Debt Recovery in South Australia

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Debt recovery matters in South Australia can be dealt with in any of three courts depending on the amount of money involved. This page deals with debt recovery matters in South Australia.

Legislation

The laws that govern the procedures for making debt recovery claims are the Magistrates Court (Civil) Rules 2013 , Magistrates Court Act 1991, District Court Act 1991, and the District Court Civil Rules 2006.

The Limitation of Actions Act 1936 sets out the limitation periods for making civil claims.  

Jurisdictions

Debt recovery matters involving less than $12,000 are bought in the Magistrates Court Civil (Minor Claims) Division.

Matters involving between $12,000 and $100,000.00 are dealt with in the Magistrates Court Civil (General Claims) Division.

Claims involving over $100,000 are bought in the District Court Civil Division.

Notice of Intended Claim

If a person wants to initiate a claim in the Magistrates Court, a Final Notice of Claim or letter of demand should be sent to the defendant before filing a claim. This sets out the details of the claim and gives the defendant 21 days to settle the claim to avoid legal action. When a minor claim is filed, the Magistrates Court offers a free mediation service to help to settle the claim.

In the District Court, the plaintiff must send the defendant a detailed notice containing an offer to settle the claim at least 21 days before filing the claim. If these notices are not sent, or 21 days have not passed, the plaintiff will not be able to recover the costs of filing their claim.

Minor civil claims

South Australia’s minor claims division is an informal jurisdiction. The parties cannot be represented by a lawyer unless the court agrees. This may occur if both parties have a lawyer or if one of them would be disadvantaged by not having a lawyer.

When a claim is served the defendant has 21 days to either settle or defend the claim. If the defendant does nothing, default judgment can be signed without a court hearing.

If the defendant files a defence to the claim there will be a Directions Hearing to see how the matter might be resolved. If it can’t be resolved, it will be set down for either mediation or trial.

If the debt is not disputed, or an agreement is reached before trial the parties may sign an Enforceable Payment Agreement (EPA). If the defendant defaults, the EPA can be used to enter judgment.

Costs are not usually awarded in the Minor Cases Division, unless all parties were represented by a lawyer, or if the magistrate considers it is appropriate.

General division of the Magistrates Court

In the general division of the Magistrates Court, each party is entitled to be represented by a lawyer.

The court will hold a conciliation conference as well as a Directions Hearing to try to resolve the claim without the need for a trial and may refer the matter for mediation.

There are potentially significant cost implications for parties who do not accept realistic offers to settle.

District Court

To commence proceedings in the District Court, a plaintiff files a claim and serves it on the defendant. If the defendant does not respond, the plaintiff may seek judgment in default of the defendant’s appearance.

If the claim is defended, the defendant will file both an appearance and defence to the claim. The parties attend a Status Hearing and prepare a Litigation Plan which sets out how the parties want to matter to proceed. A conference may be held to try to settle the claim. If the claim is not settled, the court will periodically hold Directions Hearings and Listing Conferences to oversee the progress of the matter to trial.

Once a judgment is entered, it can be enforced.

Enforcement procedures

After a judgment has been entered, the successful party is known as the judgment creditor and the unsuccessful party, as the judgment debtor.

If the judgment debt is less than $10,000, there may have to be an Investigation Hearing before any other enforcement action. The court can make an order for payment according to what the judgment debtor can afford to pay. If two or more payments are missed, an examination summons can be issued. The judgment debtor will be asked to come back to court and explain why payment was not made. The court may adjust the payment order.

There are several options for enforcing debts of more than $10,000.

Firstly, a Warrant of Sale can be requested. This can also occur where the debt is less than $10,000 with the court’s approval. When a Warrant of Sale is issued, goods belonging to the debtor can be seized and sold. However, there are certain items that cannot be seized and sold, including household goods, clothes or vehicles worth less than $2,500.00.

Secondly, the judgment creditor can request a charging order. This is an order that prevents the debtor from selling or transferring their land until the debt is paid.

Thirdly, a garnishee order can be issued if the judgment debtor has money due to them from someone else, such as money in a bank account or, in some circumstances, wages. When a garnishee order is made, the debt will be deducted from the judgment debtor’s bank account or salary, leaving them enough for necessities.  

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