CL T3 A1 Deliciozo Enforcement Memo
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Australian National University *
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1968
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Law
Date
Jan 9, 2024
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docx
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Deliciozo Coffee Supplies Pty Ltd v Daisy Lim (t/as Top Grind Café)
Good morning supervisor,
Please see responses to client questions and my recommendation for enforcement of the default judgement.
1.
I’m conscious that I continue to incur legal fees chasing this debt. What is the most cost-
effective method to recover the judgment debt and what is the procedure for that method?
The most cost-effective method is likely to be a Garnishee Order, which can be applied for over Daisy Lim’s bank accounts but also over the rent due weekly on the commercial premises owned by her. There is no fee for filing a motion for a garnishee order and the $13.00 weekly administration fee which can be claimed by the garnishee is not taken out of the debt amount.
In order to effect this method of debt recovery, you must file a notice of motion for a garnishee order (form 69), along with an affidavit in support. Once this has been completed a
garnishee order for debts will created (form 70) and copies are to be served on the garnishees. The order will then be compelled to pay the money owed to the debtor directly to you. 2.
A business owner friend told me that a statutory demand is the best way to collect debt. What is this, and can we use this method?
A statutory demand is a formal demand made by a creditor to a debtor corporation under s 459E of the Corporations Act 2001 (Cth). The debt must satisfy statutory minimum (which is $4000), and should the company fail to pay the demand it is presumed to then be insolvent.
Unfortunately, as Top Grind Café is operating under the ABN of Daisy Lim and not incorporated, it is not possible to send a statutory demand. They can only be sent to incorporated companies.
3.
I see that there are three real properties listed in Daisy‘s list of assets. Can we sell any of them to collect the debt?
Under section 112 of the Civil Procedure Act 2005
(NSW) (CPA), there are circumstances in which real property can be sold in order to recover the amount in the default judgement. As per UCPR r 39.6(3) execution however, is contingent on either consent by the judgement debtor or the satisfaction by the sheriff that the land be sold before other property so as to reduce the hardship to the judgement debtor. Once steps have taken to enforce the writ, a notice must be sent to the debtor advising of the details and that they are entitled to apply for an instalment order under section 107 of CPA. If they do not get an instalment order, then the sheriff is able to sell the land.
4.
I recall your previous advice that we charged interest on the debt in the Statement of Claim. Will interest continue to accrue until we collect the debt?
In regards to interest on the debt in the Statement of Claim, it does not stop accumulating after the judgement has been entered. Following the judgement interest is calculated at a prescribed rate as per section 101 of the Civil Procedure Act 2005
(NSW). The court can also award interest under section 101(4) of the CPA under an order for the payment of costs.
This prescribed rate is set under UCPR r 36.7(1), which at this time is (b) ‘in respect of the period from 1 July to 31 December in any year—the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced’.
Recommendation for Enforcement of the Judgement
Having considered the property and asset pool held by Daisy Lim, I would recommend a writ for the levy of property with a view to the seizure and sale of land. Specifically, I would recommend a writ for the levy of property over the unencumbered and solely owned business premises listed as asset number 3 in the table.
Given that Daisy Lim’s minor assets do not collectively cover the sum of debt, the levy of property would allow the debt to be recovered in one go and by one form rather than through multiple means. While there are costs, including those incurred by the Sheriff’s office, this does seem to be the most efficient method of recovering the full sum. This method does require either the creditor to consent or the sheriff to be satisfied that this method will minimise hardship to the debtor. However, given Daisy Lim does not solely own any other real property and her other assets would not satisfy the full amount this does seem a reasonable conclusion.
It should be noted that Daisy Lim can apply for a repayment plan in response to this, however if a payment plan is agreed this also guarantees the repayment of the debt amount.
I would consider as a back up, a garnishee order over the rent payable on the commercial property. The costs in using this method of enforcement are low, however it significantly draws out the length of time it would take for the full amount to be recovered. So, while it makes a good back up, the preference should be a writ for the levy of property.
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