Information procedures towards settlement
Defending Debt Recovery proceedings can be a costly exercise. In fact, the legal costs associated with defending proceedings may quickly exceed the actual debt. It is important that you attempt to negotiate a commercially realistic settlement wherever possible. If such attempts at settlement fail, you may not have any alternative but to proceed with litigation.
The court process
If you are served with a Statement of Claim (SLC) out of the Local Court, the value of the debt will not exceed $60,000. Where the debt is greater than $60,000, but not exceeding $750,000, proceedings will be issued out of the District Court of NSW. Where the debt is greater than $750,000, proceedings will be issued out of the Supreme Court of NSW.
Proceedings are usually commenced where you are served personally with an SLC or in the case of a company, the SLC is usually posted to the registered office of the company. Where a SLC is served, you usually have several options:
i. to pay the money that is claimed to be owed together with any legal costs which have been incurred by the other party in issuing the SLC; or
ii. to dispute the claim and file a Notice of Grounds of Defence and a Cross-Claim against the other party for damages that you may have incurred as a result of the conduct or action by the other party.
Unless you settle the matter, you will need to proceed to a hearing before an Arbitrator or Magistrate of the Local Court or Judge of the District Court or Supreme Court of NSW.
Prior to the hearing, it will be necessary to prepare the case by obtaining Statements from the relevant parties, issuing Subpoenas, Notices to Produce and the preparation of other documentation. There may also be a need to brief a barrister who will present your case in Court on the day.
What happens if I win the case/lose the case?
Should the Arbitrator determine the matter against you, you have the right to have the matter reheard by a Matigstrate within 28 days of the Arbitrator’s decision. This will involve the payment of a fee into Court of approximately $301.00 for an individual and $602 for a corporation. If you choose not to have the matter reheard within 28 days, you will be required to pay the amount awarded by the Court. The Judgment will include the legal costs the other side has incurred in taking the matter to Court.
August, 2006
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