As a first step, you should write to the person or company that
owes you money (the judgment debtor) and request that they make
payment of the judgment amount to you by the time specified in the
judgment (which is usually 28 days).
In the event that the judgment debtor does not make payment of
the judgment amount to you, steps can be taken to enforce the
judgment. Methods of enforcing a judgment include the
Examination Notice - a document served on the
judgment debtor that requires them to answer questions regarding
their financial circumstances and provide copies of documents to
the judgment creditor.
Examination Order - if the judgment debtor
fails to provide sufficient answers or documents as specified in
the Examination Notice, then you may make an application to the
Court for an Examination Order directing the judgment debtor to
attend Court for examination under oath as to their financial
capacity to satisfy the judgment debt.
Writ of Execution - authorises and directs the
Sheriff's Office to attend the judgment debtor's address,
seize property owned by the judgment debtor and sell it at auction
to satisfy the judgment debt.
Garnishee Orders - an order directing that
money belonging to the judgment debtor and held by some other
person (for example, a bank or employer) be paid in satisfaction of
the judgment debt.It may also be possible to commence bankruptcy
proceedings (against an individual debtor) or serve a
Creditor's Statutory Demand for Payment of Debt (against a
company) to enforce a judgment debt.
Before you can commence bankruptcy proceedings, the judgment
debtor must commit an 'act of bankruptcy'. The most common
act of bankruptcy is a failure to comply with a Bankruptcy Notice.
An act of bankruptcy can occur when a Bankruptcy Notice is served
on the judgment debtor and the judgment debtor fails to make
payment of the judgment debt within 21 days after the date of
Once the judgment debtor has committed an act of bankruptcy by
failing to comply with the Bankruptcy Notice, the judgment creditor
can file a Creditor's Petition in the Federal Court or Federal
Circuit Court, seeking a Sequestration Order declaring the judgment
debtor bankrupt. Once a sequestration order is made, a Trustee in
bankruptcy is appointed to manage the bankrupt's estate and the
judgment debtor's assets are distributed to creditors according
to priority. Bankruptcy generally lasts for a period of three years
but can be extended in certain circumstances.
Creditor's Statutory Demand for Payment of
A Creditor's Statutory Demand for payment of a debt may be
served on the registered office of a judgment debtor company. In
the event that the judgment debtor fails to satisfy the debt (or
make an application to set aside the Creditor's Statutory
Demand) within 21 days of issue of a Statutory Demand, an
application may be made to the Court for the company to be wound up
on the grounds of insolvency. A liquidator will then be appointed
to conduct preliminary investigations into the affairs and conduct
of the Company.
In the event that the company makes an application to the Court
to set aside a Creditor's Statutory Demand, it will have to
show the Court that there is a genuine dispute about the amount or
existence of the debt (for example, it has an offsetting claim) or
that there is a defect in the Statutory Demand. There may be costs
consequences where you serve a Creditor's Statutory Demand on a
company which is subsequently set aside on the basis that it is
defective or where there is a genuine dispute about the amount or
existence of the debt.
It depends on the circumstances of each individual case and each
judgment debtor as to the best method of enforcing a judgment debt.
Of course, if the judgment debtor does not have any assets, it may
be futile to enforce the judgment. In New South Wales, a judgment
creditor generally has a period of 12 years from the date of a
judgment to enforce it, so it may be worth keeping track of a
judgment debtor, in the event that their circumstances change.
It is also important to remember that in New South Wales,
interest generally continues to accrue on a judgment debt from the
date it was entered to the date it is ultimately paid (in
accordance with the Uniform Civil Procedure Rules).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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