Debt Recovery -
General Divisions of the Local & District Court -
The Process

If the debt is over $60,000.00, it is outside the jurisdiction of the Local Court, and must be commenced in the District Court.

What follows, is a discussion on the Court process, if a defence is filed to a claim, by the Debtor. The process in the General Division of the Local Court is similar to that of the District Court, but, the discussion will focus on the Local Court.

The Court Process

Just like the small claims procedure in debt recovery, you file and serve a claim for the debt owed. However, that is where the paths split, once a defence is filed.

Upon the filing of a defence in either the Local or District Court, the Court will list a date for a call over.

There are lots of people with different titles in the Courts, click, if you would like to learn more about who they are and their role in the debt recovery process.

A call over, is formal, and is before a Registrar. Either party to the proceedings may appear. If one of the parties to the proceedings is a company, that person will require written authorisation to appear for the company. 

Friends or acquaintances cannot appear for you, or the Debtor. It has to be one of the parties, or, a legal representative on their behalf.

At the call over, either the claim is ready to proceed to hearing, or it is not. It may be that one of the parties hasn't provided information, that has been asked for. In that case, the Court on request, may make directions in this regard.

At any time during the court proceedings, either party may seek specific orders from the Court in regard to the provision of information by the other party, or for any other relevant order in regard to the proper conduct of the case.

The application for such procedural and other orders is done by filing a Notice of Motion with a supporting affidavit detailing what has happened and providing evidence why the Court should make the orders sought. Click to read more about the Court forms, including a Notice of Motion.

There can be several call overs, but eventually, it is ready to proceed to hearing. Unless,there is a very good reason not to, usually the hearing will be referred to arbitration. This is a hearing before a Court appointed Arbitrator.

Arbitration

The Arbitrator will co-ordinate with you or your legal representative, and the Debtor to find a mutually satisfactory date for a hearing. The Arbitrator may or may not make directions for the parties to prepare and serve their evidence by affidavit. 

In any event, you will need to prepare your case and have all your witnesses available in the debt recovery, to give evidence at the Arbitration.

The Arbitration is run like a Court hearing. You are the Plaintiff, and, you and all your witnesses give evidence by sworn testimony. This is called the provision of evidence in chief.

The Debtor or their legal representative can ask each witness questions in an attempt to challenge the evidence they are providing. This is known as cross examination.

After all your witnesses have given evidence, the Debtor does the same, and you can ask questions of the Debtor and their witnesses.

After all the evidence has been given, each party then provides submissions to the Arbitrator, who should then provide their decision or reserve the decision, to provide it at a later time.

Costs

The successful party is usually awarded costs. It won't cover all of your costs, and you usually would expect to get about 40 to 60% of what you have paid a solicitor, though you may get a higher return, depending on the agreement you have with the solicitor on their costs.

However, in debt recovery if the claim is under $20,000.00, there is a real restriction on the amount of professional costs for legal representation, that may be awarded. The maximum amount that may be awarded is 25% of the amount of verdict in your favour, together with the court fees that you have spent.

Re-Hearing

If either you or the Debtor is unhappy about the outcome of the Arbitration, a Notice may be lodged within 28 days of the Arbitrator's decision asking the Court for a re-hearing before a Magistrate in the Local Court, or a Judge in the District Court.

Either party can apply for a re-hearing, as of right. There does not have to be any grounds for a re-hearing application. When the Court receives the re-hearing application, it will be given a date for call over before the Registrar, where it will listed for hearing together with directions for the filing and service of evidence.

The Hearing Before A Judge Or Magistrate.

The Magistrate or Judge in the debt recovery,will run a hearing, just like an Arbitration. There will be evidence in chief, and cross examination of witnesses. Then, each party will make submissions on the evidence.

The Magistrate or Judge is not given any information about the Arbitration or the outcome, and neither you, or the debtor can provide any evidence, as to what happened at the Arbitration.

The hearing before the Judge or Magistrate is run as though it was the first time the case was heard. After the evidence and submissions have been completed, a decision will be handed down.

The successful party is awarded costs.

Appeal?

If either you or the debtor is unhappy with the Judges or Magistrate's decision, an appeal can be lodged with the Supreme Court, but, only on a question of law. 

You or the debtor cannot appeal the judges or Magistrate's findings of fact. Such appeals are very expensive, and should not be undertaken without proper legal advice and full consideration of the potential outcomes.

Finally

Debt recovery in the General Division of the Local Court, or in the District Court, is an area that requires specific knowledge and skills. Any mistake could mean the loss of the claim being made. 

If you haven't engaged a solicitor or lawyer to represent you, this is the time, when you really should think seriously about doing so.

Debt recovery can be difficult, and it requires the right planning, approach, knowledge and experience to maximize your prospects of collecting the money.

Let the professionals carry the burden.

Phone 02-4333 1690    Fax 02-4333 5144