Application for Payment by Instalments – NCAT Orders – What is the Value of Builder’s Licence?

30/03/2021

If you have an Order from NCAT in your favour you need to consider your options to best achieve your desired outcome which almost always, is to receive payment of the outstanding money due to you.

Section 107 of the Civil Procedure Act 2005 allows a Court to make orders allowing for payment of Judgment Debt by instalments.  Section 105 provides in part a Court in which Judgment has been entered may upon certain circumstances make an order allowing for payment of the Judgment Debt by instalments payable in such amounts and at such times as are specified in the Order. 

The Uniform Civil Procedural Rules sets out requirements of the Debtor when making an Application for an Instalment Order.

In Hellier Captial Pty Limited v Richard Albarran, Mr Justice McDougall referred to Rule 869 of the Uniform Civil Procedures Rules 1999 (QLD) which sets out the following pre-requisites for an instalment order:

1. Whether the enforcement debtor is employed;
2. The enforcement debtor’s means of satisfying the order;
3. Whether the judgment debt including interest will be satisfied within a reasonable time;
4. The necessary living expenses of the debtor and the enforcement debtors dependents;
5. Other liabilities of the debtor;
6. If the Applicant is the debtor whether having regard to the availability of other enforcement means making the order would be consistent with public interest of enforcing money orders efficiently and expeditiously.

Mr Justice McDougall said:

• At [8] “an instalment ought not be made if the judgment debtor’s means are sufficient to enable him or her to pay the judgment debt immediately and in full.”
• At [9] “an instalment order ought not be made if it is obvious that to make it would be futile, because the judgment debtor could not meet his or her obligations under it”
• “The period of time for payment of the judgment debt (including interest) under an instalment order must be reasonable.  What is reasonable is a matter of fact in each case and requires attention to the amount of the judgment debt and the time it would be satisfied if the proposed order is made”.

There is interest payable on the judgement debt and the instalments would need to be such that the overall debt is being reduced during the period.

It is critical that any Application is to be made to the Court in which the Judgment is entered. 

Enforcing NCAT Orders

In cases before the Civil and Administrative Tribunal the Tribunal Orders are often made as to the amount to be paid by one party to the another.  Such order is not a judgment.  One needs to convert the NCAT Order to a judgment to enable enforcement of the judgment.  This is by an administrative application to a Court of appropriate jurisdiction for the amount of the order.

For example, if the amount of the order was say $300,000 one would make an Application to the District Court of New South Wales for the judgment to be entered namely officially made by the Court.  Once judgment is entered then the judgment debtor would be able to make an Application to pay the said judgment by instalments.

Our Recent Case on behalf of an Owner

Our client the Homeowner in late 2020 obtained an Order from NCAT that the Builder pay approximately $300,000 to cover the cost of rectifying defective work.  The Builder offered to pay about $100,000 to settle the claim in full.  The Builder being a company, established to us that it had minimal assets and on a liquidation of the Builder, there would be no return to our client.  The offer was rejected by our client, the Homeowner.  The Builder increased its offer which was also rejected by the Homeowner.  The offer was significantly more than the Homeowner would receive in the liquidation of the Builder.

The Builder did not make payment of he amount ordered by NCAT and its licences was suspended for failure to pay the amount of the Order (as is the usual course).

If the Owner had registered the judgment in the District Court which he was entitled to do, the Builder could make an Application to Pay by Instalments.  However as our client the Owner had not made an Application to Enter the Judgment in the District Court, the Builder could not make an Application to Pay by Instalments and his licence remained suspended. 

If we had made an Application to Register the Judgment at the District Court on behalf of the Owner, the Builder would have had an alternative option of making an Application to Pay by Instalments and then once the Instalment Order had been made the usual course would be that the suspension of the licence would be uplifted by the Department of Fair Trading whilst the Builder complied with the Instalment Order.  There may be very good reasons why the Builder would need its licence for example, to complete other projects it was undertaking. And depending upon other factual matters, the Builder may no longer require the licence and would not need to continue the payment of the instalments. 

If the Builder’s Licence was no longer needed by the Builder and the Builder did not make payment of the amount as ordered by the NCAT for example, by failing to continue to pay the instalments, its Builder’s Licence could be suspended for failure to pay the amount of the order (as is the usual course). 

There are many circumstances where detailed knowledge of how the system works is of great advantage to achieve a commercial outcome that would not otherwise be achievable.

If you have any building and construction issues please contact our experienced building and construction lawyers at Watson & Watson Lawyers by contacting Richard Watson Accredited Specialist Building & Construction or his Personal Assistant, Shereen Da Gloria to discuss your matter and seek the appropriate and timely advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.