Debt Recovery - I am Owed Money, What Can I Do? - Part 3
Date: January 06, 2011
Authors: Scott Gray LPAB, Grad. Dip. Legal Practice
Welcome to our 3 part series on our guide to debt recovery. To read the other articles in the series please click on the following links
Part 3 – You have obtained Default Judgment
Like most people who are afraid of owning up to their responsibilities, some debtors will simply ignore the statement of claim you have served on them. To their detriment they hope that it will magically disappear and will be forgotten about but after 28 days has lapsed you can proceed to apply to the court for default judgment.
While default judgment does give you the right to enforce the debt it must be noted that your attempts to enforce that judgment can be stymied if the debtor decides to apply, by way of notice of motion, to have that default judgment set aside. Unfortunately, since the orders for default judgment are made in the absence of the parties a debtor will be given the opportunity to have their matter heard before a court so as not to be denied natural justice.
When filing a notice of motion to set aside default judgment a debtor must convince the court that they have a defence to the statement of claim, which has a reasonable prospect of success, and that there is a reasonable and explainable cause for not filing the defence within the 28 day period. The test here is that the debtor need not be comprehensive in their explanation but that they are simply, on the balance of probability, able to demonstrate a real objection to the facts contained in the statement of claim. This is because the court will, at all times, be very reluctant to deprive a person of their right to be heard in court, by reason of delay only, and any punishment for such delay is ordinarily imposed by awarding costs to the party so burdened by the delay.
If the court decides that the debtor has satisfied the conditions of reasonable defence and delay the matter will then proceed as if the defence had been filed within the 28 day limit. However if the court believes that the debtor has not satisfied the test noted above, you are free to continue to enforce the judgment to recover your money. This can be done by any number of methods including;
- Garnishee orders
- Writ for levy of property
- Bankruptcy / winding up orders
Each of these methods have merit but the appropriate method will depend on the facts and circumstances of each situation.
