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.
Court Proceedings
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 matters).
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 mediation.
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.
Statutory Demands
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 not disputed.
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 liabilities.
Adjudication
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 position.
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.
