Question
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10 February 2017

Let’s come to an agreement, shall we?

Litigation
Victoria

Asked

Hi,

I need to make an application to vary or cancel an instalment order in the Magistrates' Court (due to multiple failures to pay on behalf of the judgment debtor). I cannot seem to see the relevant court forms or any provision for this in the Magistrates' Court Act or rules.

Can you please advise which form I need to use or how I can go about this?

Thank you.

Answered

Thank you for the question.

A creditor can only make an application to vary or cancel an instalment order if there has been a substantial increase in the property or means of the debtor, or any information given in support of the instalment order application was inaccurate.

Where a judgment debtor defaults on an instalment order, the correct procedure is to seek to enforce the order. The following is an extract from our Enforcement guide:

Enforcing an instalment order

Under s 17(1) Judgment Debt Recovery Act if a judgment debtor defaults on an instalment order, the judgment creditor can apply for an issue of a summons for examination compelling the debtor's examination by the court. The affidavit in support must give evidence that the instalment order was made and that the judgment debtor has defaulted.

A debtor who persistently, wilfully and without honest and reasonable excuse defaults is liable to be apprehended and committed to prison – either for a maximum term of 40 days or until the default is made good. An order for imprisonment can only be made if the debtor is present in the court: s 19.

The debtor has a right of appeal from a Magistrates' Court decision to the County Court.

As long as the judgment debtor complies with the instalment order, or where he has applied for an instalment order and has served the creditor with a copy of that application, the creditor cannot pursue other methods - for instance, applying to attach the debtor's earnings - by which to enforce the judgment debt. If the debtor defaults, the creditor can reconsider the other options for enforcement.

On examination, the court may confirm, vary or cancel the instalment order.

Writing to the judgment debtor seeking payment in full and advising that you hold instructions to apply for a summons for examination, which may lead to imprisonment, might bear fruit.

Regards

Mentor