Earlier in this series, we discussed how to enforce a payment in New South Wales through relatively informal processes including issuing a Letter of Demand and the small claims court. If these avenues prove unsuccessful, and you choose to move forward with legal proceedings, it is important to obtain legal advice regarding the appropriate court and the procedure to follow.

In NSW, the Small Claims Division of the Local Court hears claims for less than $10,000. The Local Court endeavours to achieve a just, quick and cheap resolution of the real issues in dispute between the parties. For matters exceeding $10,000 but under $100,000, the General Divison of the Local Court can hear your claim.

What is the Court Process to Enforce a Payment?

Firstly, you will need to lodge your claim by filing a document called a Statement of Claim (SOC) with the Court. The SOC will include:

  • Your name and address,
  • The debtor’s name and address, and
  • Information about the amount of payment owed to you, including interest.

What Can the Defendant Do?

The Defendant has 28 days to file a Notice of Defence from the date of service of the Statement of Claim. If the Defendant chooses not to file a Notice of Defence with the Court or applies to repay by instalments,  you can apply for default judgment.  If the Defendant chooses to defend the claim, the matter will automatically be set down for a pre-trial review before the Court.

Can the Matter Settle Before the Hearing?

The Court actively encourages parties to settle their matter among themselves at any time before the hearing. The pre-trial review is an informal review of the disputed facts and is usually conducted by a Magistrate. If either party fails to attend the pre-trial conference, and does not have adequate reason for doing so, the Magistrate may make an order against them.

What Happens at the Hearing?

If the parties fail to reach agreement during the pre-trial review, the Court will set a hearing date. To ensure a quick and fair trial takes place, the Magistrate will advise all parties about the evidence they will require. Parties present evidence in a comparatively informal manner than they otherwise would in the District or Supreme Court.

Although a lawyer attending the hearing or assisting you throughout the proceedings is not a strict requirement, they can provide invaluable assistance navigating the pleading, evidence and hearing stages.


The Magistrate will then hand down judgment to one of the parties. This generally includes an order for payment of the successful party’s costs. Once a judgment is made, the payment becomes a ‘judgment debt’ that can then be enforced. The Judgment Creditor is the person or company who is owed the money and the Judgment Debtor is the person or company who has been ordered to pay.

Common avenues available to parties to enforce a payment or judgment debt include:

  • Writs (either against land, of execution or against goods),
  • Garnishee orders,
  • Charging orders,
  • Liquidation (if the debtor is a company), or
  • Bankruptcy (if the debtor is an individual).

In our experience, liquidation and/or bankruptcy provide the most streamlined and efficient way of enforcing a judgment debt.

LegalVision has lawyers who can provide advice on debt recovery. Simply get in touch with LegalVision today at 1300 544 755. Our dispute lawyers are waiting to assist!

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