Enforcing a Judgment (ACT)
It may become necessary to take steps to enforce a judgment if a monetary judgment has been made against a party but they are not complying with its terms. The methods used to enforce a judgment of a court in the ACT are set out in the Court Procedures Rules 2006. The same enforcement methods can also be used to enforce final orders made by the ACT Civil and Administrative Tribunal (ACAT) and interstate judgments registered for enforcement in the ACT. This article outlines the methods for enforcing a judgment that exist in the ACT.
A person who is owed money under a judgment is known as a judgment creditor and a person who owes the money is known as a judgment debtor. Before taking enforcement action, a judgment creditor must serve the debtor with a copy of the judgment and a notice about enforcement options. No enforcement action can be taken until seven days after this has been done.
The court will only issue an enforcement process after the appropriate document has been filed and the fee paid.
Enforcing a Judgment: Enforcement hearing subpoena
An enforcement hearing subpoena is a way of finding out a debtor’s financial status, including their source/s of income and any assets or liabilities they have. This information may be used for a seizure and sale order or a redirection order.
An enforcement hearing subpoena must be served on the debtor at least 14 days prior to the hearing date. The debtor must provide the court with a notice setting out their current financial situation no less than eight days before the hearing date.
At the enforcement hearing, the registrar can ask the judgment debtor questions and order them to show evidence of their financial circumstances. The registrar can order the debtor to pay the debt by instalments. Alternately, he or she can authorise the issue of another enforcement method such as an earnings redirection order or seizure and sale order. If the debtor does not attend the enforcement hearing, the registrar can issue a warrant for non-attendance by the debtor. They can also make an order for costs.
Enforcing a Judgment: Seizure and sale order
A seizure and sale order empowers a Sheriff’s Officer to seize the debtor’s goods and auction them to recover the monies owed. There is a fee for issuing this order.
A Sheriff’s Officer will attend the address nominated and try to seize the debtor’s assets. The Sheriff may seize goods that belong to the debtor personally but they may not seize goods that are in any other person’s name or goods that are encumbered (such as leased goods). If the Sheriff cannot find goods outside the debtor’s premises and is refused entry to the premises, the court may issue a warrant for entry.
Once the goods have been seized, the creditor will have to pay to the court an amount of money to cover the expenses that have been incurred by the Sheriff in the seizure and sale of the goods. This cost is recoverable from the debtor.
An order for seizure and sale can remain in force for one year from the date of issue by the court.
Enforcing a Judgment: Redirection Order
A redirection order redirects monies such as the contents of bank accounts (either as an one-off amount or as a continuing claim), salary, wages or commissions to the creditor for payment of a debt. A redirection order for a debtor’s salary or wages lasts until the debt is paid or until the debtor ceases their employment. The court may also redirect monies owed by a third party to the debtor to be paid to the creditor instead. An example of this is where the debtor is owed money for work they have done.
A creditor may request that payments made under a redirection order be made straight to them. This must be requested at the time the redirection order is served. The person served with the redirection order must notify the court and the debtor before making payment.
After the order is served on the other party, a copy must be served on the debtor. A debtor may apply to the court at any stage of the proceedings to vary or revoke a redirection order by filing an application in proceedings.
Any party to a redirection order may apply to revoke or vary the order on the grounds of exceptional hardship. A copy of the application will be made available to the creditor. The debtor may also make an offer to pay the judgment debt by instalments at this .
The person required to take money from a debtor under a redirection order may keep an amount as a fee for complying with the order. This amount is taken out of payments due to the creditor.
Application to pay by instalments
A debtor may apply to the court at any time to pay the debt owed by instalments. The registrar of the court can grant or refuse a request after considering their financial position.
If the application is granted, this will stay the enforcement action. A copy of the application will be provided to the creditor.
If the application is refused, the debtor may appeal the decision to a magistrate. The magistrate will rehear the application and decide whether to confirm or vary the Registrar’s decision.
If you require legal advice or representation in any legal matter, please contact Armstrong Legal.