Civil Procedure Act, 2005
LOCAL COURT: AN OVERVIEW

The basic object of the Civil Jurisdiction of the Local Courts is to create a simple legal mechanism to collect debts and to bring claims for monetary compensation for damages. A claim to recover debts or compensation of up to $60 000.00 can be made in the civil jurisdiction of the Local Court using the procedures set out in the Civil Proceedure Act, 2005. This civil jurisdiction of the Local Court is divided into two divisions:-
- the Small Claims Division which deals with simple claims of $10,000 or less; and
- the General Division which deals with all claims over $10,000 and some of the more complex matters under $10,000.
The court can deal with claims over $60,000 up to $72,000.00 if both parties agree.

Civil procedure flows through three distinct phases:-

Phase One: Establishing the Claim (exchanging information);

Phase Two: Obtaining a Judgment (winning the case);

Phase Three: Enforcing the Judgment (collecting the money)


PHASE ONE: ESTABLISHING THE CLAIM (exchanging information)

A. The plaintiff issues and serves the statement of claim
The person making the claim must issue a special legal document called a Statement of Claim and then serve it upon the person against whom the claim is being made. At this stage of the proceedings the person making the claim is called the Plaintiff and the person against whom the claim is being made is called the Defendant.

The Civil Procedure Act, 2005 attempted to simplify the law by creating a uniform set of rules to govern civil procedure in all three N.S.W. jurisdictions - Supreme District and Local Courts.Like all "one size fits all" approaches, it is a disaster. It creaqtes the facade of uniformity where, in reality, noen is possible. For that reason, it pretends that there is just one form of Statement of Claim when, in reality, the structure and content of the Statment of Claim varies so much between different types of claim that there are, in reality, three distinct forms of Statment of Claim. For that reason, LAWconnect has produced different versions of the Statement of Claim to suit those three different types of claims. The most commonly used Statement of Claim is called a Statement of Claim (liquidated debt) and is used to collect debts arising from deals which people have negotiated such as money lent, goods sold, work done, etc. Special rules for the Local Court also allow it to be used to collect damages for the repair of any property accidentally damaged in a motor vehicle accident. The less common and more complex Statement of Claim (unliqidated damages) can be used for any type of claim but must be used for compensation claims for damages other than motor vehicle accidents and for claims for the return of goods improperly detained. Even rareer is the Statement of Claim (detention of goods) which deals with a claim for the return of goods improperly held by another. It seeks an order for the goods to be physically removed and returned to the Plaintiff or, if that is not possible, payment of compensation to the Plaintiff for their loss.

The Plaintiff prepares a statement of claim and must file it at a Local Court Registry office. Plaintiff's either prepare the statement of claim themselves, use the services of a solicitor or use a licensed Commercial Agent ("debt collector"). With most claims the staff at the Court Registry can usually assist unrepresented parties with the preparation of much of the documentation or refer parties for assistance by the Chamber Registrar. The Court Registry charges standard filing fees for issuing a statement of claim regardless of who prepares it. If a solicitor has prepared the statement of claim some of the solicitor's legal fees can be claimed on the statement of claim according to a Scale of Fixed Costs. The statement of claim must set out precisely who the plaintiff is, who the defendant is, what the claim is about and how much is being claimed. It contains some prescribed notes which are supposed to tell the defendant what to do.

When the plaintiff files the statement of claim at the court registry, the registry clerk will stamp the statement of claim with a court stamp, date it and allocate a Case Number to it. At this point the plaintiff is said to have commenced an action. It is then up to the plaintiff to arrange for the statement of claim to be served upon the defendant. Plaintiffs can make their own arrangement to serve the statement of claim upon the defendant or they can pay a service fee to the court registry staff to have the court attempt to serve it. The statement of claim must be served upon the defendant within six months of the date of its issue.

B. The Defendant responds to the statement of claim.
Once a statement of claim has been served upon the defendant, the defendant has 28 days to respond to it.
In responding, Defendants may:
* pay the matter in full either to the court or directly to the plaintiff or the plaintiff's solicitor or agent;
* negotiate a settlement of the action directly with the plaintiff and, perhaps, file an Agreement as to Judgment;
* file an Acknowledgment of Liquidated Claim stating that they admit all or part of the claim;
* file a Defence stating why all or part of the debt is not owing;
* file a Cross Claim if the defendant claims that money is owed to the defendant by the plaintiff;
* file a Cross Claim (Third Party) claiming that some other person is liable to pay or contribute to the debt;

If the statement of claim has not been filed in an "appropriate" court and the defendant is filing a Defence, the defendant may also file a Notice of Motion: Transfer of Local Court Proceedings to have the file transferred to a more "appropriate" Local Court. The plaintiff then has 28 days in which to reply on the question of venue by filing a Notice Specifying Apprpriate Local Court or a Notice Opposing Transfer of Local Court. Any dispute as to the proper venue of the Local Court hearing will be placed before the Magistrate or Registrar in chambers and a decision made regarding which court should deal with the action.

C. The case is prepared for a hearing
If the claim is in the Small Claims Division, the Defence (together with any Cross Claim) will automatically be listed for Pre-trial Review. This is an informal meeting with an Assessor (usually the Registrar of the Local Court) where particulars of the claim and the defence are clarified, admissions are sought, the issues are defined and the parties are encouraged to negotiate a settlement. If there is no settlement, the matter will be adjourned for hearing and the assessor must give each party directions about what evidence will be required and how it is to be presented at that later hearing.

If the claim is in the General Division, the matter will automatically be listed for Call-over and the Court will send a notice to each party setting out a preparation timetable allowing you four months to make all reasonable preparations for the hearing of the action. Those preparations may include the early listing of a Subpoena to produce documents so that documents can be examined before the matter goes before a court. It often involves the exchange of further particulars between the parties so that each can know in greater detail what is being alleged. A party may find it prudent to serve upon the other party a Notice to Admit Facts and Authenticity of Documents requiring the recipient to formally reply within 14 days so that areas of agreement and dispute can be more carefully defined and the evidential requirements be explored. In complex building or engineering cases or where there is a lot of detailed argument about a large number of technical factual points, the parties may be required to prepare a Scott Schedule which deals with each technical point and sets out each party's position on that point. The call-over sets a date for the final hearing and for a intermediate Review date. It will fix a date for the exchange of witness statements between the parties prior to the final hearing.

PHASE TWO: OBTAINING A JUDGMENT (winning the case)

A. If the defendant ignores the claim.....
If the defendant does not answer the claim within 28 days from when it was served, within 12 months from the end of that 28 day period the plaintiff can apply to have a judgment entered against the defendant administratively. The plaintiff must first prove that the statement of claim has been served and that a period of 28 days has expired since the date upon which the defendant was served with the statement of claim. The plaintiff does this by filing at the court registry office an Affidavit of Service that sets out how, when and where the statement of claim was served upon the defendant and what was said at the time of service.

If the action was commenced by the filing of a Statement of Claim (liquidated debt) the plaintiff now files an Notice of Motion: Default Judgment for Liquidated Debt which sets out how much is now being claimed in relation to the original claim, how much (if any) has since been paid and how much is now claimed in relation to interest, service fees and solicitor's costs. The registry staff will read and check the Affidavit of Service and Notice of Motion: Default Judgment for Liquidated Debt, check their records to ensure that the defendant has not responded to the statement of claim and, if all is in order, will enter a Default Judgment on the court record in favour of the plaintiff setting out precisely how much the defendant has been ordered to pay.

If a defendant later comes forward and complains that there is some acceptable reason why he or she failed to file a notice of grounds of defence, and can show that they have grounds for a defence which appears to have some merit, they can file a Notice of Motion to set aside the default judgment, appear in Court to argue why the Notice of Motion should be granted and, if successful, then be allowed to defend the action. The judgment debtor can obtain a stay of enforcement while they wait for the Notice of Motion to come before the Court. Notices of Motion are also used to deal with many other types of minor issues ancillary to the main action between the parties.

If the action was commenced by the filing of an Statement of Claim (unliquidated damages) or a Statement of Claim (detention of goods), the plaintiff files an Notice of Motion: Default Judgment for Unliqidated Damages or a Notice of Motion: Default Judgmetn for Detention of Goods (as the case may be) and the court registry staff will enter a "Default Judgment" and then list the action for a date fora hearing for assessment of damages in Court before a Magistrate and each party is notified of the date for assessment.

B. If the defendant files a Defence, the matter goes to a hearing.....
If the matter was commenced in the Small Claims Division of the Local Court and the matter is not settled at the Pre-trial Review, the assessor adjourns the action for a Small Claims Assessment hearing. There are few fixed rules as to how such a hearing is to be conducted and each court is allowed to set its own procedure. Most courts merely require the parties to supply written statements of fact from the witnesses. These are read by the Assessor (usually a Magistrate), oral submissions are received from each party and a judgment handed down by the Assessor setting out who is to pay whom what amount of money including interest, court fees, expenses and a limited amount of solicitor's costs.

If the matter was dealt with in the General Division of the Local Court, the action is listed for a Call-over which requires a brief appearance before the Court to check the readiness of the matter, how long the hearing is estimated to take and what dates are suitable for each party and their witnesses to attend for a full hearing of the action. The parties may also be asked to have the matter heard by way of arbitration hearing rather than a more formal hearing before a Magistrate. The arbitrator will hear the case in accordance with the established rules of evidence and hand down a judgment like a normal court except that it is usually done in a private room rather than a court room. Any party unhappy with the result of the arbitration hearing may "appeal" against the arbitrator's decision within 28 days of being formally notified of that decision by the court registry by filing an Notice of Motion: Re-hearing after Arbitration and paying the appropriate filing fee. The matter will then be listed for another call over and then a hearing date is fixed for a Magistrate to hear the case afresh.

Whether the matter is heard by a Magistrate in the first instance or after an Application for Re-hearing of Arbitrated Action has been filed, the Magistrate will hear oral evidence in a court room according to the rules of evidence after accepting written statements from each witness and then giving the parties an opportunity to further question the witnesses. The Magistrate will then express his or her judicial finding which becomes the final judgment. The amount ordered to be paid is now called the judgment debt.

In both divisions of the Court, once the judgment is entered or made, the person to whom the money must be paid becomes known as the judgment creditor and the person who has to pay the money becomes known as the judgment debtor. After this point, the court no longer differentiates between Small Claims Division and General Division rules for the enforcement of the judgment debt.

No appeal from the decision of a magistrate is allowed "as of right". Certain types of order can be set aside by way of Notice of Motion if they were made in the absence of a party or if they can be shown to be "illegal, irregular or against good faith". Appeal may be made to the Supreme Court on the rather narrow grounds of there having been a denial of natural justice, lack of jurisdiction or by way of special case where a question of law needs to be explored and defined.

PHASE THREE: ENFORCING THE JUDGMENT (collecting the money)

Now that judgment had been made, the judgment creditor can take various steps to try and collect the debt. The judgment creditor may issue a:-
* Writ for Levy of Property - this is a court order empowering a Sheriff’s Officer to seize and auction personal property of the judgment debtor. You can require the sheriff's officer to sell the judgment debtor's real estate in special circumstances;
* Writ of Delivery if the action was for detention of goods. This orders the sheriff's officer to try to seize the missing goods and return them to you;
* Garnishee Order - this is an order to take money from the judgment debtor's salary or wage or to take money from a bank or financial institution account, or intercept money owing to the defendant from a third person;
*Examiantion Notice - this is posted to the debtor askign them to disclose their fianncial circumstnaces to you in writing.
* Examination Order - this requires the judgment debtor to appear at their nearest Local Court and answer questions about their assets, income, employer, bank accounts and so on so you can better assess how to enforce the judgment.
* Certified Copy of Judgment - this is so you can commence bankruptcy or "winding-up" proceedings.

The judgment debtor may negotiate a private arrangement with the judgment creditor to pay off the judgment debt over time. Alternatively, the judgment debtor can file an Notice of Motion to Pay by Instalments. This includes an offer to pay the debt by regular Instalments and requires the judgment debtor to attach an Affidavit as to the Property and Means of Judgment Debtor setting out in some detail the financial circumstances of the judgment debtor. The Registrar of the Court must judicially consider the Application to Pay Judgment Debt by Instalments and decide whether to grant or refuse the application. If the Registrar grants the application, he or she makes an Instalment Order and each party is sent an Instalment Order and Notice advising them of the details of the order and allowing the judgment creditor 14 days in which to file Notice of Motion: Objection to Instalment Order. If such a notice of objection is lodged, the matter is listed before the court for a brief instalment hearing to give the parties an opportunity to argue their respective cases about why the judgment debtor should or should not be allowed to pay by instalments. Similarly, if the Registrar refuses the judgment debtor's Notice of Motion to pay by Instalments at first instance, the judgment debtor may file a Notice of Motion: Objection to Order Refusing Instalment Application and the question will be listed before the court and the parties given an opportunity to attend and argue the point.

Enforcement action is stayed whilst an Instalment Order is in force. If the judgment debtor falls into arrears with his or her instalment orders, the judgment creditor may file an Affidavit of Non-compliance with Instalment Order and may then take immediate action to enforce the balance of the judgment debt. There is no limit to the number of applications to pay by instalments which a judgment debtor can make.

Instalment payments are paid directly between the parties and each party is required to maintain their own payment records.

While the judgment debt remains unpaid, interest accrues on the outstanding amount of the judgment debt at the statutory rate of interest. Statutory interest is reducible but does not compound. From the date the judgment is made, the judgment creditor has up to twelve years in which to enforce it.