If you decide to commence court proceedings to sue a debtor for an amount they owe to you, the first step is to draft and serve your originating process. ‘Originating process’ are the documents used to commence legal proceedings and to notify the defendant of the case against them. This usually takes the form of a Summons or Statement of Claim, which must be served personally on the debtor to ensure they are aware of the proceedings. The court will not hear the case until they are satisfied that the defendant is aware of the proceedings and that the documents have been personally served.
The issue that creditors commonly face when commencing debt recovery proceedings is the debtor avoiding service. Colloquially, this might be referred to as sticking their heads in the sand and pretending the proceedings don’t exist. If you are having trouble serving the debtor personally, then at the first court date the court may make an order for substituted service pursuant to Regulation 10.14 of the Uniform Civil Procedure Rules 2005.
Before a court will make an order for substituted service, it must be satisfied that it is impractical to personally serve the originating process in the manner provided by law. You can usually do this by filing an affidavit that states the reasonable attempts you have taken to serve the defendant. This can include, but is not limited to, the following steps:
- Searches of the NSW Land Registry Services database, telephone directory, electoral roll, or ASIC register proving the debtor lives at the address you have attempted to serve;
- Attempts to contact employers of the debtor, or residents at their previous residential addresses;
- Attempts to contact the debtor to confirm their whereabouts;
- Engagement of a process server or private investigator to determine their whereabouts;
- Attempts to contact family, friends or associates of the debtor to confirm their whereabouts.
You will then need to propose an alternate method of service to the court that is reasonably likely to bring the proceedings to the defendant’s attention. The court will consider your evidence and the practicalities of serving the documents when making a discretionary decision as to the best means of substituted service. An order for substituted service could take the following forms:
- Leaving the originating process at the known address of the debtor;
- Emailing the originating process to the debtor’s known email address;
- Serving a friend, associate or family member of the debtor;
- Serving the debtor via their social media account.
The last of the abovementioned categories of substituted service is a novel area. In the case of Flo Rida v Mothership Music Pty Ltd [2013] NSWCA 268, the music artist Flo Rida successfully argued on appeal that an order for substituted service, whereby Flo Rida was served through his official ‘blue tick’ Facebook page, should not have been made as the evidence did not establish that the Facebook page was in fact Flo Rida’s. While this decision does not completely bar the use of social media for service, it does mean that a creditor would need to prove that the social media page is actually connected with the other party and that a message on it is likely to come to the individual’s attention.
While a debtor can run, they can’t hide. If you are having trouble serving a debtor who owes you money, then we can assist you in obtaining an order for substituted service to enable you to pursue your debt in full.
If you have further questions, please contact Matthew Sibley at msibley@franklaw.com.au.
This is not legal advice.
