After you’ve won a court case and have received a favourable judgment, but the other side is yet to pay. What do you do? This is actually quite common in NSW. The losing party is required to pay or act on the court’s requests. This is where debt recovery through legal action comes in.
This article will explain what judgment enforcement is, how it works in NSW, and the different court orders you can use to enforce law through legal remedies.
What is judgment enforcement?
Judgment enforcement is the process of enforcing a court judgment. Once a judgment is made in your favour, the other party is to do what the court orders, such as paying money. If the other party does not do this, you can generally commence enforcement action or debt recovery procedures.
Legal proceedings for collection matters are generally heard in the same court that the proceedings were heard in. For example, if your case was originally in the Local Court, you will be back there to begin enforcement proceedings.
In NSW, limitation periods apply to the enforcement of judgments. For example, you generally have 12 years to enforce a judgment, after which you will be unable to use any enforcement methods.
Common court orders for enforcement
In NSW, options for enforcement are covered under section 106(1) of the Civil Procedure Act 2005 (NSW). The main legal remedies are writs, garnishee orders and charging orders. Some options will only work in certain cases and will not work in every single case.
Examination Order
Before you try to use enforcement options, you should consider applying for an Examination Order. Often you will not know the financial status of the other party and will need to make inquiries. These orders require the other party to appear before the court and disclose the financial status and holdings of the other party, and will give you a good idea of your prospects of success in enforcement.
Execution of writs
There are two general writs, writs against land and writs against goods. You will need to apply to the court for these writs, but if granted, the writ will allow the sheriff to go to the property and seize it or seize goods, which can be sold to provide the debt.
Garnishee order
A garnishee order allows for money to be taken directly out of wages or salary to be put towards paying the debt. This often involves taking money straight out of the bank account(s) of the other party, or requiring the other party’s employer to take a portion out of the wage or salary to be paid to you.
This is one of the most common methods of enforcement, considering it is cheap and easy to apply for and can be very quick too. It becomes problematic, however, when there are limited funds in an account to be garnished. Garnishee order must leave the other party with enough money to live, and cannot be used on shared accounts or trusts.
Charging Order
A charging order is similar to the above orders and writs but applies to stocks and shares, money in a financial institution, or equitable interests in a property. It charges the other party to the extent necessary to cover the costs sought.
Potential risks of enforcement
It is important to remember that enforcement is not free. You will still have to pay court fees when seeking to enforce a judgment. For instance, you will need to pay fees for filing writs or orders in the court. If you are considering enforcement, you should be prepared to subtract the costs of court fees from whatever possible amount you are seeking. Doing this will give you a more accurate picture of how much you could be getting back in a best-case scenario.
It is also important to remember that some methods of debt recovery are not always effective, and can be useless in certain circumstances. You are not guaranteed to get back everything from the other party, even if you enforce judgment on them. Some parties may simply be unable to pay or have no assets. There is a chance you will end up worse off than you were before commencing enforcement proceedings.
Don’t let unpaid judgments cost you more money
If you are unsure on which enforcement option to use, or whether you should even consider enforcement, contact our team immediately at Citilawyers. Our team has knowledge in judgment enforcement and can help you choose the most effective legal remedy to recover what you’re owed.
