There are many ways to pursue a debt from someone, when
you've chased and they won't pay. Most commonly this
involves one or more of the following - issuing of Court
proceedings, issuing a statutory demand (where a company owes
money) and specialist adjudication.
In WA there are three main Courts, the Magistrates Court which
has jurisdiction to handle disputes up to a maximum financial limit
of $75,000, the District Court which deals with disputes between
$75,000 and $750,000 and the Supreme Court which deals with
disputes above $750,000 (and other equitable and statutory
Court Proceedings are generally used for matters where the debt
is likely to be disputed by the other party, and where the quantum
of the claim is unquantified to start with. While private mediation
and other methods are also readily available and recommended, the
Court processes involve mediation, or something akin to
At a mediation (or pre-trial conference) the Court officers,
including the parties' lawyers, are skilled in helping the
parties resolve the matter. If it can't be settled, then the
matter will be programmed towards a trial.
Court Proceedings can in some instances be costly, but the Court
has the discretion to award that the successful party's costs
be paid by the other party after trial.
One effective way to demand a debt owed by a company is to issue
a statutory demand. The debt owed by the company must be over the
sum of $2,000 and must be for an exact financial amount, which is
If the company fails to properly respond to the statutory demand
within 21 days after service, the company will be deemed to be
insolvent and the Court has the power to wind the company up.
If a company needs to defend a statutory demand, it is crucial
to remember that the 21 day period must be strictly adhered to.
Failing to respond to the demand, or applying to the Court to set
it aside, may ultimately result in the company being wound up and a
liquidator appointed, who will then take control of the assets and
There is special legislation governing payment claims in
relation to building projects, which contains strict deadlines for
making claims. If you are owed money in a building project, or owe
money, you should get advice on what you need to do to protect your
Every day HHG Legal Group through its Commercial Litigation and
construction law team help resolve these kinds of debt claims and
disputes. It is important to seek experienced legal advice in
resolving these matters.
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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