Building Contracts – recovering undisputed debts …

As soon as you identify a bad debtor, it is important that you take immediate action to give yourself the best chance of getting your money in your bank account where it belongs.

If you are unsure as to whether or not there is a dispute, you may need to get legal advice on what to do to get paid.

If there is no genuine dispute and the debtor continues to refuse to pay, you can apply to a court for a summary judgment.

• Summary judgment is only available where a debtor has no reasonable defence to a claim for payment.   Where a payment claim has been issued and not paid, or where a payment schedule has been provided and not paid, the unpaid amount of the payment claim or payment schedule becomes a debt due and recoverable.  Provided the payment claim was issued correctly, the client will have no defence to a claim for recovery of that amount and you can ask the Court to fast-track your claim.
• A summary judgment process is started by filing with the court (and serving on the other party) a statement of claim (the facts on which you claim you are owed money), an application for summary judgment (the facts on which you claim there is no defence), and a supporting affidavit (evidence given on oath in support of the facts of your claim) plus other formal documents.
• If you want to make use of the summary judgment process, it is important that you get all of the right information filed at the beginning.  If the Court thinks that there might be a defence, or if you have missed something in your documents, the claim can be put back onto the normal track and be dealt with as if there were a defence to it.  It pays to get legal advice and assistance at the beginning as you only get one shot at seeking summary judgment of your claim.

If the debtor is a company, you can serve a statutory demand on it where there is no dispute and the amount owing is over $1,000.  If you serve a statutory demand on a company and it fails to comply with its terms, it is deemed to be insolvent and you can file proceedings in the High Court to have the company liquidated and its assets divided amongst creditors.  The requirements for a valid statutory demand are strictly enforced.  It pays to get legal advice from a debt collection professional so you get all the processes right.