Enforcement Warrant for Redirection of Debts

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Article Summary

An 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.

The article provides an in-depth explanation of the Enforcement Warrant for Redirection of Debts, a legal tool for enforcing judgments. This warrant is a method for enforcing judgments, registered QCAT decisions, or registered adjudication decisions by redirecting debts owed to a judgment debtor by a third party to the creditor.

Key points covered in the article include:

  1. Definition of an Enforceable Money Order – This is a prerequisite for obtaining an enforcement warrant and refers to a court’s money judgment or a decision registered in the Magistrates Court. It is essential that the decision or judgment is registered for it to be enforceable.
  2. Eligibility Criteria – The article outlines specific requirements for eligibility, such as the existence of a debt owed, the debt being currently due, and it being owed by a third party within Australia. The debt must be a liquidated amount and not contingent on future events.
  3. Application Process – To apply for this warrant, one needs an enforceable money order, a completed application form (Form 9), a draft warrant (Form 76), and a supporting statement (Form 74). The application should detail the judgment amount, payments made, interest, costs, and the total amount owing.
  4. Court Considerations – The court considers various factors before issuing a warrant, including the debtor’s ability to satisfy the order, the potential hardship on the debtor, and the public interest in efficient order enforcement.
  5. Service and Compliance – The warrant must be served on the third party, typically through standard methods like posting or email. The third party is required to comply diligently with the warrant, which remains valid for one year after issuance.
  6. Consequences of Non-Compliance – Failure to comply can lead to serious legal consequences, including contempt of court. In such cases, the creditor may enforce the debt as if they were the original debtor.
  7. Setting Aside the Warrant – Affected parties have the right to apply to the court to set aside or stay the enforcement of the warrant, using an adapted Form 9 and supporting evidence.
  8. Regular Redirection from Financial Institutions – This is a specific type of warrant for redirecting regular deposits from a debtor’s account in a financial institution. It follows a similar application process to the standard warrant.
  9. Importance of Legal Assistance – The article emphasises the complexity of the process and the importance of engaging a qualified legal professional to ensure proper compliance and effective enforcement.

In summary, our debt recovery & enforcement lawyers provide a comprehensive guide on the Enforcement Warrant for Redirection of Debts, covering its definition, application process, legal considerations, and the importance of professional legal assistance in these matters.

Table of Contents

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.

In this article our debt recovery & enforcement lawyers 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

SPEAK TO AN ENFORCEMENT LAWYER 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

SPEAK TO AN ENFORCEMENT LAWYER TODAY

OR CALL: 1300 545 133 FOR A PHONE CONSULTATION

Enforcement Warrant for Redirection of Debts FAQ

Welcome to our FAQ section, where we provide clear and concise answers to the most common questions about the Enforcement Warrant for Redirection of Debts.

Here, you’ll find essential information to help you understand this legal process and its implications.

What is a Redirection of Debt?

A redirection of debt is a legal process where a creditor, holding an enforceable money order, can redirect debts owed to a judgment debtor by a third party to themselves. This mechanism ensures that debts owed to the debtor, such as payments or account balances, are paid directly to the creditor, facilitating the enforcement of a financial judgment.

How Do You Enforce a Judgment Debt?

To enforce a judgment debt, a creditor can use various legal tools, including enforcement warrants for redirection of debts, garnishee orders, or bankruptcy / liquidation proceedings. The choice of method depends on the debtor’s financial situation and assets. The process typically involves applying to the court with relevant documentation and following specific legal procedures to ensure compliance by the debtor or third parties.

How Long Do Warrants Last in Queensland?

In Queensland, enforcement warrants, including those for the redirection of debts, are valid for one year from the date of issue. This duration allows the creditor sufficient time to enforce the judgment debt, after which the warrant expires unless it specifies an earlier end date or is extended by the court.

What is an Enforcement Warrant for Redirection of Debts?

An Enforcement Warrant for Redirection of Debts is a legal mechanism under the Uniform Civil Procedure Rules 1999 (QLD) used for enforcing a judgment, a registered QCAT decision, or a registered adjudication decision. It allows a creditor to enforce an enforceable money order over debts owed to the judgment debtor by a third party. The warrant obligates the third party to pay the debt to the creditor instead of the debtor.

What Constitutes an Enforceable Money Order?

An enforceable money order refers to a money judgment from the Court, or a decision in QCAT or an adjudication decision registered in the Magistrates Court. It must be 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. A QCAT decision or an adjudication decision that has not been registered in the Court is not considered an enforceable money order.

What are the Eligibility Requirements for an Enforcement Warrant for Redirection of Debts?

To be eligible for an enforcement warrant for redirection of debts, there must be a debt owed, the debt must be presently due, and it must be owed by a third person. The debt cannot be future or contingent and must be a liquidated amount. The third person, including the State, must be within Australia.

How is an Application for a Warrant for Redirection of Debts Made?

The application for an enforcement warrant for redirection of debts requires an enforceable money order, an application form (Form 9), a draft warrant (Form 76), a statement in support of the application (Form 74), and service of the debtor and the third person. The application outlines the orders requested and includes the costs, judgment amount, and other relevant details.

What Factors Does the Court Consider When Issuing an Enforcement Warrant?

The Court considers several factors, including whether the enforcement debtor has adequate means to satisfy the order after deducting necessary living expenses and liabilities, whether the amount to be redirected would cause unreasonable hardship, and whether issuing the warrant aligns with the public interest in enforcing orders efficiently.

What is the Process for Serving an Enforcement Warrant for Redirection of Debts?

Once the Court grants the warrant, the judgment creditor must serve the warrant on the third person. This can be done through ordinary service methods like posting, leaving with a person over sixteen, or via email or facsimile if permissible. The warrant is valid for one year after issuance.

What Happens if There is Failure to Comply with the Warrant?

If the third person fails to comply with the warrant, they may face serious consequences, including contempt of court. The enforcement creditor may then have the same entitlement to enforce the debt as the enforcement debtor had.

How Can an Enforcement Warrant be Set Aside or Challenged?

An enforcement debtor or another affected person can apply to the court to set aside or stay the enforcement of the warrant at any time. This requires adapting the Form 9 application and providing supporting evidence through an affidavit.

What is Regular Redirection from Financial Institutions?

This is a type of warrant directed towards a financial institution for the redirection of regular deposits made by a fourth person into the enforcement debtor’s account. It requires similar application procedures as the standard enforcement warrant for redirection of debts.

Why is Legal Assistance Recommended in Enforcement Warrant Cases?

The process of obtaining and enforcing an enforcement warrant for redirection of debts involves several complicated steps and legal nuances. Therefore, it is strongly recommended to engage a qualified legal professional to navigate these processes effectively and ensure compliance with all legal requirements.

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