Enforcing Monetary Judgments (WA)
After a monetary judgment has been obtained against a party, obtaining the benefit of the judgment can be difficult and stressful. Whether the monetary judgment was obtained after a trial or as a default judgment or summary judgment, the process the creditor must go through to enforce the monetary judgment is largely the same. This article explores what steps need to taken in enforcing monetary judgments in Western Australia.
Registration of monetary judgment
Sometimes the preliminary step of registering the monetary judgment needs to be taken. This is necessary where the monetary judgment being enforced was not made in the jurisdiction where the defendant lives or where the monetary judgment was awarded in a non-judicial forum like a commission or tribunal.
In these cases, the judgment will need to be registered with the appropriate court. Judgments for less than $75,000 are registered in the Magistrates Court, judgments for between $75,000 and $750,000 are registered in the District Court and judgments for more than $750,000 are registered in the Supreme Court. However, these are not hard and fast rules and it will depend on the circumstances of the case.
Enforcing Monetary Judgments: Means enquiry
The first enforcement action a judgment creditor commences against a judgment debtor is often a means enquiry. This is because a judgment creditor often does not know what assets the judgment debtor has to pay the monetary judgment.
At a means enquiry, the judgment debtor must declare its financial position on oath to the court and to the judgment creditor. This includes disclosing assets, income, liabilities and expenses. A judgment debtor will often be required to produce documentary evidence of its financial position as well, such as payslips, tax returns, motor vehicle registrations and certificates of title to properties.
Prior to the means enquiry, a debtor will also be required to complete a Statement of Financial Affairs and produce this to the court.
It is common for a judgment creditor and judgment debtor to sit down and attempt to negotiate an outcome before entering the courtroom for the means enquiry. Judgment creditors and judgment debtors will often agree to enter into a payment arrangement like an instalment order or a time for payment order. A court will not grant such an order if it believes that the judgment debtor lacks the capacity to comply with the order or that the order will cause unnecessary financial hardship to the debtor.
If a debtor fails to attend a means enquiry despite being summoned to do so, the creditor can apply for an arrest warrant so that the judgment debtor is compelled to attend the next means enquiry.
Other Enforcement Actions
The Civil Judgments Enforcement Act 2004 sets out a number of other ways that a judgment creditor may look for alternative ways to have their monetary judgment complied with.
Enforcing Monetary Judgments: Property seizure and sale order
One of the more common enforcement actions other than an instalment order or a time to pay order is a Property Seizure & Sale Order. This order is made where the judgment creditor identifies a valuable asset that the debtor owns and obtains the court’s permission to seize and sell it through the Bailiff. The property can be personal property or real property, though a complicated process must be gone through in relation to the latter.
Enforcing Monetary Judgments: Earnings appropriate order
Another enforcement action that can be sought is an Earnings Appropriate Order. This is where the court orders that part of the debtor’s earnings for a period of time be redirected to the creditor. However, this kind of order is only available if an instalment order was previously made, but the judgment debtor has defaulted on it and it has been cancelled.
Enforcing Monetary Judgments: Debt appropriate order
A debt appropriate order is another enforcement action that a creditor can apply for. This is where a court orders that money that is owed to the debtor by another party be paid to the judgment creditor instead.
What happens if a judgment debtor breaches an order?
If a judgment debtor has breached an instalment order or time for payment order, the judgment creditor can apply to the court for a default inquiry. If at the hearing, the judgment debtor had the financial means to pay the judgment debt and does not have a reasonable excuse for failing to do so, then the court can declare them to be in contempt of court and issue pecuniary penalties against them. In addition, the court may order new monetary orders in favour of the judgment creditor against the judgment debtor, such as a new instalment order or time for payment order.
Bankruptcy and Winding up Applications
If all else fails and a judgment creditor is convinced that the judgment debtor has the means to pay the debt but is being secretive or not telling the truth, they can consider making a creditor’s petition to declare the judgment debtor bankrupt, or where the debtor is an incorporated company, issue a statutory demand winding up the company.
However, both of these approaches carry significant risks and costs. It is advisable to obtain legal advice before taking either of these actions.
If you require legal advice or representation in any legal matter, please contact Armstrong Legal.