Has a judgment been made in your favour, but the debtor has failed to pay the debt owed?
Sometimes, even when the courts have awarded a judgment in your favour, the debtor might be reluctant to pay the debt owed to you. In these situations, you may be able to apply to the court to enforce the judgment and force the debtor to pay the debt.
You have just won a legal battle against a defendant and a judgment for damages and costs has been made in your favour. However, even after the court has ordered the payment of the debt, the debtor or ‘enforcement debtor’ (the person who owes the judgment) has failed to make the payment. What can you do to force the debtor to pay the debt owed to you?
An enforcement proceeding is a legal proceeding that forces a debtor who has had a judgment made against them to disclose information about their financial situation in order to determine if, and how, the debtor may be able to repay the debt owed. Where a plaintiff instigates enforcement proceedings, the debtor will be required to appear at an enforcement hearing where they will be questioned about their financial position by the court in order to determine the best way to enforce the judgment.
If a registered money order (judgment) has been made in your favour against another party (the enforcement debtor), and the enforcement debtor has failed to repay the debt owed to you (the enforcement creditor), you can instigate enforcement proceedings by applying to the court to summons the enforcement debtor to an enforcement hearing.
If you are summoned to an enforcement hearing, it is highly advisable that you attend the hearing. If you choose not to attend, the consequences can be severe, including the court holding you in contempt of the court or even issuing a warrant for your arrest.
Rule 799 of the Uniform Civil Procedure Rules (Qld) (UCPR) provides that an enforcement creditor may commence enforcement proceedings, without leave (i.e. without seeking permission from the court), at any time within 6 years of the money order (judgment) being made.
In the event that the enforcement proceeding is sought after the expiration of the 6-year period, the court has discretion as to whether or not to grant the applicant leave to commence proceedings. Rule 799(4) of the UCPR outlines various factors that the applicant must establish in order to satisfy the court that leave should be granted (e.g. the reason for the delay and whether or not the applicant is entitled to enforce the order).
Before commencing enforcement proceedings, it is important to know the debtor’s financial position. The purpose of an enforcement hearing is to obtain information to facilitate the enforcement of a money order. The following steps must be followed in order to commence enforcement proceedings:
Step 1 – Statement of Financial Position
Note: Step 1 and 2 can be skipped for seizing and selling real property (e.g. a house, land or commercial building) that is held in the enforcement debtors name (whether exclusively, in joint tenants or tenants in common).
Before applying to the court for an enforcement hearing, you must send a Statement of Financial Position (UCPR Form 71) to the enforcement debtor and request that they fill out and return the completed form to you (or your legal representative) within 14 days.
The Statement of Financial Position essentially requires the debtor to disclose all relevant information regarding their assets and liabilities to establish the debtor’s financial situation.
Step 2 – Applying for an Enforcement Hearing
If the enforcement debtor fails to complete and return the Statement of Financial Position within 14 days, you can apply to the court to summons the enforcement debtor to an enforcement hearing by filing the following three documents in court:
- Form 9 – Application – This document asks the court to make an order to summons the enforcement debtor to an enforcement hearing and compel them to produce a number of documents relating to the debtor’s financial position at the hearing.
- Form 46 – Affidavit – This document requires the applicant (enforcement creditor) to swear that the amount you are owed is correct, as well as detailing the steps that the applicant has taken to recover the debt (including establishing that the debtor failed to return, or alternatively failed to complete, the Statement of Financial Position).
- Form 70 – Enforcement Hearing Summons – This document is the official court order compelling the enforcement debtor to attend the enforcement hearing and producing the required financial documents at the hearing.
Step 3 – Enforcement Warrant
If the debtor refuses to make payment, or the parties cannot agree on a payment to be made, the court can make an order to compel the debtor to make payment. The order made will depend on the debtor’s financial situation, and whether or not the debtor owns any assets. Once the debtor’s financial position is known, the applicant can apply to the court to issue an enforcement warrant by filing the following three documents:
- Form 9 – Application – This document asks the court to issue an enforcement warrant to the enforcement debtor.
- Form 74 – Statement in Support – This document requires the applicant to outline details about the judgment, the amount awarded and any applicable interest and other costs that the applicant requires the debtor to pay.
- Form 75-78 – Enforcement Warrant – Depending on the debtor’s financial situation and general assets, the applicant is required to fill out the most appropriate enforcement warrant in the circumstances (e.g. seizure and sale of property, redirection of debt. redirection of earnings, etc).
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If you have any questions regarding any of our services, or just need a question answered about enforcement proceedings, then make an enquiry and our Litigation team will be in touch with you as soon as possible.
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Enforcement proceedings can be complicated, particularly because the court (and the applicant) will be entitled to question the debtor about their financial position during the enforcement proceedings. Accordingly, it is important that you get proper legal advice to ensure your legal rights are protected and to ensure the other party does not unfairly gain the upper hand.
Whether you require legal representation to protect your rights in an enforcement proceeding against you, or you want someone to vigorously fight for you in order to ensure a judgment is enforced, Gibbs Wright Litigation Lawyers have the skills and expertise required to get the job done – and do it well.
Contact Gibbs Wright Litigation Lawyers today for a free initial consultation with one of our experienced litigation lawyers to explore your legal options.
Call Gibbs Wright Litigation Lawyers today about your enforcement proceeding matter.