Changes to Garnishee Orders in NSW

There has been an amendment to the requirements for issuing Garnishee Orders for Ddebts. If you are using this enforcement action, you must now state the grounds relied on in support of identifying a debt owed by the Garnishee to the Judgment Debtor in the form of an Affidavit.

UCPR 39.35 now states:

(1) Unless the court orders otherwise, an applicant for a garnishee order must file an affidavit in support of the application, being an affidavit sworn not more than 14 days before the date of filing.
(2) The affidavit in support:
(a) must identify the garnishee, and any debts that are, or are reasonably likely to be, owed by the garnishee to the judgment debtor, and
(a1) must state the grounds relied on in support of identifying a debt for the purposes of paragraph (a), and
(b) must state the amount payable under the judgment, together with any costs and interest payable in relation to the judgment, as at the date of swearing of the affidavit.

For advice as to what this legislative change may mean to you and future applications for Garnishee Orders we recommend that you contact Collection Law Partners or seek your own independent advice from a qualified legal practitioner.

Garnishee Orders and the Weekly Compensation Amount

We have had some situations of late where Garnishee Orders for Wages or Salary are being filed however the employer has been unable to comply with the Order as the Judgment Debtor is not earning over the Weekly Compensation amount.

This leads to a situation where deductions are not being made which means that deductions are not being made to reduce your debt.

What is the Weekly Compensation Amount?

s122 of the Civil Procedure Act states:

1. The amounts attached under one or more garnishee orders must not, in total, reduce the net weekly amount of any wage or salary received by the Judgment Debtor from the Garnishee to less than $447.70 as adjusted under Division 6 of Part 3 of the Workers Compensation Act 1987 .
1 (a). The amount of $447.70 referred to in subsection (1) is an 
"adjustable amount" for the purposes of Division 6 of Part 3 of the Workers Compensation Act 1987 .
2. In this section: 
"net weekly amount" , in relation to any wage or salary payable to a Judgment Debtor, means the amount payable each week to the Judgment Debtor after deducting any taxes or other sums that, pursuant to any Act (including any Commonwealth Act), are required to be deducted from any such money.

Effectively this means that the Judgment Debtor can retain an amount of $480.50 (effective from 01/04/2016).

What Are Your Options?

Several options remain to you if the Judgment Debtor is not earning over the Weekly Compensation amount however for the purpose of this article we will only discuss 2 possible solutions.

The most obvious solution is to have the Judgment Debtor apply for an Instalment Order at the Local Court. This offer for payment by the Judgment Debtor removes the protections that they have under s122 of the Act and deductions must be made for the amount that the Instalment Order is made for.

Alternatively you may consider, if you have details of the financial institution that the Judgment Debtor banks with, the issue of a Garnishee Order for Debts. This Order attaches to any / all monies held in the Judgment Debtors bank account with that particular financial institution and is not subject to s122 of the Act.

Need More Information?

If you need more information about enforcement of a Garnishee Order please contact us.

Succesful Bank Garnishee Following Estate Proceeds

In this case study, we were referred a full file for collection for approximately $30k in July 2012. Our client had issued a Statement of Claim at this stage but had not entered Judgment.

We sought Default Judgment shortly after receiving the file on a contingent basis.

Numerous contact attempts were made with contact established with the debtor in 2012 following a SMS being sent. The debtor entered into a repayment arrangement but failed to maintain this agreement. Throughout our dealings with the debtor payment was only forthcoming after sustained contact. Sporadic payments were received in this way until June 2013 when the debtor started to make consistent payments without follow-up.

This agreement was maintained until August 2014 when payments became spasmodic again. When contact was established with the debtor it was determined that there had been a death in the family. Owing to this a moratorium period was granted with the debtor resuming payments in January 2015.

Payments to the debt ceased again with continual follow up made by our office. When eventually contacted the debtor claimed that there would be insufficient funds from the deceased Estate to finalise the debt but had a family member who was able to assist in raising a reduced settlement. A search of Probate indicated that the debtor was the executor of the Estate and when questioned further about this the debtor became evasive and refused to answer direct questions about the status of the Estate. The debtor subsequently continued to claim that a lump sum settlement would be forthcoming however this did not eventuate.

With no current arrangement for payment of the debt a Garnishee Order for Debts was issued which recovered the balance in full including interest and costs.

In the course of our handling of the account 70+ outward bound contacts were made or attempted, 2 incoming calls were received from the debtor and a total of 14 hours were spent recovering the debt.

Garnishees compared across different States and Territories

A Garnishee is an enforcement action that either serves a Local Court order on an employee to redirect earnings over a certain threshold / agreed amount or is an order to a financial institution to remit funds held on account for the debtor. If an Employer / financial institution fails to action the Garnishee Order, enforcement action may be taken through the courts to gain payment.

New South Wales

Any amount paid under one or more garnishee orders must not, in total, reduce the net weekly amount of any wage or salary received by the judgment debtor to less than the standard workers compensation weekly benefit (section 122 Civil Procedure Act 2005). This amount is adjustable - refer to  http://www.workcover.nsw.gov.au/WorkersCompensation/WorkplaceInjuries/Benefits/weekly.htm

Victoria

Prerequisites	Judgment / Hearing
Service Method	Personal Service on the Debtor 14 days prior to the hearing, once a hearing has been completed, service of the Garnishee on the Debtor & employer.
Valid for	Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name	Attachment of Earnings Order

Note for Vic - The maximum amount that can be taken from wages is 20%. The Registrar will make a decision, on all the information available, as to the appropriate amount to be garnished from the Debtor’s wage.

Queensland

Prerequisites	Judgment  Enforcement Hearing Summons
Service Method	Personal service of the Redirection of Earnings Order on the employer and Defendant
Valid for	Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name	Redirection of Earnings

Notes for QLD;
Deductions to commence within 7 days of service of the Attachment of Earnings Order
Court will determine amount to be deducted under the Redirection of Earnings (Protected Earnings rate)

South Australia

Prerequisites	Investigation / Examination Hearing
Service Method	Where the Court makes an order for attachment in the absence of either a garnishee or a judgment debtor:    (a) the judgment creditor must forthwith serve a garnishee, who was not present, with the order of attachment;   (b) the Court must adjourn the hearing to a date, time and place fixed by the Court;   and(c) the judgment creditor must serve notice of the adjourned hearing and the application on a garnishee or a    judgment debtor who was not present when the order was made at least 4 clear days before the adjourned date.     On proof of service of any document required to be served, the Court may proceed in the absence of a garnishee or  a judgment debtor.   An order for attachment, which is confirmed or varied at an adjourned hearing in the absence of a garnishee, must  be served forthwith by the judgment creditor on the garnishee.
Valid for	Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name	Order for Attachment / Garnishee Order

Note for SA;
Where the employer does not comply with the garnishee order, you can apply to the court to have Judgment awarded against the employer.

Tasmania

Prerequisites	Service of Provisional Order
Service Method	Pre-paid post addressed to the address of the person or Personal Service. Provisional Order must be served on  both  the Garnishee (employer) and the Defendant. If after 21 days of service of the Provisional Order the debt is not disputed Final Orders must be served on both the Garnishee (employer) and the Defendant
Valid for	Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name	Garnishee

Western Australia

Mean Inquiry must be conducted prior to making an application for Earnings Appropriation Order
Judgment Debtor must be in arrears at least two (2) payments under an Instalment Order made at a Means Inquiry
An order cannot be made against a Judgment Debtor if another earnings appropriation order is in effect.

Australian Capital Territory

Prerequisites	Judgment Enforcement Hearing
Service Method	Personal Service / Service by pre-paid post to the Garnishee of the Earnings Appropriation Order
Valid for	Until balance of the Judgment Debt is paid or employment terminated
Official Name	Earnings Appropriation Order

ACT Notes:
Enforcement Hearing must be conducted prior to applying for Earnings Redirection Order unless the Plaintiff can supply to the Court a Financial Statement of the Defendants current income and liabilities
Court will determine amount to be deducted under the Redirection of Earnings (Protected Earnings rate)

Northern Territory

Prerequisites	Personal Service on the Defendant of the Attachment of Earnings Summons 14 days prior to the hearing. Defendant must within 7 days of the hearing provide the Court with declaration of Financial Circumstances. Should the Defendant fail to appear the Registrar may make Orders in their absence if the Plaintiff can provide evidence of the Defendants income / liabilities for the Orders to be made.
Service Method	Personal Service on the Defendant and Employer of the Attachment of Earnings Summons
Valid for	Remains in force until balance of the Judgment Debt is paid or employment terminated
Official Name	Attachment of Earnings (attaches to a Wage or Salary)  Garnishee Order (attaches to debt)

Note for NT - The Registrar will decide the amount to be deducted from the Defendants earnings.