NEWS

Enforcement of Judgments

Once a judgment is obtained against a party who fails to pay the judgment sum, various enforcement options are available. Although these options may vary slightly between states and territories, the principles are generally consistent.

  1.       Examination Hearing (NSW) / Oral Examination (VIC) / Enforcement Hearing (QLD)

Often a first step in enforcement is the examination of the judgment debtor’s financial situation. The debtor is required to appear in Court with relevant documents, such as bank statements, payslips, tax returns, and utility bills, to provide a clear picture of their financial position. During the hearing, the debtor is questioned about their assets, income, debts, and liabilities. In some jurisdictions, the Court may issue an instalment order, allowing the debtor to repay the judgment in instalments. If a debtor does not attend an examination hearing, the Court may (on application) issue an arrest warrant for the debtor to be arrested and compelled to attend an examination hearing.

  1.       Writ for Levy of Property (NSW) / Warrant to Seize Property (VIC) / Warrant for Seizure and Sale of Property (QLD)

This enforcement method requires a Court Order and involves a Sheriff attending the debtor’s address to “attach” their assets. Attaching an asset means seizing or securing it to satisfy the debt. The Sheriff may tag a judgment debtor’s valuable assets, such as vehicles or other valuable items, and release them if the debt is paid or sell them to recover the owed amount. Certain essential items, such as basic household goods, clothing, furniture, and tools of trade, cannot be seized.

  1.       Garnishee Order

A garnishee order allows the creditor to recover the debt directly from the debtor’s wages or bank account. The challenge with this approach is identifying the debtor’s employment or bank account details, which are often revealed during the examination hearing.

  1.       Bankruptcy or Liquidation

If the debtor is an individual, steps can be taken to have them declared bankrupt (and a trustee appointed to manage their estate). If the debtor is a company, liquidation can be pursued (and a liquidator appointed to manage the assets of the company). This process is ordinarily a last resort and may not be very commercial when balancing costs vs the amount you are seeking to recover. In bankruptcy and liquidation, a trustee or liquidator (respectively) has extensive powers and so this can be a valuable step in appropriate circumstances.

 

About me (Ashley Chidiac) – Being behind a screen at work all day, I have decided to swap out my favourite detective tv shows and pick up a book instead so I am always open to new book suggestions!

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