Enforcing NSW Local Court Judgments

You’ve obtained a Judgment from the Local Court of New South Wales that requires the judgment debtor to pay you money. What can you do if they don’t pay?

Judgment debts are enforceable for 12 years from the date that the Judgment was entered. Generally a judgment debtor has 28 days to pay the Judgment debt. If they don’t pay you the Judgment debt or you don’t agree to an alternative payment plan, there are various enforcement processes you may be able to use.

1. Examination

If you aren’t sure of the judgment debtor’s financial position, a useful step may be to issue an examination notice. An examination notice is a court document filed with the Local court that requires the judgment debtor to complete a financial statement and/or produce certain documents in support. The statement includes information as to the judgment debtor’s current income, assets and liabilities.

If the judgment debtor has not complied with an examination notice you can then take steps to seek an examination order. An examination order requires that the judgment debtor attend court to answer the questions about his or her financial position and produce those documents requested in the examination notice.

2. Apply for a Garnishee Order

A garnishee order is an order from the court that directs a person (known as the garnishee) who holds money payable to a judgment debtor to pay that money to the judgment creditor. For example, this can be a bank or financial institution that the judgment debtor has an account with or even the judgment debtor’s employer.

To obtain a garnishee order a judgment creditor needs to file a notice of motion and supporting affidavit with the court setting out:

• the total judgment debt (including any interest or additional enforcement costs);
• the name and address of the proposed garnishee; and
• if the garnishee is a bank or financial institution, details of the relevant account.

Applying for a garnishee order can be an effective initial step at recovering part or whole of the debt, but there is always the possibility that there is insufficient funds in the account to garnishee.

3. Apply for a Writ for levy of property

A writ for levy of property is an order to have a sheriff attend the judgment debtor’s property for the purposes of seizing and selling the property, with the proceeds of sale being directed to the judgment creditor in payment of the judgment debt.

This similarly involves filing a notice of motion and supporting affidavit with the Court.

There are sheriff’s execution fees payable for attending the judgment debtor’s address but these costs can be recovered from the sale of goods. If the Sheriff is not able to satisfy the writ against the judgment debtor’s goods, they are required to give notice to the judgement creditor.

4. Issue a Bankruptcy Notice

Where the judgment debtor is an individual, the judgment creditor may be able to issue a bankruptcy notice for the full amount or any balance of the judgment debt provided it meets the statutory minimum. Currently, the minimum threshold for a bankruptcy notice is $10,000. By issuing a bankruptcy notice, the judgment debtor has 21 days from the date of service of the bankruptcy notice to pay the monies or to secure payment of the debt to the judgment creditor’s satisfaction. Failure to satisfy the requirements of a bankruptcy notice, can then entitle a judgment creditor to apply to the Court for a sequestration order against the judgment debtor.

5. Issue a Statutory Demand

Where the judgment debtor is a company, the judgment creditor may also wish to issue a statutory demand. A statutory demand is a demand made to the company for an outstanding debt under the provisions of the Corporations Act 2001 (Cth). The minimum debt amount for a statutory demand is $4,000. Similarly to a bankruptcy notice, the judgment debtor has 21 days from the date of service of the statutory demand to pay the debt or secure payment. If a judgment debtor fails to take any steps to secure payment of the debt, then a judgment creditor can make an application for the winding up of the debtor company in insolvency.

If you need help with enforcing a judgment debt, please contact Rostron Carlyle Rojas Lawyers on (02) 9307 8900 or [email protected].

The blog published by Rostron Carlyle Rojas is intended as general information only and is no legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog published. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.