In civil cases, where the dispute is often about unpaid debt, it can be disappointing for the winner not to get a juicy cheque at the end, especially when they are likely to have incurred significant costs in getting to this point.
I always like to explain it to my clients – debt collection in the civil court jurisdiction is a two pronged approach. You need to get the judgment and then you need to enforce it. Unfortunately, a judgment is only part of the battle.
The Civil costs enforcement regime in the District Court has recently undergone a raft of changes that should make it easier for creditors to seek enforcement of debts owing. The Civil costs enforcement regime allows for a variety of methods, short of bankruptcy where a judgment debt can be recovered. The judgment creditor is responsible for instructing the Court to carry out enforcement.
Cost effective options include attachment orders. This is a court mandated amount that is deducted from the debtor’s income and paid to the creditor. If the debtor is co-operative this can be agreed after the decision is reached by the Tribunal or District Court. The details will then be recorded in the judgment or order given.
If the debtor is not co-operating but you are aware who their employer is or know that they are receiving a benefit you can directly apply for an order stating the amount you wish to be paid in either a percentage of income or a set amount paid weekly, fortnightly or monthly.
Interest can be charged. One of the biggest problems creditors face is not being able to locate the debtor. You can now make a confidential address request to the Ministry of Justice who may be able to locate the debtor for you, using their information they hold.
You cannot enforce an order or a judgment more than 6 years old. Debts go stale and cannot be pursued except with leave of a Judge.
It is well worth getting some proper advice in this area and for businesses to have established debt collection methods and protocols.
Rachel Scott is an Associate in the Court & Disputes team at Norris Ward McKinnon. Contact Rachel at [email protected]
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