Get in quick or pay up – cashflow – new Court rules

John had been operating his business successfully for many years, but had recently experienced some cash flow problems.  This was a flow on effect from his debtors suffering from the current economic climate.  He had attempted to give them some leeway, but his own creditors were not as accommodating.  One of his creditors began debt recovery processes against John in the District Court.  Unfortunately for John, being unaware of the new District Court Rules, he failed to provide a response to the creditor’s claim on time and a Court judgment was obtained against him.  This meant unnecessary Court costs were incurred and his credit rating was affected.  Court judgements, once sealed, are published in the Mercantile Gazette and are also recorded against the individual’s credit file by Veda Advantage (formerly Baycorp). Previously the various time limits were 30 working days but these have been shortened to 20 working days from 14 June 2012.

To avoid being caught out like John, you need to read this …

New processes for debt recovery have been implemented in the District Court.  They are designed to speed up the Court process and make getting Judgment easier where no defence is put forward.  This includes situations where the required steps are not taken on time.

The following procedures are now applicable:

1. A Notice of Claim is filed and served on the Defendant.
2. The Defendant then has 20 working days to file and serve a response.
3. If no response is received from the Defendant within 20 working days then Judgment by default can be obtained.
4. If a response is received from the Defendant then the Plaintiff has 20 working days to file and serve an “information capsule”.  This is the term used to refer to all documentation relevant to the claim.
5. The Defendant then has 20 working days to file and serve their information capsule.
6. If the Defendant fails to provide an information capsule then Judgment by default can be awarded.
7. If the Defendant files and serves an information capsule then the Plaintiff has 20 working days to file and serve a Notice of Pursuit of Claim.
8. At this stage the Court can either direct the parties to attend a Short Trial or Judicial Settlement Conference.  The latter is a conference held between the parties and the Judge.  It is closed to the public and is confidential to the parties involved.  It is intended to provide the parties with an alternative method of resolving the dispute in a fair and timely manner under the guidance of a Judge.  All issues between the parties will be explored and the Judge will attempt to assist the parties to reach a settlement of the dispute. 
9. If no settlement is reached between the parties at the Judicial Settlement Conference the Judge will then allocate a hearing.  This may be a Short Trial, Simplified Trial, Summary Judgment or a Full Trial which involve increasing degrees of complexity for more serious matters.

What should you do if you find yourself pursued?

If Court proceedings are issued against you, act quickly.  If you are unsure about how to proceed, obtain professional advice.  Whatever you do, do not wait and get caught out like John.