Commercial Disputes

FAQ

Commercial Litigation

1. I have a claim against a company that has gone into liquidation/voluntary administration. What happens now to my claim?

A company goes into voluntary administration when it’s insolvent and cannot trade any more. An administrator is appointed to investigate the company’s affairs and to distribute funds as fairly as possible to creditors when the company is liquidated.
Your claim depends on whether you are a secured or unsecured creditor.

An unsecured creditor cannot claim against the company without the administrator’s consent or the court’s permission and it is possible that you will not be able to recover anything from the company.

If you have a claim against a company in liquidation or voluntary administration, you should lodge a Proof of Debt with the administrator or liquidator, who should then keep you updated with the progress of the claim and whether it is likely you will get your money back.

If you suspect that the directors of the company have breached the duties they owe to the company as directors, you might consider requesting that the administrator or liquidator investigates those possible breaches.

It is important to talk to Carroll & O’Dea Lawyers before taking these matters further.

2. I have a judgment for someone to pay me an amount of money. Now what?
As a first step, you should write to the person or company that owes you money, called the judgment debtor, and request that they make payment of the judgment amount to you by the time specified in the judgment, which is usually 28 days.
If the person or company doesn’t make the payment, you have a range of legal remedies that Carroll & O’Dea Lawyers can assist you with. These include obtaining an order to garnishee the person’s wages; an order to get property returned such as a car or furniture, and possibly commencing bankruptcy proceedings against an individual. You will need to get legal advice as to which remedy is open to you.
It is important to note that the court can make an order permitting the debtor to pay the amount by instalments, without seeking your consent. In most cases, you have 12 years to enforce a judgment made in New South Wales.

3. The Court made an order that the other party pay my costs. How do I claim my costs?

The first thing to know is that the costs awarded to you are unlikely to be your actual legal costs. Usually, you will be able to claim somewhere from 60% to 80% of your legal costs.

Lawyers will generally advise you to attempt to agree your costs with the other side however if you can’t reach agreement, you will need to have the costs assessed.
Unfortunately, the costs assessment process is effectively another court proceeding. You will need to prepare a Bill of Costs, which is an itemised list of costs, and this is served on the other party to respond. Usually a Cost Assessor will be appointed who will make a recommendation to the court.

The court will then make a determination. This is effectively a costs judgement, which you can legally enforce.

4. I have a monetary judgment against someone who owns a property. Why can’t I put a caveat on their property to protect my judgment?

Gaining a court judgement for payment from debtor does not entitle you under the law to put a caveat over their land.

Further, if you lodge a caveat without a good reason you may face court action by the owner of the property that could lead to you paying damages.

5. An individual owes me money and will not pay me. How do I make them bankrupt?

To make someone bankrupt, you must prove to the court that the debtor has committed an act of bankruptcy. The most common act of bankruptcy is a failure by the debtor to comply with a Bankruptcy Notice.

In essence, a Bankruptcy Notice requires the debtor to pay you the money within 21 days after the notice is served. If they don’t, you can petition the Federal Circuit Court of Australia to make a sequestration order declaring the debtor bankrupt.

It is necessary to apply to the Australian Financial Security Authority (AFSA) for the issue of a Bankruptcy Notice. A filing fee is payable upon making an application to AFSA for a Bankruptcy Notice.

If the debtor ultimately becomes bankrupt, a Registered Trustee will be appointed to manage their estate and distribute any proceeds of their estate to their creditors.

6. How long do I have to commence legal proceedings?

In most types of claims there are limitation periods which stipulate the time within which legal proceedings must be commenced.

What limitation period is applicable depends on the nature of the legal action and the state or territory where the events in dispute occurred.

Carroll & O’Dea Lawyers’ commercial litigation team can help you with the right information in your case.

7. What are the stages of legal proceedings commenced in a Court?
Filing an originating process generally legal proceedings are commenced by filing an originating process, such as a statement of claim or a summons, with the relevant court, such as the Local, District or Supreme Courts, or Federal Court of Australia. On filing the originating process, a filing fee will be payable in the relevant court.

Service of the originating process
An originating process must be served personally on the other party unless their legal representative is instructed to accept the originating process on behalf of their client.

Defence
In NSW, a defendant must usually file and serve a defence within 28 days of service of the originating process. A defendant may make a request to the plaintiff for further and better particulars of the plaintiff’s claim.
Getting the matter ready for hearing

The matter will be listed in court for what is generally known as a directions hearing. There are likely to be several directions hearings during a matter leading up to the final hearing. At directions hearings, the court will make orders providing for the steps that need to be taken in the proceedings to get the matter ready for the final hearing.

The orders made by the court will relate to matters such as the preparation of lay and expert evidence, the disclosure of documents by each party, setting a date for mediation and making orders relating to matters for the final hearing such as written submissions and court books.

Interlocutory Applications
During legal proceedings, one party may make what is known as an interlocutory application for interim relief against another party. These may include a summary dismissal of the proceedings against the plaintiff or a summary judgment of the proceedings against the defendant on the basis that the defendant has no defence to the claim.

Your Carroll & O’Dea lawyer will take you through other legal opportunities at this point in the proceedings.

The final hearing
A judge or magistrate will preside over the final hearing of the matter. At the final hearing all parties are afforded the opportunity to give evidence, call witnesses to give evidence, cross examine the witnesses of other parties, tender documents and make oral and written submissions to the court. At the conclusion of the final hearing, judgment is generally reserved and the judge or magistrate will deliver a written judgment at a later time.
8. Is there any way to settle a dispute outside of Court?
Yes. If you wish to settle a dispute prior to the commencement of legal proceedings or even during the course of legal proceedings, the following options are available to you:

Negotiation
To avoid the time, expense and uncertainty of legal proceedings, parties can engage in negotiations in person or in writing to attempt to resolve the dispute. Such negotiations can take place at any time prior to or during legal proceedings.
Alternative Dispute Resolution (ADR)
ADR is a process whereby an independent person assists parties to a dispute to resolve the issues in dispute between them.. The main methods include the following:

Mediation
Mediation can be arranged at any time between the parties to a dispute and the parties can also appoint a mediator by agreement. The mediator leads the parties through a structured discussion with the aim of facilitating an agreement.. Unless the parties agree to a settlement, mediation is not binding on the parties. Generally the costs of mediation are shared equally between the parties.

Arbitration
Arbitration is an Alternative Dispute Resolution process managed by an arbitrator and can be used as a final and binding means of dispute resolution.. During Arbitration, the parties to the dispute present the facts and their points of view to the arbitrator. The arbitrator will then make a decision. Arbitration is usually a much more formal and structured process than mediation and is common in building and construction disputes.

Expert Determination
Expert Determination is an Alternative Dispute Resolution whereby an independent expert, with recognised expertise in an issue in dispute between the parties, assists the parties to find a resolution by making a binding determination in relation to an issue in dispute. The parties will usually have to pay a non refundable administration fee for the appointment of the expert.

9. Can I appeal a first instance judgment and if so, what is the process?

The process for bringing an appeal against a court decision varies between the courts and tribunals. In some courts, you have to ask for the court’s leave to bring the appeal.

Appeals are usually heard in a higher court; for example, appeals from the Local Court in NSW will usually be heard in either the District Court or Supreme Court. Appeals from the latter two courts are generally heard in the NSW Court of Appeal.

The grounds upon which an appeal can be brought also varies between the courts. Such grounds for appeal include:
• Lack of jurisdiction
• Denial of procedural fairness
• Errors of law
• The interests of justice require that the first instance judgment be overturned.
Time limits for bringing appeal proceedings also vary. Generally, you have 28 days after the first instance judgment to file the appeal with the appropriate court.

10. How is evidence given in Court proceedings?

In the first instance, a witness in legal proceedings will give evidence in writing by way of affidavit or statement. The parties usually serve the written evidence of the witnesses on the other party to the proceedings in accordance with a timetable set down by the court and before the final hearing of the matter.

In the event that you have given evidence by way of affidavit or statement, the opposing party may request that you attend the final hearing to be cross examined by the legal representative acting for the opposing party. If you are not required for cross examination, your written evidence may be able to be tendered as your evidence without the need for you to give oral evidence at the final hearing.

The contents of these FAQs do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking action based on these FAQs. Contact Carroll & O’Dea Lawyers today to discuss any aspect of the information provided above.