When a Defence is Filed

In the civil registry within the New South Wales (NSW) Local Court, a statement of claim for a liquidated debt is a common legal tool used to recover a specific sum of money that is owed. The defendant in any proceedings has the opportunity to respond by filing a defence.

In our experience, in most cases a defence is not filed. It may happen once in every 20 or 25 cases. Even less cases proceed to a final hearing, with most settled during case management. However, the process can become intricate when the defendant decides to defend the claim.

This article outlines the procedures that follow, after a defence has been filed in the NSW Local Court. It provides an overview of the key steps involved in the legal process, which is designed to ensure a just, quick, fair, and transparent resolution to the dispute. However, this is not always the case, and the proceedings can become complex.

Filing a Defence

When a defendant receives a statement of liquidated claim, they have 28 days to file a defence. The defence document must outline the reasons why the defendant disputes the claim. The defence will usually address each paragraph in the pleadings of the statement of claim. The defendant will either admit, not admit, or deny each of the plaintiff’s allegations. It is critical that the defence is comprehensive and addresses each point raised in the plaintiff’s claim. Sometimes a request for further and better particulars about the claim will be made so that the defence can provide a more detailed response.

Counter Claim

Sometimes but not always, a defendant may file a counter claim. A counter claim is a legal action taken by a defendant in response to a claim made against them by the plaintiff. It is a separate claim made by the defendant against the plaintiff, asserting their own rights or seeking damages. The purpose of a counterclaim is to allow the defendant to present their side of the story and potentially seek their own legal remedy in the same proceedings.

Plaintiff’s Response

Upon receiving the defence and/or counter claim, the plaintiff has the opportunity to respond. The plaintiff may choose to reply to the defence, particularly if there are new issues raised that require clarification. This response can help narrow down the points of contention before proceeding further. If a counterclaim is filed a plaintiff must file a defence to the counter claim within 28 days.

Case Management

Once the defence is filed, the case enters a phase known as case management. The court will typically schedule a pre-trial review (small claims) or directions hearing (general division). During this hearing, both parties may be required to attend and discuss the case’s progress. The primary purpose of the directions hearing is to establish a timetable for the subsequent steps in the process, such as settlement negotiations, exchange of evidence, mediation, or potential trial dates. The aim is to facilitate a smooth and efficient resolution of the dispute and to try and encourage the parties to come to some form of settlement.

Interlocutory Orders

The term “interlocutory” refers to a legal decision or order that is made during the case management process, before a final judgment is reached. Interlocutory orders are typically temporary or provisional in nature and are issued to address specific issues or matters that arise during the litigation process. These orders may deal with procedural matters, evidence, costs, or other aspects of the case. Unlike a final judgment, interlocutory orders are subject to modification or reversal as the case progresses. They help to manage the proceedings and facilitate a fair and efficient resolution of the case.

Mediation

Before proceeding to a full trial, the court often encourages the parties to enter into mediation. Mediation involves a neutral third party (mediator) who helps facilitate negotiations and encourages the parties to reach a mutually acceptable settlement. Mediation can be a cost-effective and quicker alternative to a trial, and it allows for more flexible solutions that might not be available through court orders. The mediator does not make decisions but assists the parties in exploring potential solutions and finding common ground. However, both parties must show a willingness to compromise for the mediation to take place and to be effective.

Pre-trial Conference

If mediation fails to resolve the dispute, a pre-trial conference may be scheduled. During this conference, the magistrate or registrar discusses the case’s merits, identifies the key issues in dispute, and attempts to encourage the parties to settle or narrow down the issues in contention. The pre-trial conference aims to streamline the trial process and explore the possibility of settlement before proceeding to a trial.

Preparation for Trial

If mediation fails and the case remains unresolved, the matter will proceed to trial. Both parties must prepare their evidence and witnesses for the final hearing. This preparation includes researching case law, precedents and legislation, drafting affidavits or witness statements, organising documentary evidence, and formulating legal arguments.

Exchange of Evidence

Exchange of Evidence is a pre-trial procedure where both parties exchange relevant documents and information to support the pleadings and particulars of their claim or defence. Each party has an obligation to disclose all documents that are in their possession, custody, or control and may be relevant to the case. This process ensures that both sides have access to the evidence that will be presented in court, promoting transparency and fairness. Properly conducted the exchange of evidence can sometimes lead to a settlement, as parties gain a clearer understanding of the strengths and weaknesses of their cases.

The Final Hearing

During the final hearing both the plaintiff and the defendant present their cases before an assessor or magistrate. Each side has the opportunity to present evidence, call and cross-examine witnesses (general division), and make legal arguments. The court will then consider all the evidence and make a determination based on the merits of the cases that each party has presented.

Judgment

After considering the evidence and arguments, the assessor or magistrate will deliver a judgment. The judgment will either uphold the plaintiff’s claim, dismiss it, or provide some form of partial relief. The judgment may also include orders for costs, which means the losing party might be required to pay the legal costs of the winning party.

Post-Judgment Procedures

If the plaintiff wins and the defendant is ordered to pay a sum of money, the plaintiff may need to take further steps to enforce the judgment if the defendant does not voluntarily comply. This can include garnishment of wages, writ for seizure of assets, financial examination, or other enforcement actions.

Appeals

Both parties have the right to appeal the decision if they believe there has been a legal error. Appeals must be lodged within a specific timeframe and are typically heard in a higher court. The appeals process can be complex and requires a thorough understanding of legal principles and procedural rules. The commerciality of filing an appeal must be considered as the costs of continuing to run the matter will often outweigh the benefits.

Conclusion

The procedures following the defence of a statement of liquidated claim in the NSW Local Court are designed to ensure a fair, just and quick resolution of disputes. It involves multiple stages, each with its own set of rules and requirements. Understanding these steps is crucial for both plaintiffs and defendants to navigate the legal landscape effectively and achieve a favourable outcome. You should always seek legal advice before filing a statement of claim, defence, or counter claim. This article is drafted as general information only. Should you require a specific advice please contact Paul Thorndike on 0429 008 247 or at paulthorndike@nswcreditlaw.com.au

Disclaimer: When researching and drafting this article we may use an AI advanced language model amongst other sources. It is intended for general informational purposes and should not be used as a substitute for professional advice. While every effort has been made to ensure the accuracy and reliability of the information provided, we cannot guarantee its completeness, timeliness, or appropriateness for any particular purpose. Usage of this information is at the reader’s own risk. We are not liable for any errors, omissions, or results that may be obtained from the use of this information. Always consult with a qualified professional before making any decisions based on the content of this article. For legal advice please contact Paul Thorndike on 0429 008 247 or at paulthorndike@nswcreditlaw.com.au