If you have obtained a judgment in your favour and the judgment debtor has failed to pay the judgment amount to you, what are your options? This article looks at two ways you can enforcement a judgment: a garnishee order and a writ.
A garnishee order imposes an obligation on a third party (i.e. not the judgment debtor) to pay you the judgment debt amount. The third party must owe money to the judgment debtor.
Typically, the courts are willing to impose a garnishee order on a bank, financial institution or other third party that holds money on behalf of the judgment debtor, or an employer who owes the judgment debtor wages or salary.
Application for a garnishee order is a straightforward procedure.
A Notice of Motion and a supporting affidavit must be filed with the Court.
The Notion of Motion should state clearly whether the garnishee order is for debts, wages or salary. The affidavit must include the following information:
- the name and details of the intended garnishee (i.e. the name of the financial institution or the employer);
- the debts that are likely to be owed by the garnishee to the judgment debtor;
- the grounds for identifying that debt; and
- the amount payable under the judgment to the judgment creditor.
Once a sealed garnishee order is obtained from the Court, it must be served on the garnishee. If the garnishee is a bank, service should be made on the bank’s address for service of a legal document, not the address of the branch.
There are two main advantages of garnishee orders. The first is that the judgment debtor does not need to be notified of the order. Often, the judgment debtor will not be aware of the garnishee order against it until after the money has been recovered by the judgment creditor.
The second is that if the garnishee (i.e. the bank or employer) fails to comply with the garnishee order, the judgment creditor may apply to the Court for a judgment against the garnishee to pay the balance of the judgment debt.
Finally, unlike a statuary demand, execution of a garnishee is not liable to be frustrated by the judgment debtor asserting a counterclaim, set off or cross demand.
There are few limitations of garnishee orders. The first is that it can only be used by judgment creditors. It can only be used to recover judgment debts, not pre-judgment debts.
The second is that it can be difficult to obtain the details for the judgment debtor’s bank account or the identity of the person who owes them money. This is not publicly available information.
A garnishee order also has financial limitations. In NSW, the order must not reduce the aggregate debt due to the third party to less than $447.70, and must not reduce the net weekly amount of any wage or salary received by the judgment debtor from their employer to less than $447.70. These amounts may vary depending on which state is granting the order.
Finally, as garnishee orders are a court process, it can be slow process to receive an order.
Another method of enforcing judgment debt to consider is a writ. A writ is an order which enforces the judgment debt against property owned by the judgment debtor.
When a court issues a writ, it authorises the sheriff of the court to seize and sell property belonging to a judgment debtor to pay the judgment debt owing to the judgment creditor. A writ of execution has effect for 12 months but may be renewed by the court under UCPR rule 39.20.
- the address or addresses at which property belonging to the judgment debtor may be located;
- whether anyone is in occupation of the land at the time the motion is filed and, if so, there are several declarations that the deponent must make;
- if the writ arises from a failure to pay money, the details of the judgment creditor’s judgment and the current amount owing (including any payments made)
- the source of the deponent’s knowledge of the matters deposed to; and
- the costs claimed by the judgment creditor.
The writ can then be recorded against the land register. In NSW, the NSW Land Registry Service manages the land register. To record a writ against the land register:
- the writ must be recorded on PEXA using Form 09W Application to Record Writ;
- the judgment creditor must file the Form 09W with a sealed copy of the writ or a sealed copy certified by the sheriff at the Land Registry Services; and
- the judgment creditor must make a statutory declaration of judgment debtor/registered proprietor’s identity verification steps – see Registrar’s guidelines.
Order in which the property is to be sold (UCPR 39.6):
If it appears to the Sheriff that the value of the property affected by a writ for the levy of property is greater than the amount outstanding under the judgment debt, the Sheriff may not cause to be sold any more of the property than is sufficient to satisfy the judgment.
Land must not be sold before any other properly unless the judgment debtor requests or the Sheriff is satisfied that the land should be sold before the other property in order to minimize hardship to the judgment debtor or some other person.
Subject to the above, property is to be sold as:
- seems to the Sheriff best for the speedy satisfaction of the judgment without undue expense; and
- the judgment debtor may direct; and
- seems to the sheriff best for minimizing hardship to the judgment debtor or any other person.
The advantage of a writ is:
- it binds the land from the time the writ is delivered to the sheriff;
- the sheriff can seize personal property such as vehicles and other items to repay the debt; and
- the lodgment of a writ in effects acts as a restriction on dealings. This can give the judgment creditor leverage in dealing with the judgment debtor.
The limitations of a writ include:
- it is a costly process
- it is lengthy process,
- the minimum judgment debt must be more than $20,000: CPA s 106(5); and
- there are a number of steps that need to be followed before the writ is executed and money received in payment of the debt.
If you would like to discuss this article with us further, please contact David Greenberg, Partner, Esther Ihn, Senior Associate or Alison Chow, Associate on (02) 9261 5900.
 Form 69 – Notice of Motion Garnishee Order. rr 39.34-39.35 Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
 r 39.35 UCPR.
 r 39.39 UCPR.
 Section 124 of the Civil Procedure Act 2005 (NSW).
 Section 118 of the Civil Procedure Act 2005 (NSW).
 Section 122(1) of the Civil Procedure Act 2005 (NSW).
 UCPR Form 65 Notice of motion – writ for the levy of property. rr 39.2-39.3 UCPR.
 r 39.3 UCPR.