The main reason proceedings are taken against a company is to recover debts that are due and payable.
There are usually two ways to sue a company for the recovery of the monies due and payable:
- Commencing Court proceedings in an appropriate jurisdiction; or
- Serving the company with Statutory Demand.
Commencing Court Proceedings:
Depending on the state and the amount of the debt, you can commence proceedings against a debtor company for as little as $500.00.
Prior to commencing the proceedings, ensure that the company is still trading, and has not been deregistered or placed into liquidation. To check this you can do a company search for a price of approximately $16.00.
When commencing in Queensland, you need to ensure you commence the proceedings with a Claim and Statement of Claim. In New South Wales you only need to proceed with a Statement of Claim.
To ensure that you have correctly identified the agreement which gave rise to the debt now due it is recommended that you get legal advice about the contents within the Claim and Statement of Claims.
Service of the sealed documents after the court has imposed a seal on them needs to be served on the company’s registered office (this is found on the company search).
28 days after you served the debtor company, you can proceed to enter a default judgment against the debtor company only if during this period the debtor company has not filed a Notice of Intention to Defend and Defence (Queensland) or Defence (New South Wales). If the debtor company has filed a Defence, depending on the state in which you commence, you will generally be allocated a first return date before the court to manage the progress of the proceedings and ensure efficient prosecution of the matter.
The matter will proceed to trial when all steps in the proceedings are finalised (depending on the state – disclosure, evidence and mediations are just some of these steps).
After all evidence is presented at the trial and final submissions are made, the court will either deliver their decision on your dispute immediately or will reserve judgment to deliver their decision at a later date. Depending on the outcome, you can then elect to enforce the judgment if you are successful and the debtor company fails to pay. One such example of enforcing a judgment such as proceeding by way of a Statutory Demand.