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Court Proceedings to recover your debt when the Defendant is Overseas

Monday, May 21, 2012 - Posted by Philip Harvey

The consequences of your debtor / the defendant being overseas when initiating court proceedings in NSW is that the courts do not have jurisdiction (except in the Supreme Court). We will put this into context of a scenarios;

You did not know your debtor was overseas when you issued an SLC, and the debtor was on an overseas holiday for 8 weeks.

In this instance, where you have issued an SLC and had it served via post, there is a strong possibility that the you might not even know your debtor is overseas when you commence action (Note - your knowledge of the debtors location does not change the outcome). With no defence entered, you apply for Default Judgment and it is granted. When the debtor returns from overseas he becomes aware of the SLC, make enquires and then also finds out about the Judgment.

The debtor can then apply to the court to have Judgment struck out. He only needs to turn up to court with his Passport as proof that he was not in the country, and Judgment will be set aside. There is no way for the Plaintiff to alter this outcome. With the debtor outside of Australia, the courts do not have jurisdiction and have no option but to set aside the Judgment. Not only is your Judgment set aside, the SLC is also deemed invalid. To recommence proceedings, you need to issue a new SLC.

We have experienced further twists in the above scenario, where our Judgment was set aside and SLC deemed invalid and at the date the Judgment set aside it was 6 years and 1 month since a payment was received on the account. The debtor applied to the court to have Judgment set aside and was successful on the basis of being overseas. Once Judgment had been set aside and the SLC deemed invalid, the account was statutory barred and no longer collectable. If we were aware that debtor was overseas we would have been able to prevent this situation and collect the debt in full.

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