Being a small business owner in Victoria can be a hard but rewarding job. However, you may come into disagreements with other businesses or individuals. In some circumstances, the people that you are in a disagreement with may choose to take legal action and sue you. If this happens, you will be served with legal documents. Each state has different laws on what to do if you are served. This article explains what you should do if you are served in Victoria and sets out your options to respond to the documents.
What is Service?
Service is a legal term for delivering documents to a specific person or business. It’s a term that courts rely on to confirm that legal documents have been delivered to a party in a proceeding. This then allows the court to commence legal proceedings formally. The proceedings may be against you individually, or you may be joined to a claim due to your involvement in a particular business dealing.
A service processor usually completes the service. They will turn up at your registered place of business and ask you to confirm your identity. If you refuse to identify yourself, the service processor can simply leave the documents at your registered place of business. This includes sliding the documents under the front door.
If you are a sole trader, then documents must be served personally. However, if you continually avoid service, a court may order for the completion of service by:
- leaving the documents at your known home address;
- sending them by email; or
- sending them via Facebook.
What Are the Consequences of Being Served?
Either you personally or your business are being sued. This depends on the business structure that you have chosen. If you’re operating as a sole trader, you will be sued personally. This means that if the court proceedings do not go in your favour, your personal assets may be seized. If you’re operating as a proprietary limited company, then generally only the assets of the business will be at risk.
Even if you have been served, you will not necessarily need to go to court. In many cases, it will be possible to settle the matter outside of court and avoid the expensive and drawn-out court process. Depending on your circumstances, avenues may be open to you that include:
Lawyers can assist you to negotiate a resolution formally. This means that they will communicate to the party on your behalf and reach a settlement agreement that is acceptable to you and your business.
Do I Need a Lawyer?
The fact that legal proceedings are already underway means that engaging a lawyer is a good idea.
Part of the work of the legal team will be to draft your response in the correct legal terms. If applicable, they may even file any claim you may have against the other party.
Even if you can negotiate a resolution on your own, you should nonetheless engage a lawyer to draw up a deed of settlement. This ensures that the parties are formally bound to their agreement. If the agreement is not formally in writing, you may have difficulty enforcing it later on.
Can I Refuse Service?
It’s not a good idea to try to evade the service of court documents. If someone has commenced proceedings against you, they will find a way to serve you. Court documents can be served by leaving them with you or by mailing them to your office. Therefore, refusing to accept the documents won’t do you any good.
Once served, you (or the company) will usually have 21-30 days to file and serve a notice of defence. In some Victorian courts, you will first need to file a notice of appearance within 10 days of being served. The time period for filing your defence will only run from the day you file the notice of appearance.
What Happens if I Just Ignore it?
Whatever you decide to do, do not ignore court documents. If you do not file and serve a notice of appearance or a notice of defence within the required time, the court may order a default judgement against you or your company. This will mean that you will have to pay the amount specified in the judgment. You will also have to pay the other side’s legal costs and any interest on the claim.
If this happens to you or your small business, you need to act fast. Failing to set aside a default judgment will have a negative impact on your credit rating and will be difficult to remove from your credit report.
Being served with legal documents means there is a legal claim against you or your business. If another party has served you, you should seek legal advice. You should not try to avoid service nor should you ignore the documents that you have been served.
The claim against you may have no merit at all or it may be difficult to defend. These are the kinds of decisions that litigation lawyers are experts at figuring out. If you have been served with documents, contact LegalVision’s litigation lawyers on 1300 544 755 or fill out the form on this page.
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