Last updated 28 November 2016
It is more complicated to defend a debt claim in court, and a debtor served with a claim should seek legal advice.
If the defendant acknowledges to the court that the debt, costs and interest are due and payable, court judgment will be made for that amount and the registrar of the court can order the judgment debt to be paid (r 666 Uniform Civil Procedure Rules 1999 (Qld) (UCP Rules)). If the defendant does not pay the whole amount, the plaintiff can enforce the judgment (see Recovering a Judgment Debt). Alternatively, the defendant can pay the money claimed (as well as an amount for the plaintiff’s costs) to the court at any time before the hearing of the matter (r 560 UCP Rules). If the amount paid is the full amount of the debt, the plaintiff is notified by the court and the money is paid to the plaintiff. If the plaintiff is not satisfied with the amount, the court action can proceed.
A defendant who wishes to dispute the debt must file a notice of intention to defend and the defence within 28 days of receiving the claim. The form must be filed at the court from which the claim was issued and served on the plaintiff (rr 139–142 UCP Rules). Once the defence is filed, the plaintiff cannot obtain a judgment against the defendant without a court hearing. This does not prevent a defendant from later admitting all or some of the claim or negotiating to settle the claim.
The defence must refer to each and every allegation in the claim and specifically state whether each allegation is admitted, not admitted or denied (r 165 UCP Rules). A defendant must make reasonable enquiries to establish the truth or otherwise of each allegation in the claim before filing and serving a defence:
- If an allegation is admitted, the plaintiff does not have to prove that fact at trial, and the defendant cannot say that the fact does not represent the true situation.
- If an allegation is not admitted, the defendant is not entitled to lead evidence at trial about that fact, although the plaintiff must still prove it. A fact that is known only to the plaintiff and cannot be discovered by the defendant after reasonable enquiry may not be admitted.
- If an allegation is denied, the fact must be proved by the plaintiff, and the defendant is allowed to lead evidence at trial to rebut the plaintiff’s claim. A defendant must state the reason why a fact is denied in the defence.
If Carol claims that she loaned David $100, and David agrees that the money was loaned but says that he repaid the debt, David should say in his defence:
As to the allegation that Carol loaned me $100, this is admitted.
I deny that the money is still owing and believe this to be untrue. I paid Carol back the $100 on 1 September 2015.
Once a notice of intention to defend and the defence is filed and served, the plaintiff may file a reply.
The parties will each prepare a list of documents relevant to the debt and the issues in dispute and exchange copies of these documents.
The court will likely order the parties to try and resolve the claim through alternative dispute resolution before progressing the matter to trial (ch 9 pt 4 UCP Rules).
Parties may also make formal, written offers to settle at any stage of the proceedings, up to delivery of the judgment (ch 9 pt 5 UCP Rules). If the defendant makes an offer to settle, and the court ultimately awards the plaintiff no more than the amount the defendant offered, then the plaintiff may be liable to pay the defendant’s court costs (r 361 UCP Rules). Similarly, if the plaintiff makes an offer to settle that is less than the amount awarded by the court, then the court may order the plaintiff to pay the defendant’s costs (r 360 UCP Rules). Both parties should therefore accept reasonable offers to settle.
In the event that it is not possible to resolve the claim through alternative dispute resolution or settlement offers, the matter will proceed to trial.
In some courts, the date allocated for the hearing of the claim will only be a date for a mention. If so, the plaintiff’s claim may not be heard on that day. Instead, the magistrate or judge will check on this day to see if both parties are ready to proceed and if so, set a date for the hearing. Whether the date is for mention or hearing can be checked by telephoning the court registry.
The plaintiff or defendant can personally put their respective cases in court or can be represented by a barrister or solicitor.
If the plaintiff does not appear in court, the claim may be dismissed. Similarly, if the defendant does not appear at the time set down for the hearing, the judge can proceed with the hearing in the defendant’s absence (r 476 UCP Rules). In either case, the court will need to be satisfied there is evidence to establish an entitlement to judgment by the party present. If the plaintiff or the defendant is not ready to proceed on the date specified, that party can ask the judge for an adjournment (r 477 UCP Rules). However, the party asking for the adjournment may have to pay the legal costs incurred by the other party in coming to court to have the hearing adjourned.
If a plaintiff or defendant is ill or has other commitments on the hearing day, they should ring the other party or the solicitor acting for the other party before the hearing and ask them to consent to an adjournment. If this is refused, it will be necessary to go to the court on the day of the hearing to explain what has happened. The magistrate or judge may then adjourn the hearing to another time. The absent party will usually be ordered to pay the other party’s costs for the wasted day, if the court agrees to the adjournment.
At a trial:
- each party will make an opening statement to the court
- the plaintiff (or their representative) will then present evidence to the court in relation to the debt. This evidence can be in the form of documents or evidence of witnesses (who may be cross-examined by the defendant)
- once the plaintiff has lead their evidence, the defendant will have an opportunity to respond and to present their own documents and evidence of witnesses (who may be cross-examined by the plaintiff)
- once all the evidence has been presented, the parties will make closing arguments
- the judge will then weigh up all the evidence and make a decision. If the judge is unable to provide their decision on the spot, usually it will be given within three months and the parties will be called back to the court to receive the judgment
- generally, the judge will order the losing party to pay the court costs and legal costs of the winning party (calculated on a set scale) plus interest.
The legal costs of civil court proceedings can be very expensive for a losing party. In many cases, both parties will be better off negotiating a settlement of a debt claim.