Debt Recovery -
Small Claims in the Local Court

If it is not a small claim, it is placed in the General Division of the Local Court. Each division has its own path to the conclusion, if a defence is filed by the Debtor.

Below is an overview of the way the Court proceedings go when a claim is started in the small claims division of the Local Court,for debt recovery, and the debtor files a defence claiming he does not owe the money, or owes some other amount.

Small Claim - Court Proceedings

After you serve the Claim on a Debtor, called a defendant in the Court proceedings, the defendant has 28 days to file a defence.

If you would like to read how to serve Court documents, in the debt recovery process, click this link.

If a defence is filed, the Court will send out a notice of listing for a Pre-hearing Conference. This advises the date of the Conference, and it should also attach a copy of the Defence filed by the Debtor.

The Pre-Hearing Conference is held before the Registrar, and is very informal. The Registrar will probe to see whether a settlement of the debt recovery claim can be achieved. If no settlement can be achieved, the Registrar will then nominate a date for the hearing.

The Registrar will also provide directions for the filing and service of your evidence, which is usually required to be done at the same time the debtor has to file their evidence.

Generally, these hearings at most of the larger Courts, usually those with a District Court attached, or in the larger metropolitan Local Courts, are determined by Assessors. At the Courts where there is no Assessor, they are determined by the Magistrate.

No-one gets in the witness box. All the evidence is by way of written statements. Therefore, it is extremely important that the statements of evidence contain the necessary information to prove the debt is owed.

Statements of Evidence

When preparing you and your witnesses statements of evidence, in the debt recovery, it is important that the statements are presented properly. The statements of evidence should be in the following format:

• It should be started with the full name and address of the witness providing the statement.

• It should be in numbered paragraphs, with each paragraph providing details of a specific occurrence, leading up to and detailing how the debt arose and why it is owed.

• It should have the date it was prepared and be signed by the witness.

• You should also attach any relevant documents to the statement,and either place a number, or a letter of the alphabet at the top of the page of the the document which you attach.

• The attached document and its number or letter should be referred to in the body of the statement, at the relevant paragraph, and it should describe what the document is.

• The statement should then be signed and dated by the person who is making it.

• Don't forget to number the complete statement in the bottom right hand corner. When making submissions on a statement, it is easier to refer to a page number if you wish to bring a particular document to the Assessor or Magistrate's attention.

• You can put in as many witness statements as you like, as long as the evidence of the witness is relevant to the claim.

If you are unsure what evidence is needed to prove your case, in the debt recovery, you should seek legal advice. You don't want to lose your claim because you did not put in the right evidence!

The Hearing

The hearing itself is by the Magistrate or Assessor, who will read all the evidence that has been filed. If it is determined by an Assessor, you will normally have a nominated time for the hearing, and you won't have to wait around the Court very long.

If it is before a Magistrate, you could spend a long time at the Court. This is because there will be a lot of other matters, listed before the Magistrate. 

You are therefore at the whim of the Magistrate, as to when it will be heard. Assessors on the other hand, are there, just to do that specific job of hearing other claims, like yours.

The Magistrate or Assessor will, after reading the statements of evidence, let you and the Debtor make submissions on the claim and the evidence, and they might even ask a few questions. They will then make a decision.

The decision of the Magistrate or Assessor cannot be appealed on the facts that they find. You can only appeal against the decision on a point of law. Appeals on a point of law can be very expensive. Therefore, it is important that you get it right the first time, because you really only have that one time.

Costs

If you are successful, you will get an order for costs, which are any professional costs and any fees you have spent. However, the professional costs for legal representation in small claims are prescribed by the Court. The costs that are awarded are very minimal, and are determined by the value of the claim.

An award of costs will rarely cover the real cost of engaging a solicitor in this debt recovery process. If you decide to engage a solicitor, you should ensure you know what they will charge, and negotiate what they will charge.

Also,if you are unsuccessful, you may have a costs order against you to pay the debtor's legal costs. The Court is also limited in what can be awarded in costs against you.

Unless you have the knowledge and skills, to understand what is needed, you really should consider getting a Solicitor to at least check your statements to ensure they contain all the necessary components of evidence to prove your claim.

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

Legal Support Provided by: