Making A Claim In Debt Through Court
Background
Have you loaned money to a friend or family member and they haven’t repaid you? Maybe you are a business and a client hasn’t paid you for the goods or services you have provided. If you are owed money and have been unable to recover the debt, you can seek a remedy through the court system.
To do this, you will firstly need to ascertain exactly who you are bringing the claim against and verify the name and address of that person or business. If it is a business that owes you money, you will also need to determine the correct name of the legal entity and note its ABN/ACN.
It is also important to determine the value of your claim.
- If the debt is less than $12,000, it will be classed as a Minor Civil Claim in the Magistrates Court.
- If the debt is between $12,001 and $100,000 it will be allocated to the Magistrates Court, Civil (General Claims) Division.
- If the claim is over $100,000 you will need to file your claim in the District Court, Civil Division.
It is also important to note that there is a six-year time limit from the date the loss occurred for claiming monies owed through the court system.
Letter of Demand
If your matter is a Minor Civil Claim, before filing your claim in the court you may want to serve the other party with a Letter of Demand asking them to pay the money owed. The Letter of Demand needs to state exactly how much money is owed. The Letter of Demand should also note that if the money is not paid, legal action to recover the monies will be taken.
You may wish to send a Letter of Demand before starting formal court proceedings, as the other party may have simply forgotten or not realised that they owed you money. It is also advisable to enclose any copies of invoices or agreements with the Letter of Demand where applicable, in order to assist you in proving the debt.
The Letter of Demand must also include the date and state your contact details, including your name and/or business name, contact number, address, and email address.
Final Notice/Notice of Intended Claim
As an alternative to issuing a Letter of Demand for a Minor Civil Claim, you may wish to lodge a Form P1 Final Notice. If your claim will be in the Magistrates Court General Claims division or the District Court, a Notice of Intended Claim must be served on the debtor prior to filing a claim. A Notice of Intended Claim can be found on the CourtSA website and, similar to a Letter of Demand, states how much money is owed and provides your contact details as well as brief particulars about the outstanding monies.
Commencing a Claim
If, after 21 days, the debtor has not responded to the above notices or paid the monies owed, you may file a Claim with the Courts. Once this has been lodged, the debtor will have 21 days (plus time for posting) to file a Defence to your claim. If a Defence is filed within this time, the court will set a date for a Directions Hearing and the matter will proceed from there. If the Respondent does not file a Defence to your claim within 21 days, you can ask the court to grant a default judgment for the money owed.
Please note that the new Uniform Civil Rules 2020 for legal proceedings including the above came into effect on 18 May 2020. If you have been through a claim process prior to this date, the process may have changed. If you or your company needs assistance, or wants to know more about claiming a debt through the Courts, please contact our office on 08 8410 9294 or send us an email via this form.