Unpaid invoices in Australia

IGraham Lacey (TCM Australia)

It’s 10 a.m., at least in Tienen. Graham Lacey – the manager of Upper Class Collections – calls in from a café in Vientiane Laos, his current home.

Since 2016, Upper Class Collections has been our TCM Group partner in Southeast Asia and Australia. The best chance of collecting your unpaid invoices in these regions is by relying on Graham’s extensive team.

TCM Australia

We met Graham in person for the first time at TCM Group’s AGM in Chile, as one of the newest partners within TCM Group for the collection of unpaid invoices in Australia.

TCM Australia has been operating in Australia for the collection of unpaid invoices since 2006. After joining the TCM Group, it became clear that there was also a high need for quality collection agencies in Southeast Asia that the group could confidently entrust with international files. The TCM Group has high standards for partners wishing to join.

Graham decided to take on the challenge and opportunity, and in the meantime built a strong network in Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. Local teams collect invoices for international clients in all sectors, meeting all TCM Group requirements. Graham’s ambition is to operate locally in every country in the region, if politically and economically possible. The next country on the schedule is Thailand, where he hopes to register a local office soon.

How are debts culturally perceived in Australia?

Short temper

Graham: “As an Australian, being from Perth myself, it is permissible for me to say that we have a short fuse. At least compared to Asians. It is not taboo to be in debt, but people can sometimes come out aggressively when faced with debt.”

Visits on site

So are home visits out of the question? Graham: “No, visits are legal, and we offer that service to our clients. However, Australia is one of the largest countries in the world, so the price will depend on the location of the debtor. When a debtor tells us to disappear from his/her property, we do have a legal obligation to respect that wish. This applies equally to unwanted telephone contact; if a debtor indicates that he/she no longer wishes to be called, we must respect that.

How is the legal system organized in Australia for collecting unpaid invoices?

General obligations

Graham: “The debt collection industry in Australia has been strictly regulated since the 1960s. Firstly, a debt collection agency must be registered and licensed to conduct debt collection activities, but it is not difficult to obtain that. We must pay a  AUD $10 000 surety (bond) and all directors must have a clean Police record.

The law protects the debtor, it is up to the creditor to prove there is a debt, without proof, sending a reminder to a debtor is considered harassment. We are also not allowed to say anything that is not correct. For example, legal action must not be threatened if a creditor has no intention of effectively proceeding to legal action.”

Costs and interests

What counts as proof of debt? Are specific documents required? Graham: “In itself, that evidence is not that different from Belgium/Europe when it comes to collecting invoice amounts. Invoices, order forms, contracts, mail communications, … . However, the difference lies in the collection of interest and costs due to late payment. Forwarding general terms and conditions as justification for this extra is not enough. The creditor really needs to be able to prove that the debtor has agreed to pay late-payment fees before the service or product was supplied. For this reason, a signed contract is a must.

In Belgium, and according to recently adapted Belgian legislation, it is sufficient to make the general terms and conditions known online and refer to them on the invoices. Graham: “Not in Australia, because invoices usually only follow after the good or service has been requested/performed.”

If it cannot be proved that the terms and conditions have been accepted, can there be recourse to legal costs and interest? Graham: “In Australia, legal interest (I think a 6%) can only be added after obtaining judgment.“

Types of legal procedures

Is it expensive to initiate legal proceedings in Australia? Graham: “That depends on the size of the debt. The legal system in Australia is regulated by state. I base my explanation on the example of Western Australia, which may differ slightly in terms of breakdown of amounts or naming from the other states, but in essence it will all be similar. For the types of debts we need to collect, there are four types of courts that we can face.

There is the small claims court for debts up to AUD $10,000. Lawyers are barred in these proceedings, and the proceedings can even be conducted by telephone. This also explains why these proceedings are not expensive at all (a few hundred AUD $ to start).

The Magistrates Court handles cases up to AUD $75,000. These proceedings require you (or a representative) to be physically present, and usually a lawyer is also engaged. Enlisting the services of an lawyer will make these proceedings more expensive. Quickly count on a 2000 AUD $ to start.

The District Court handles files between AUD $75,001 and AUD $750,000. A lawyer is required as well as the physical presence of both parties, as is the case for files handled by the Supreme Court (AUD $750,001 and above). To start proceedings before the District Court and Supreme Court you can pay AUD $3000 to AUD $5000 just to get the summons served.

The cost of a bailiff starts at around AUD $150, but can quickly rise to AUD $5000 depending on the type of action, as well as the number of kilometers to be covered (kilometers are charged), the price will vary.

Court fees can be recovered in case of a positive judgment and will be added to the debt. 

Statute of limitations

When does a debt become time-barred in accordance with Australian law? Graham: “For both B2C and B2B matters, the statute of limitations is 6 years. If the debt is acknowledged, another 6 years will follow. There are exceptions to this statute of limitations, such as parking fines (2 years), but generally it is 6 years for the debts we deal with.”

Thanks for this talk Graham!

Do you have questions about collecting unpaid invoices in Australia? Please do not hesitate to contact us at s.dereze@tcm.be, or 0498 29 29 14.

28/06/2024

Unpaid invoices in Australia

IGraham Lacey (TCM Australia)

It’s 10 a.m., at least in Tienen. Graham Lacey – the manager of Upper Class Collections – calls in from a café in Vientiane Laos, his current home.

Since 2016, Upper Class Collections has been our TCM Group partner in Southeast Asia and Australia. The best chance of collecting your unpaid invoices in these regions is by relying on Graham’s extensive team.

TCM Australia

We met Graham in person for the first time at TCM Group’s AGM in Chile, as one of the newest partners within TCM Group for the collection of unpaid invoices in Australia.

TCM Australia has been operating in Australia for the collection of unpaid invoices since 2006. After joining the TCM Group, it became clear that there was also a high need for quality collection agencies in Southeast Asia that the group could confidently entrust with international files. The TCM Group has high standards for partners wishing to join.

Graham decided to take on the challenge and opportunity, and in the meantime built a strong network in Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. Local teams collect invoices for international clients in all sectors, meeting all TCM Group requirements. Graham’s ambition is to operate locally in every country in the region, if politically and economically possible. The next country on the schedule is Thailand, where he hopes to register a local office soon.

How are debts culturally perceived in Australia?

Short temper

Graham: “As an Australian, being from Perth myself, it is permissible for me to say that we have a short fuse. At least compared to Asians. It is not taboo to be in debt, but people can sometimes come out aggressively when faced with debt.”

Visits on site

So are home visits out of the question? Graham: “No, visits are legal, and we offer that service to our clients. However, Australia is one of the largest countries in the world, so the price will depend on the location of the debtor. When a debtor tells us to disappear from his/her property, we do have a legal obligation to respect that wish. This applies equally to unwanted telephone contact; if a debtor indicates that he/she no longer wishes to be called, we must respect that.

How is the legal system organized in Australia for collecting unpaid invoices?

General obligations

Graham: “The debt collection industry in Australia has been strictly regulated since the 1960s. Firstly, a debt collection agency must be registered and licensed to conduct debt collection activities, but it is not difficult to obtain that. We must pay a  AUD $10 000 surety (bond) and all directors must have a clean Police record.

The law protects the debtor, it is up to the creditor to prove there is a debt, without proof, sending a reminder to a debtor is considered harassment. We are also not allowed to say anything that is not correct. For example, legal action must not be threatened if a creditor has no intention of effectively proceeding to legal action.”

Costs and interests

What counts as proof of debt? Are specific documents required? Graham: “In itself, that evidence is not that different from Belgium/Europe when it comes to collecting invoice amounts. Invoices, order forms, contracts, mail communications, … . However, the difference lies in the collection of interest and costs due to late payment. Forwarding general terms and conditions as justification for this extra is not enough. The creditor really needs to be able to prove that the debtor has agreed to pay late-payment fees before the service or product was supplied. For this reason, a signed contract is a must.

In Belgium, and according to recently adapted Belgian legislation, it is sufficient to make the general terms and conditions known online and refer to them on the invoices. Graham: “Not in Australia, because invoices usually only follow after the good or service has been requested/performed.”

If it cannot be proved that the terms and conditions have been accepted, can there be recourse to legal costs and interest? Graham: “In Australia, legal interest (I think a 6%) can only be added after obtaining judgment.“

Types of legal procedures

Is it expensive to initiate legal proceedings in Australia? Graham: “That depends on the size of the debt. The legal system in Australia is regulated by state. I base my explanation on the example of Western Australia, which may differ slightly in terms of breakdown of amounts or naming from the other states, but in essence it will all be similar. For the types of debts we need to collect, there are four types of courts that we can face.

There is the small claims court for debts up to AUD $10,000. Lawyers are barred in these proceedings, and the proceedings can even be conducted by telephone. This also explains why these proceedings are not expensive at all (a few hundred AUD $ to start).

The Magistrates Court handles cases up to AUD $75,000. These proceedings require you (or a representative) to be physically present, and usually a lawyer is also engaged. Enlisting the services of an lawyer will make these proceedings more expensive. Quickly count on a 2000 AUD $ to start.

The District Court handles files between AUD $75,001 and AUD $750,000. A lawyer is required as well as the physical presence of both parties, as is the case for files handled by the Supreme Court (AUD $750,001 and above). To start proceedings before the District Court and Supreme Court you can pay AUD $3000 to AUD $5000 just to get the summons served.

The cost of a bailiff starts at around AUD $150, but can quickly rise to AUD $5000 depending on the type of action, as well as the number of kilometers to be covered (kilometers are charged), the price will vary.

Court fees can be recovered in case of a positive judgment and will be added to the debt. 

Statute of limitations

When does a debt become time-barred in accordance with Australian law? Graham: “For both B2C and B2B matters, the statute of limitations is 6 years. If the debt is acknowledged, another 6 years will follow. There are exceptions to this statute of limitations, such as parking fines (2 years), but generally it is 6 years for the debts we deal with.”

Thanks for this talk Graham!

Do you have questions about collecting unpaid invoices in Australia? Please do not hesitate to contact us at s.dereze@tcm.be, or 0498 29 29 14.

28/06/2024