Enforcement Hearing & Statement of Financial Position

NEWS & ARTICLES

Enforcement Hearing Statement of Financial Position QueenslandAn enforcement hearing and statement of financial position are ways that provide the judgment creditor with the required information to request an enforcement warrant pursuant to Chapter 19 Part 2 of the Uniform Civil Procedure Rules 1999 (QLD) (“UCPR”).

If a creditor has received an enforceable money order and they want to attempt to enforce the judgment or enforce the QCAT decision, then the judgment creditor is expected to have a certain level of proof or evidence of certain requirements for the warrant.

For example – an application for an enforcement warrant for seizure and sale of property requires the registrar to be satisfied that the judgment debtor owns that property.

Or, an application for an enforcement warrant for redirection of earnings requires the registrar to be satisfied that the judgment debtor is employed, has the ability to satisfy the warrant, and that the debtor will not suffer hardship.

Usually, a creditor will not know this information and will need to rely on the content of the statement of financial position, the documents provided by the debtor, and what is said and provided at the enforcement hearing.

An enforcement hearing and completed statement of financial position is not necessary to be given an enforcement warrant, but it is needed in most cases.

This article will explain the enforcement hearing process and the statement of financial position.

There are a number of steps that need to be taken to successfully apply for an enforcement hearing. We strongly recommend engaging a suitably qualified legal professional

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The Purpose of an Enforcement Hearing

As mentioned above, an enforcement hearing is basically an information gathering exercise.

Rule 803 of the UCPR says:

The purpose of an enforcement hearing is to obtain information to facilitate the enforcement of a money order.

The debtor is summoned to appear in the Court to answer questions about their financial position under oath, and also to produce whatever documents the creditor requires to enforce the money order.

In Remely v. O’Shea & Ors (No. 3) [2009] QSC 110 McMeekin J said:

The information referred to in the rule is that information which will enable a judgment creditor to best secure payment of the monies owed and so satisfy the judgment debt

The Enforcement Hearing Process

The enforcement hearing process is set out in the UCPR.  A creditor must take the following steps to be given an enforcement hearing summons by the Court:

  1. Obtain an enforceable money order;
  2. Serve the debtor with a statement of financial position;
  3. Wait for the required time to receive the completed statement of financial position;
  4. Make an application for an enforcement hearing to the Court;
  5. Serve the enforcement hearing summons on the debtor;
  6. Be given documents and a completed statement of financial position;
  7. Attend at the enforcement hearing and question the debtor.

I will address these steps in more detail below.

Letter of Demand

Once a creditor has received the sealed judgment from the Court, or the registered QCAT decision, a creditor may initially attempt to send this enforceable money order with a letter of demand.

If the debtor pays the judgment debt, then you will not be put to the costs of the enforcement hearing process.

We have more information on the letter of demand process here.

Obtain an Enforceable Money Order

Any of the enforcement options in Chapter 19 of the UCPR requires the creditor to have an enforceable money order.

Rule 793 of the UCPR 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.

Schedule 3 of the UCPR says:

“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 registered in the Magistrates Court.

A QCAT decision which has not been registered in the Court is not an enforceable money.

Once a creditor has an enforceable money order, then they are able to serve the debtor with a statement of financial position.

Serve the Debtor with a Statement of Financial Position

A statement of financial position is an approved form:

  1. Form 71 – if the enforcement debtor is a person; or
  2. Form 71a – if the enforcement debtor is a company.

Rule 807 of the UCPR details the requirements for a statement of financial position.

Rule 807(1) of the UCPR says:

At any time after a money order is made, an enforcement creditor may, by written notice, require an enforcement debtor to complete and return to the enforcement creditor a statement of financial position of an enforcement debtor in the approved form.

The statement of financial position is a detailed document which requires the judgment debtor to complete and return to the creditor.

The statement of financial position includes the following very detailed sections:

  • Part 1 – Income
  • Part 2 – Expenses
  • Part 3 – Assets
  • Part 4 – Liabilities
  • Part 5 – Proposal for Payment
  • Part 6 – Verification of Statement

Rule 807(2) of the UCPR says:

The written notice must be given or sent by post to the enforcement debtor together with a blank statement of financial position.

A blank statement of financial position must be given personally if possible or can be sent by post.

However, the blank statement of financial position is given to the debtor, the creditor must keep a receipt as evidence to use in the application for an enforcement hearing.

TIP – We suggest sending the notice and the blank statement of financial position by express post.  You can then check the tracking identification number to prove that it was delivered.

If the Debtor Returns the Statement of Financial Position

It might be possible that if the debtor returns a detailed statement of financial position that it will include all the information that the creditor may require to obtain an enforcement warrant.

This will mean that there is no need for an enforcement hearing.

However, it is more common than not that the debtor will simply ignore the statement of financial position or omit large details of their financial position.

If this happens then the creditor can apply for an enforcement hearing.

If the Enforcement Debtor is a Company

Rule 807(4) of the UCPR says:

If the enforcement debtor is a corporation, an officer of the corporation must complete the statement of financial position.

This means that if the debtor is a company (Debtor Company Pty Ltd – for example) then the Form 71a must be completed by a director, secretary or a very senior manager of the company.

Section 9 of the Corporations Act 2001 (CTH) outlines exactly who is an officer of a company.

Best practice is to send the statement of financial position on a company to the registered office contained in the ASIC current extract.

The debtor must then complete the statement of financial position and return it to the debtor within the prescribed time.

The Required Time to Complete the Statement of Financial Position

The completed statement of financial position must be returned to the creditor on or before fourteen (14) days after receiving it.

Rule 807(3) of the UCPR says:

The enforcement debtor must complete and return the statement of financial position to the enforcement creditor within 14 days after receiving the statement.

The debtor must also provide evidence of the last four (4) payments made to it with the completed statement of financial position.

Rule 807(6) of the UCPR says:

If the enforcement debtor receives regular payments including, for example, wages or social security benefits, the person completing the statement of financial position must include in the statement (a) the date of receipt of the last 4 payments; and (b) if the payments were paid to the enforcement debtor by payment into an account with a financial institution, the account number and any other details necessary to identify the account.

If the debtor does not provide a completed statement of financial position, or if the creditor is not satisfied with the information given in the statement, then the creditor can apply for an enforcement hearing.

Make an Application for an Enforcement Hearing to the Court

Like any other application, an application for an enforcement hearing contains:

  1. The application – Form 9;
  2. The draft enforcement hearing summons – Form 70;
  3. The affidavit in support of the application – Form 46.

We will explain the application process in more detail below.

The Application – Form 9

Like any other application, an application for an enforcement hearing is a document asking the Court to do certain things.

The application for an enforcement hearing usually consists of something like:

TAKE NOTICE that the plaintiff applying to the Court for the following orders:

1.       That the defendant be summoned to an enforcement hearing; and

2.       That the defendant provides the plaintiff with documents and things relating to their finances and complete a statement of financial position; and

3.       That the defendant pays the costs of the plaintiff of the application.

The application is supported by a draft summons (order) and an affidavit in support of the application.

The Draft Enforcement Hearing Summons – Form 70

The enforcement hearing summons is a summons from the Court summoning the debtor to attend at the enforcement hearing on a date and time set by the Court.

It also requires the debtor to produce at the hearing certain documents and things.

These documents and things may include (by way of example only):

  1. Details of the debtor’s employment, including payslips;
  2. Details of the debtor’s bank accounts, bank statements, bank account numbers and account balances;
  3. Details of any government benefits the debtor receives, including Centrelink payments;
  4. Details of any additional sources of income the debtor receives, such as interest, trust account monies, court awards, or benefits;
  5. Details of any financial support the debtor receives;
  6. Details of the debtor’s assets, including cars, motorcycles, boats;
  7. Details of the debtor’s weekly expenses, including rent.

The Affidavit in Support of the Application – Form 46

Rule 808(3) of the UCPR says:

The application must be supported by an affidavit that states the following—

(a) the unpaid amount of the money order;

(b) whether the enforcement creditor has received a completed statement of financial position from the enforcement debtor;

(c) if the enforcement creditor has received a completed statement of financial position from the enforcement debtor, why the enforcement creditor is not satisfied with the information given in the statement.

It may be a good idea to also annex evidence that the statement of financial position was sent to the debtor, the time and date that the debtor received the statement of financial position – to prove that the fourteen (14) days have elapsed.

It is also important to include a statement from the creditor that as at the day of swearing/affirming the affidavit, no payments have been made against the judgment debt.

If everything is completed correctly, then the Court will issue an enforcement hearing summons.

There are a number of steps that need to be taken to successfully apply for an enforcement hearing. We strongly recommend engaging a suitably qualified legal professional

DEDICATED TEAM – FAST TURNAROUND – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Serve the Enforcement Hearing Summons on the Debtor

After being issued with the sealed enforcement hearing summons the creditor must attend to serving the summons on the judgement debtor.

Rule 809(2) of the UCPR says:

An enforcement hearing summons may be served on the person to whom it is directed personally or by prepaid ordinary post.

A creditor can pay for a process server to personally serve the enforcement hearing summons on the debtor or post the summons by express post – as above.

Service of the enforcement hearing summons is very important.  Ultimately, correctly served increases the chances that the debtor will show up to the enforcement hearing.  But if the debtor does not attend at the hearing, unless the registrar can be 100% sure that service was made, they will not likely issue an enforcement hearing warrant (warrant for their arrest).

Rule 809(4) of the UCPR says:

Any other enforcement hearing summons must be served at least 14 days before the day set for the enforcement hearing.

When the enforcement hearing summons is returned from the Court it will include a date, time and place for the enforcement hearing.  The summons must be served at least 14 days before that date.

Completed Statement of Financial Position

If the debtor did not provide the completed statement of financial position initially, then the summons can require that the debtor provide one before the enforcement hearing.

Rule 808(7) of the UCPR says:

The enforcement hearing summons may require the enforcement debtor to complete and return a statement of financial position in the approved form at least 4 business days before the date of the enforcement hearing.

It is well-worth adding this order to the application and the draft summons.

If the debtor turns up to the enforcement hearing, then they may have a completed statement of financial position and some documents at that time.

Attend at the Enforcement Hearing and Question the Debtor

Hopefully the enforcement debtor will attend at the enforcement hearing.

The debtor will swear an oath or affirmation and then answer questions about their financial position.

The combination of the documents provided, and the information provided in the statement of financial position and the enforcement hearing, should be enough to obtain an enforcement warrant.

Location for Enforcement Hearing

Rule 810 of the UCPR says:

If practicable, an enforcement hearing … must be held in a district in which the person to whom the enforcement hearing summons is directed resides or carries on business.

This means that the hearing must be heard in the Court closest to where the debtor lives or carries on business.  In a lot of cases this will be the Court in which the judgment or money order was made.

However, it is quite common for debtors to move.  If this happens then the application for an enforcement hearing can be made in another Court.

If the enforcement hearing is in a district in which the debtor does not live or conduct business, then the creditor must provide the debtor with some money to attend the enforcement hearing.  This is called conduct money.

Conduct Money

Quite possibly one of the most difficult things that we have to try to explain to our creditor clients is the payment of conduct money to the debtor to attend at an enforcement hearing.

Rule 811 of the UCPR prescribes the requirements for conduct money.  It says:

If a person is required by summons to attend an enforcement hearing in a district other than a district in which the person resides or carries on business … conduct money must be offered to the person when the person is served with the summons

Conduct money is to be calculated in accordance with rule 419 of the UCPR and Part 4 of the Uniform Civil Procedure (Fees) Regulation 2009 (QLD) (“Regs”).

The main monies to be paid are to cover the travel expenses.

Conduct Money for Travel Allowance

Section 14 of the Regs says:

The amount of the travelling allowance that is to be paid to a relevant person is (a) the amount actually and properly paid for fares for public transport; or (b) if there is no public transport available—the amount calculated at the rate per kilometre

So, if a creditor is able to calculate the fare for public transport, then that amount.  If no public transport is available, then an amount calculated per kilometre.

The amount per kilometre is calculated in accordance with  Public Service Act 2008 to a public service employee required to use the employee’s private motor vehicle for official purposes, taken to the nearest whole cent – currently 30c per kilometre (adjusted pursuant to the Eight Capitals Consumer Price Index for the Private motoring sub-group most recently published by the Australian Bureau of Statistics starting from an initial ‘adjustment date’ of 1 September 2014).

See the Minister for Employment and Industrial Relations Directive: Motor Vehicle Allowances for more.

If you are to summon the debtor to a district other than a district in which the debtor resides or carries on business then the creditor will need to provide a cheque when service of the summons is made.

Enforcement Hearing FAQ

See below for some frequently asked questions regarding the enforcement of money orders, issuance of the statement of financial position, making the application for an enforcement hearing, summoning the debtor to Court, and attendance at the enforcement hearing.

What Happens if the Enforcement Debtor does not Attend?

If the debtor does not attend at the enforcement hearing, then rule 815 of the UCPR says that the court may treat the person’s refusal … as a contempt of court.

If the Court is satisfied that the debtor was served with the enforcement hearing summons; and it considers the person failed to attend the enforcement hearing without sufficient cause; then the court may issue a warrant ordering the enforcement officer (Bailiff) to arrest the debtor and bring the debtor to court.

The enforcement officer can attend at the address of the debtor with the police and bring the debtor to the watch house until the next Court date.

The approved form for an enforcement hearing warrant is Form 73.

What Happens if the Debtor Does Nothing?

The Court may also treat as contempt if the debtor does not provide a statement of financial position when summoned; failed or refuses to produce the documents or things stated in the summons; refuses to be sworn or to affirmed; and refuses to answer a question.

Remely v. Vandenberg & Ors [2010] QCA 214 is a Queensland Court of Appeal case where the appellant appealed against a six (6) month prison sentence for failing to produce documents and refusing to answer relevant questions.

In the judgment dismissing the appeal with costs Muir JA said:

In my view, the penalty imposed has not been shown to be arrived at in error. The offending conduct was engaged in with a view to frustrating the second respondents’ attempts to recover moneys lawfully due to them under court orders. The conduct was deliberate and protracted.

There are serious consequences for not doing what is required by the Court order or enforcement hearing summons.

How much does an Enforcement Hearing Cost?

There are no filing fees for an application for an enforcement hearing.

The only costs that a creditor will incur are solicitors’ professional fees and any third-party costs such as bailiff fees, process server fees, express postage, etc.

Can I claim my Costs for the Enforcement Hearing?

Yes you can!

Item 14 of Schedule 2 of the UCPR outlines the standard costs that you are able to claim in relation to the enforcement hearing.

Is there a Time Limit for Enforcement Hearings?

A creditor has six (6) years in which to enforce their money order without permission of the Court.

Rule 799(1) of the UCPR says:

An enforcement creditor may start enforcement proceedings without leave at any time within 6 years after the day the money order was made.

Permission (or leave) of the Court is required if it is more than 6 years since the money order was made; or (b) there has been a change in an enforcement creditor or enforcement debtor.

 Moving Forward

We strongly suggest that you engage a suitable qualified legal practitioner who specialises in the enforcement of money orders to issue the statement of financial position, make the application for an enforcement hearing and summon the debtor to Court.

If you have a QCAT decision which needs 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.

DEDICATED TEAM – FAST TURNAROUND – PROVEN RESULTS

GET A FREE FEE ESTIMATE TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

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