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To initiate legal action in the Supreme Court of NSW is not something that is done lightly, and often as a last resort. The cost of the initiating action to lodge a Statement of Claim for possession of Land exceeds $4,000, with the court fee alone over $2,200.
Since the introduction of the national credit code that outlines compulsory external dispute resolution available to debtors, there has been a dramatic increase in the number of disputes received by the Ombudsman. These often result in an agreement that stalls any further action through the court, preventing an application being made for Judgment for Possession of Land and subsequently a Writ for Possession of Land.
Where this becomes an issue, is where the EDR agreement made with the debtor exceeds the court allowed time frames for applying for Judgment. In the NSW Supreme Court there is a 9 month window to apply for Judgment once an SLC for Land has been issued. By the time an EDR agreement is reached 3-4 months may have already passed. Should the EDR agreement allow a 6 month opportunity for the debtor to rectify the account, the SLC for Land would be stale, and you would have to recommence proceedings, costing another $4,000+.
There are limited circumstances where you can apply to the court to have this time period extended, potentially reducing the costs involved. The NSW Supreme Court will look at granting an extension of time where the Plaintiff can prove that it has been ordered / instructed by the Ombudsmen to delay action.
However, if the Plaintiff cannot produce correspondence from the Ombudsmen with an order to delay action, the NSW Supreme Court will not grant an extension.
We had a recent example of a FOS dispute where both parties reached an agreement with FOS acting as a mediator that was signed by both parties. Because this was not an order from FOS, the NSW Supreme Court would not extend the time permitted to apply for Judgment. As a result there is a possibility that proceedings may have to be recommenced with a new SoC for Land.