The Debt Recovery Process - Part 2: Commencing Legal Proceedings

February 19, 2026

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As discussed in Part 1 of The Debt Recovery Process, it is important to carefully  consider the approach taken to recover due and owing monies and the quality of debt recovery assistance sought. 

Once a Letter of Demand has been issued and the debtor still continues to be indebted, there are a variety of options available to the business to recover the debt. The most common form of recovery is commencing legal proceedings against the debtor. Depending on the monetary amount, this can be done in a number of jurisdictions. 

For claims less than $75,000, proceedings will be commenced in the Magistrates Court. For claims between $75,000 and $750,000 proceedings will be commenced in the District Court. For claims above $750,000, proceedings will be commenced in the Supreme Court. 

Magistrates Court

The Magistrates Court is further split up into two jurisdictions. The Minor Case division handles matters of a monetary amount of less than $10,000 and the General Case division handles matters of a monetary amount of more than $10,000. 

The process in both divisions is substantially the same. The notable differences are that: 
  1. legal representatives are not permitted to act on a parties behalf in the Minor Case division without permission being granted by the Magistrates Court; and 
  2. legal costs incurred in connection with a Minor Case claim are typically not recoverable from the unsuccessful party.  
Otherwise, the process is summarily as follows:
  1. Proceedings are commenced by the Claimant against the Defendant by lodging and serving a General Procedure Claim.
  2. The Defendant is then given an opportunity to lodge and serve a Response.
  3. If the claim is defended, the Plaintiff is then required to lodge and serve a Statement of Claim.
  4. The Defendant is then given an opportunity to lodge and serve a Statement of Defence.
  5. The parties will then typically undertake the Discovery process whereby copies of all documents relevant to the claim are exchanged.
  6. The claim would then be listed for a Pre-Trial Conference. This is a without prejudice and confidential conference before a Registrar of the Court whereby the parties attempt to settle the claim. 
  7. If the claim is not settled at the Pre-Trial Conference, the parties are then required to lodge and serve statements from witnesses and experts in support of their claim.
  8. The claim would then be listed for a trial before a Magistrate who will make a determination. 
The above process typically takes between 12 and 18 months.
 
District Court and Supreme Court

The process in the District Court and Supreme Court is substantially the same as that in the Magistrates Court except:
  1. parties are automatically entitled to legal representation (and for companies are mandatory);
  2. legal costs are recoverable from the unsuccessful party in accordance with the scale set by the Legal Costs Committee (except in certain circumstances); 
  3. the party commencing the claim is known as the Plaintiff (not the Claimant); and
  4. it can take slightly longer to get to a trial (between 18 and 24 months).
Conclusion

Legal proceedings can be timely and costly so it is important to engage professional assistance to ensure you are giving yourself the best opportunity to recover a debt owed to you.

By Danielle Edwards (Associate)

If you would like further information in relation to how the above matters may affect your business, please contact us on (08) 9321 5451 or by email at office@bailiwicklegal.com.au.

For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/

The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
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