee for example.

The debt also cannot be an unliquidated debt but must be a liquidated amount.

The most common scenario is instalment payments or debts owed under credit agreements for example.

The Debt must be Presently Due

The debt must be presently due and cannot be the mere possibility or probability of a future debt.

Rule 840(3) of the UCPR says:

A debt may be redirected only if the debt, or the part of the debt belonging to the enforcement debtor, is payable to the enforcement debtor from the third person on the date the enforcement warrant is served on the third person.

In Jackson & Chenoweth v Marsh & Webster Ltd [1924] QWN 51 McCawley CJ, Lukin J, Macnaughton J said:

[The] rule … should be read as restricted to debts existing, whether payable in present or in future, and did not include the money which C., on the transactions with B., might ultimately become possessed of on behalf of B. That there was no debt “owing or accruing” by B. to C. at the time the Magistrate made the garnishee order that could be attached.

A conditional debt payable upon a certain event occurring cannot be redirected until the condition has been satisfied.

In Queensland Carriage Waggon and Tramcar Co Ltd v Somerville (1890) 4 QLJ 10 following a long line of precedents Lilley CJ said:

This was not a perfected, absolute debt; it was not due or accruing due, because defendant had not done work, and might never finish it. It depended on a condition—that was, the architect’s certificate …  I cannot deal with the money until Campbell has got what is owing him; and, at present, there is no debt, legal or equitable, nor is there a prospect of any. The rule nisi must be dismissed, with costs of all parties, to be paid by the judgment creditors.

So, the debt must be a present debt and not a debt future or contingent debt.

The Debt must be Owed by a Third Person

The debt must be owed by a third person, which means any person and includes the State.

Rule 793 of the UCPR says:

“third person” means – a person (including the State) from whom a debt is payable to the enforcement debtor; or is likely to become payable to the enforcement debtor

The State Can owe Debts

Section 95 of the Civil Proceedings Act 2011 (QLD) deals with debts owed by the State.

The third person must be within Australia.

The third person must be within Australia.  In Suzlon Energy Ltd v Bangad [2011] FCA 1152 applying obiter dicta from Société Eram Shipping Co Ltd v Cie Internationale de Navigation [ 2004] 1 AC 260 Rares J said:

In principle and on authority it seems to me that the court should not, save in exceptional circumstances, impose such a requirement upon a foreigner …

The debt can be from a Bank

The debt can be from a financial institution to the credit of an enforcement debtor.

Section 97 of the Civil Proceedings Act 2011 (QLD) says:

An amount standing to the credit of an enforcement debtor in an account in a financial institution is, for enforcing a money order, a debt payable to the enforcement debtor

This means that any money held in a bank account can be used to enforce the judgment debt, even if the conditions under 97(1)(a) to (d) have not been met.

This bank account can include a joint bank account.

Joint Fund

The debt can be owed from a joint fund, a joint bank account in the name of husband and wife for example, where only one is the enforcement debtor.

Section 94 of the Civil Proceedings Act 2011 (QLD) says:

(1) This section applies if the debt belonging to the enforcement debtor is a fund of money owned by the enforcement debtor and others (a “joint fund”).

(2) An enforcement warrant may authorise redirection to an enforcement creditor of a joint fund to the extent of the enforcement debtor’s entitlement.

(3) It is presumed a joint fund is owned by the fund owners in equal shares unless, on application of a fund owner or enforcement creditor, the court decides the actual beneficial entitlement of each fund owner.

Partnership Debts

The debts owing to the enforcement debtor can also be partnership debts.

Section 96 of the Civil Proceedings Act 2011 (QLD) says:

A court may issue an enforcement warrant authorising redirection to an enforcement creditor of particular debts, belonging to an enforcement debtor, from a partnership carrying on business in Queensland even if a partner resides outside Queensland.

If the Third Person is a Company

If the third person is a company then the company is subject to section 440D and 471B of the Corporations Act 2001 (CTH).

Section 440D of the Corporations Act 2001 (CTH) says:

During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except with the administrator’s written consent; or with the leave of the Court …

Section 471B of the Corporations Act 2001 (CTH) says:

While a company is being wound up in insolvency … a person cannot begin or proceed with … enforcement process in relation to such property

So, unless leave is granted by the Court, a warrant directed at a corporate third person under administration or in liquidation cannot be made.  Best to check on the ASIC website beforehand.

So, if a judgment creditor is eligible and it can provide an eligible third person, then the judgment creditor can make the application for a warrant for redirection of debts.

Application for a Warrant for Redirection of Debts

The application for an enforcement warrant for redirection of debts – Form 9 – outlines the order (or orders) that the plaintiff is asking the Court to make.

The costs of the warrant are fixed at Schedule 2 of the UCPR depending on the amount of the claim – see item 15.

The application for an enforcement warrant for redirection of debts also needs to state who the third person is namely who the warrant needs to be served on.

The Draft Warrant

The form of the draft enforcement warrant for redirection of debts is Form 76.

The draft enforcement warrant needs to include:

  1. Enforcement Creditor name and address
  2. Enforcement Debtor name and address
  3. Third Person name and address

It also needs to include:

  1. Judgment amount;
  2. Less payments;
  3. Plus interest;
  4. Plus costs; and
  5. Total owing.

The application for an enforcement warrant for redirection of debts and the draft warrant need to be accompanied by a statement in support of the application.

Statement in Support of the Application

The statement in support of the application must be in the approved form – Form 74.

The statement in support of the application should be sworn not earlier than two business days before the date of the application.

Rule 817(1)(b) of the UCPR says:

A person applying for an enforcement warrant must file … a statement in the approved form sworn by the enforcement creditor, or the enforcement creditor’s agent or solicitor, not earlier than 2 business days before the date of the application.

The statement in support of the application for an enforcement warrant for redirection of debts must include the following:

  1. The date the money order was made;
  2. The amount for which the order was made;
  3. The date and amount of any payment made under the order;
  4. The costs incurred in previous enforcement proceedings in relation to the order debt;
  5. Any interest due at the date the statement is sworn;
  6. Any other details necessary to calculate the amount payable under the order at the date the statement is sworn and how the amount is calculated;
  7. Any daily amount of any interest that, subject to any future payment under the order, will accrue after the date the statement is sworn;
  8. Any other information necessary for the warrant being sought.

It is likely that the registrar will require an amended form to specifically identify the debt sought to be redirected by the third person.

The Court will consider a number of factors identified in rule 840(2) of the UCPR .

Factors the Court will Consider

Rule 840(2) of the UCPR says:

In deciding whether to issue an enforcement warrant authorising redirection, including regular redirection under division 2, the court must have regard to the following—

(a) whether the enforcement debtor has adequate means of satisfying the order after deducting—

(i) the necessary living expenses of the enforcement debtor and the enforcement debtor’s dependants; and

(ii) any other known liabilities of the enforcement debtor;

(b) whether the amount of regular debt to be redirected would impose unreasonable hardship on the enforcement debtor;

(c) if the applicant is the enforcement debtor—whether, having regard to the availability of other enforcement means, the issue of the warrant would be consistent with the public interest in enforcing orders efficiently and expeditiously;

(d) whether, having regard to the nature of the debt (belonging to the enforcement debtor from the financial institution) and the type of redirection, a regular redirection or otherwise, is appropriate.

If the Court and/or the Registrar is satisfied of the above, then it will issue the enforcement warrant.

The next step in the process is to serve the enforcement warrant for redirection of debts on the third person.

Service of Enforcement Warrant for Redirection of Debts

Once the Court has granted the warrant and provided the judgment creditor with a sealed copy, the judgment creditor must serve the warrant on the third person.

Rule 842(1) of the UCPR says:

An enforcement warrant authorising redirection of a debt belonging to an enforcement debtor from a third person must be served on the third person to have effect.

There is no mention in the UCPR that a judgment creditor must serve the warrant on the judgment debtor.  However, there is a notice to the enforcement debtor on the draft warrant which says:

You may apply to the court to set this warrant aside or to stay its enforcement at any time.

It seems that it is implied in the Form 76 that the enforcement debtor be served a copy of the warrant.

Best practice – serve a copy on the enforcement debtor as soon as practicable after serving the third person.

Ordinary Service of Enforcement Warrant for Redirection of Debts

An enforcement warrant is not an originating application and so ordinary service is the mode of service.

Ordinary service is prescribed at rule 112 of the UCPR and can be performed by:

  1. Posting the warrant to the address of the third person;
  2. Leaving it with a person who looks over sixteen (16) years old;
  3. Leaving it at the address in a position where it is reasonably likely to come to the third person’s attention;
  4. Facsimile of email if permissible.

Best case, unless you can deliver it to the third person personally, express post to the address contained in the enforcement warrant.

Once served the third person has to comply with the warrant using reasonable diligence to give effect to the redirection.

If complied with, the warrant is valid for one (1) year after it was issued.

Section 91 of the Civil Proceedings Act 2011 (QLD) says:

An enforcement warrant ends 1 year after it issues unless the warrant states that it ends at an earlier time.

Failure to Comply with the Warrant

If the third person fails to act using reasonable diligence to comply with the enforcement warrant for redirection of debts, then there are a number of serious consequences.

Section 98 of the Civil Proceedings Act 2011 (QLD) says:

If a third person – does not comply with an enforcement warrant authorising redirection of a debt from the third person; and does not file a notice of objection; and fails to dispute the third person’s liability to pay the debt; the enforcement creditor has the same entitlement to enforce the debt as the enforcement debtor had.

There is also a notice to the third person on the Form 76 which says:

Failure to comply with this warrant may be contempt of court and may entitle the enforcement creditor to obtain an order against you.

So, it is very important that the third party comply with the enforcement warrant.

If the third person objects to the warrant, then it can make an application to set it aside.

Set Aside Enforcement Warrant for redirection of debts

Rule 819(1) of the UCPR says:

An enforcement debtor or another person affected by an enforcement warrant may apply to the court to set it aside or to stay enforcement at any time.

The application should be made by adapting the Form 9 application and providing supporting evidence by way of affidavit Form 46.

Once sealed, a copy of the documents will need to be served on the enforcement creditor and the enforcement debtor.

Rule 31(5) of the UCPR says:

An application must be filed and then served on each respondent at least 2 business days before the day set for hearing the application.

Claim by Other Person

The court may consider that another person claiming the benefit of the debt should be given the opportunity to be heard.

Rule 845 of the UCPR says:

This rule applies if a court considers that another interested person, including, for example, a person other than an enforcement debtor who may be entitled to all or a part of a redirected debt or to a charge or lien on it, should be given the opportunity to be heard.

The court may – order that notice of the hearing of the notice of objection be given to the other person; and at the hearing, decide the other person’s entitlement or give directions as to how the entitlement is to be decided.

Discharge of the Third Person

A payment to an enforcement creditor made by a third person in compliance with an enforcement warrant is a valid discharge of the third person’s liability to the enforcement debtor to the extent of the amount paid.

There is another similar warrant available under this Part, being a warrant for regular redirection from financial institutions, being Division 2 of Part 5.

Regular Redirection from Financial Institutions

A warrant for regular redirection from financial institutions is a warrant directed toward a third person (the financial institution) for a redirection of a regular deposit paid by a fourth person.

The Form for this warrant is Form 77.

Rule 847 of the UCPR says:

This division applies if – an enforcement debtor has an account with a financial institution (the “third person“); and a fourth person (the “fourth person“) regularly deposits earnings into the account (a “regular deposit“).

Rule 848 of the UCPR says:

“regular debt” means a debt, belonging to the enforcement debtor, from the third person because of a regular deposit by the fourth person.

The application is made in the same way as an application for a warrant for redirection of debts, except for the amendments required to ensure that it is an application made under this division.

Content of Enforcement Warrant for Regular Redirection

As well as the provisions outlined above the enforcement warrant for regular redirection must also include:

  1. The name of the financial institution;
  2. Details of the enforcement debtor’s account;
  3. The amount of the deduction to be made; and
  4. The name and address of the enforcement creditor.

See Rule 849 of the UCPR for more.

Once drafted correctly, filed and sealed with the Court’s seal, the enforcement creditor must serve the enforcement debtor and the financial institution.

Service of the Warrant for Regular Redirection

For the warrant to take effect, the enforcement creditor must serve the enforcement debtor and the financial institution.

Rule 850 of the UCPR says:

An enforcement warrant for regular redirection must be served personally or by post on the enforcement debtor and the financial institution.

Sending the warrant by express post with a delivery receipt should suffice, but to be 100% sure, then an enforcement creditor can engage a process server to personally serve the warrant.

Once served, the warrant comes into force after the seventh (7th) day after service is effected.

Complying with the Warrant for Regular Redirection

After that date, the financial institution must deduct from the account the amount specified in the warrant and pay it to the enforcement creditor within two (2) business days.

The enforcement debtor must keep enough funds in its account to pay the amount specified in the warrant.

The obligation under the warrant is discharged upon the total amount specified in the warrant being paid or the enforcement warrant is set aside, varied or expires.

Enforcement Warrant for Redirection of Debts

We strongly suggest that you engage a suitable qualified legal practitioner who specialises in the enforcement of money orders.

If you have a QCAT decision or adjudication decision which need to be registered in the Magistrates Court and enforced, or a judgment, direction, decision or determination of the Court to be enforced then contact our dedicated enforcement lawyers today.

There are a number of complicated steps that need to happen before a Court will issue an enforcement warrant for redirection of debts or an enforcement warrant for regular redirection from financial institutions. We strongly recommend engaging a legal professional.

There are a number of difficult steps that need to happen before the third person must comply with an enforcement warrant for redirection of debts. We strongly recommend engaging a qualified legal professional

FIXED FEES – DEDICATED TEAM – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION