Please note: This is an extract from Hansard only. Hansard extracts are reproduced with permission from the Parliament of Western Australia.
CIVIL JUDGMENTS ENFORCEMENT BILL 2003
Introduction and First Reading
Bill introduced, on motion by Mr J.A. McGinty (Attorney General), and read a first time.
MR J.A. McGINTY (Fremantle - Attorney General) [4.56 pm]: I move -
That the Bill be now read a second time.
This Bill assists in achieving the objective of providing an efficient, flexible,
unified and statewide civil judgments enforcement system in the Magistrates,
District and Supreme Courts. The Bill is part of the State Governments
legislative reform package that will help thousands of people who are owed money
but who presently struggle to recover debts from recalcitrant debtors. It is
those people who are severely disadvantaged under current civil enforcement
laws. Every year, even though a court order for payment has been made, approximately
13 000 Western Australians must take further action to recover outstanding civil
debts. That causes financial hardship to creditors and their families, many
of whom own small businesses. The Bill, by improving this States civil
enforcement system, will give them practical help in recovering moneys owed
A unified civil judgment enforcement system throughout the Magistrates, District and Supreme Courts will provide a range of changes to improve efficiency, including a wider choice of enforcement options and an enhanced garnishee system. It provides an opportunity to those seeking to recover a judgment debt by allowing judgment creditors the same option that is available in all States and Territories; namely, the appropriation of a part of a judgment debtors earnings. This will be an attachment order. Of course, these new provisions have appropriate mechanisms to protect the debtors privacy and employment rights, as well as to protect employers from unnecessary burdens. Further, an attachment order cannot exceed 10 per cent of the debtors earnings. Therefore, there are benefits for the creditor, and income protection and protection from undue hardship for the debtor.
The Bill implements the Western Australian Law Reform Commissions recommendations to allow for the appropriation of all debts, whether those debts are present or arising in the future, as well as debts in which the debtor has a joint interest or state debts. Money in banks and other financial institutions is included.
Imprisonment is a penalty of last resort. Prisons are not a place for recalcitrant debtors. The Law Reform Commissions recommendation that an imprisonment order should not be made on the first examination is in this legislation. Use of imprisonment in civil debt enforcement will be restricted to cases in which debtors wilfully default in their payments and disregard court orders.
Finally, it is important to note that the Bill not only introduces new remedies but also removes the antiquated and seldom-used remedies of sequestration and charging orders. Sequestration orders are court orders where judgment creditors can apply to the District or Supreme Courts to take possession of property and keep that property until the judgment debtor complies with the court order. Generally, this procedure is taken following the judgment debtors failure to pay a court judgment within a specified time. A sequestration order is, in essence, a remedy for contempt of the courts order to pay the judgment. Currently, sequestration orders can be instituted only in the District and Supreme Courts. Very few actions for sequestration have been instituted since the enactment of the commonwealth Bankruptcy Act 1966.
Charging orders are actions, instituted in the District or Supreme Courts by judgment creditors, to attach stocks and shares. In this context, a stop order also can be obtained to prevent the payment of dividends to the judgment debtor or the transfer of those stocks and shares from the debtor to a third party. After six months, an application can be made to the court to sell the stocks and shares to satisfy the judgment debt. Currently, a Local Court judgment creditor must obtain a Supreme Court order transferring the Local Court action into the Supreme Court before charging and stop orders can be obtained. This procedure is rarely, if ever, used by Local Court judgment creditors. In contrast, the new enforcement remedies provided by this Bill are modern, flexible and effective remedies available in all courts.
Judgment creditors will be able to obtain orders requiring judgment debtors or persons in control of judgment debtors assets to deliver those assets to a person named in the order, to cease doing specified acts in relation to those assets, and prohibiting the disposal or other dealings with those assets. For example, courts will be able to make orders that facilitate the appropriation or realisation of an asset, including stocks and shares. The Bill, therefore, is an important aspect of the Governments reforms to this States justice system. I commend the Bill to the House.
Debate adjourned, on motion by Mr R.F. Johnson.