Dancing with the Blind Lady: A Laypersons Experience

After the Letter

2006-05-17T22:18:00.000+08:00

A fair amount of the Dance with the Blind Lady is spent sitting against the wall waiting. It tends to go like this .. flurry of activity, then wait .... flurry of activity, then wait. If you're doing this through a lawyer then add even more waiting time; the flurry is more like a slow stumble.

The Letter of Demand was finally sent and payment requested within a short time frame, with the consequence being the commencement of legal action to recoup the outstanding repayments.

There was no reply. Nothing.

I was rather peeved the lawyer had not sent the letter by registered mail as that meant we had no proof the letter was received by the other party. However, if this became an issue down the line I could prove I had used every method available to me to try open a dialogue with the other party over this matter.

What Comes Next?
There's no use making a 'threat' if you aren't prepared to carry it out in my book. There had been no response to the Letter of Demand so it was time for legal action to commence.

Whilst I had drawn up many summons' in a former life I paid the lawyer to draw up the summons for me. Not wanting to throw more money towards the lawyers Ferrari purchase however, I advised them I would lodge the documents myself.

Compromise
There's nothing scarey about lodging documents at court, it is something you can do yourself. I knew that my decision to continue on by myself would make things more drawn out but I would be in control of what happened when, and that was a compromise I had to make (money/time/control). It made it drawn out because I work full-time and had to wait for my monthly day off to get to the court to lodge the documents.

Because the lawyer had drawn up the court documents I was able to claim an amount for legal fees together with the court fees and the repayments that had been missed. Just like health insurance though, there is a 'gap'. You don't get to claim all your legal fees up to that point; the court sets an amount you can claim, which is considerably less than you will have actually paid your lawyer up to this point (so if you can get this far without a lawyer then do it!)

Note the court staff cannot give you legal advice. They can tell you how to fill out a form or what form you need and how much it will cost, but they cannot give you legal advice; they are not lawyers.

At this point you need to have a physical address for the person who owes you the debt. It used to be possible (when I issued my first two summonses) to have a summons served by person-to-person registered mail, but since May 2005 this is no longer possible in Western Australia (May 2005 is when various courts, including the Local Court, combined to form the Magistrates Court, and al manner of things changed).

My summons was stamped, I paid the fee and the summons was off to the Bailiff to be served. You can arrange service yourself, but in a straight forward matter I'd recommend you have the Bailiff do it. I haven't researched private service fees, but I would expect they'd be more expensive than the Bailiff fees.

And so now I had to wait again. After the person is served with the summons they have 14 days in which to make some kind of response to the court.

So I waited.....

Cheap, Legal Letter of Demand

2006-05-14T00:18:00.000+08:00

If you're not certain about writing your own Letter of Demand, but don't necessarily want (or are able) to go to the expense of hiring a lawyer to do it for you, AND you're in Australia, you're in luck!

At this website for the princely sum of $55 (Aussie dollars) you can have a Letter of Demand prepared.

Included in the price is also a Claim (used to be called a summons)!

This particular website would recommend that you send a copy of the draft Claim with your Letter of Demand to show the other party how serious about this you are.

My lawyer recommended against this, saying that it is seen as unecessarily harsh by some judges.

I think the $55 well worth spending - at the very least for the first time you need to prepare either one of these documents (as you can then use it as the basis for further letters/claims if you have need to issue more in the future).

The Letter of Demand

2006-05-09T20:00:00.000+08:00

Back to normal programming ..

Some important points regarding your Letter of Demand:

1. In it you must request payment
2. Be sure to state the amount
3. State what the debt relates to .. eg purchase of goods or services, money lent
4. Attach a copy of relevant documents .. eg invoice, contract
5. Give a date/number of days by which payment is required .. eg within 7 days of the date of this letter (otherwise they can say 'oh, I thought it was 7 days from the day I received it, or the day I read it'), by the 30th Somemonth 2006
6. Be objective, this is not a place for emotive language, name calling etc.
7. State the consequences of non-payment .. eg commencement of legal action, referral of the debt to a collection agent.

And finally,

8. Send the letter by registered person-to-person mail.

Point 8 means you will receive a confirmation slip from the post office with the persons signature, this confirms that the person did receive the letter. They can't say they never got it, didn't know about it etc etc.

If your lawyer is sending the Letter of Demand ensure you get to read a copy before it is sent.

My lawyer didn't do this ... and didn't send the letter by registered mail. Even worse is that they used the phrase "within 48 hours of receipt of this letter".

By not sending the letter by registered mail there was no proof as to when the letter was received. To me this wasn't ideal and I would have picked it up if I'd seen a draft.

Again, don't trust your lawyer!

But at least a letter was finally sent.

Jumping Ahead of the Story ...

2006-05-06T20:39:00.000+08:00

Claim Served
I received a noticed from the court recently that a Claim had, at last (long story, you'll hear about it later), been served.

Going through the legal process is basically a series of lodging documents and then waiting, and waiting.

Having lodged a Claim at Court you then, if having the Bailiff serve the documents, have to wait until they are served; the Court will send you notification of this.

If you think this is a time for some action on your part you are mistaken. The Defendant then has 14 days to make a response. The response will generally be to the Court, and so, of course, you have to wait a bit more as the Court has to then forward it to you.

Only after those 14 days are up is there anything else that you can do. Believe me, the Court staff actually get out a calendar and check that 14 days have indeed passed since the date the Claim was served - yep, been there done that.

My 14 days of waiting are up, but I will leave it a few more days (until my next day off most likely) until I take the next step; just to be sure time has been allowed for a response.

So if you're having a Claim issued against someone, don't necessarily celebrate when you receive the notification of service; it doesn't mean you can do anything else just yet.

Perhaps this sounds rather pessimistic to some of you, and you could be correct. Most people who are served with legal papers would do something about it pretty quickly, however that hasn't necessarily been my experience with this particular person.

When to See a Lawyer

2006-05-03T21:05:00.000+08:00

This is only *my* idea as to when *I* need to see a lawyer. Everybody is different so do not take this as necessarily relevant to you. We all have differing levels of education and emotional strength.

Note: This doesn't only apply to debt collection!

Even if you are very confident of what you're doing/how you are proceeding I would still recommend that you at least consult a lawyer just to check. Better to do this at the start/before lodging court documents than to be given a stern talking to by a judge/magistrate and perhaps do your case unintentional damage.

1. When you have no idea what to do - pretty much goes without saying. They will advise you as to your options, the pros and cons of each and an estimate of the costs of each option. They'll probably recommend one particular option, but don't let them railroad you into doing something that goes against your grain (see post below).

2. When you know what you want to do, have the capacity to do it but don't know how to go about it. Your lawyer will advise you on how to proceed and the pros and cons of your planned course of action. They should also advise you on the process involved, and related costs to proceed.

3. If you know what you want to do, and that it's legal/appropriate, but do not have the capacity to carry it out. This could be for various reasons:

work - working full time can make it hard to get to court, and other places, to lodge/retrieve necessary documents,
health - being unwell/incapacitated can impact on your abilities to do the above as well,
emotional - if dealing with the matter is emotionally difficult for you then it might be best to get the lawyers to handle it,
stress - if you handle stress poorly this can also be a reason to have the lawyer handle the matter for you.

4. To give the other party notice that you are serious - this is the reason I had a lawyer write and send the Letter of Demand for me.

5. You know what you want to do, that it's appropriate, and how to do it. Still I suggest you seek counsel from a lawyer before you proceed, just to make sure.

6. You have money to burn.

The saying goes that in any legal matter the only people who win are the lawyers. I firmly believe this to be true however by being prepared, doing your own leg work (making copies of documents, getting copies of titles, preparing and lodging your own court documents etc) and seeking legal advice only when you need to you can minimize your legal costs.

Feel free to add to the list via the comments area!

Be Prepared for your Lawyer Appointments!

2006-05-02T22:54:00.000+08:00

The three (or is it four) lawyers that I've had occassion to visit during my lifetime have all been very up-front about how they charge.

They start off by saying it's x amount per hour, however it isn't charged by the hour. They divide the hourly charge by 10 and charge in 6 minute blocks.

If you make a phone call to them you get charged, if you send them a letter to read you will be charged their time for reading it and writing a reply. If you send them an e-mail you will be charged for them to read it and take whatever action you've instructed them to do. They will charge you if they have to take photocopies of documents.

This means that every minute you're interacting with your lawyer costs you money, so don't waste your time, their time or your money by talking about irrelevant matters! (Kinda goes without saying doesn't it)

How to Prepare
1. Write down, in dot-point form, the history/events leading up to the matter about which you are seeing your lawyer. After hearing an overview of why you are there to see them, one of the very first things all the lawyers I've seen have done, is to take a history. Chronologically is a good idea (as dates can sometimes be very important). Check back in diaries or through letters/e-mails if you have to. Better to do it now and be prepared than meet with the lawyer only to be told you need to get that information together before they can help you/start answering your questions.

2. If there are any written documents relating to the matter then take photocopies with you. It's far cheaper to go to the library or newsagents and make your own copies than to pay your legal firm to do it.

3.Be clear about the purpose of your interation with the lawyer and stick to the topic. If necessary write down the main reason you are seeing your lawyer and have it in front of you when you meet/talk with them to help keep you on track.

4. As the time of your meeting/interaction nears, write down the questions that you want to ask. We all know that conversations can get side-tracked and if you don't have your questions written down you might forget some of them due to the conversation going off on a tangent.

4. Do as much research yourself about the matter. Search the internet and the library. Whilst this wont often result in finding an answer to your question it may prompt you to think of other relevant questions to ask.

During the Meeting
Refer to the notes you prepared for your meeting whilst you are there and before you say goodbye. Ensure all the things you needed to ask have answers/are going to be answered.

It's my experience that lawyers only answer the questions that you*do* ask. Sometimes useful information has only come to light at a later date because I hadn't asked the question earlier.

It may be useful to talk to trusted folk about the matter as I have found that sometimes they think of questions that hadn't occured to me.

If you are talking with the lawyer on the phone make sure there is a clock to look at so you're aware of the passage of time and how much that phone call is costing you!

If you're seeing a lawyer you know you will have a hole in your pocket afterwards. It is, to a degree, within your control to influence how big a hole that will be!

Why I Went to a Lawyer

2006-04-30T19:54:00.000+08:00

Whilst I was quite capable of writing my own letter of demand, and a summons if it came to that, there were seceral reasons as to why I went to a lawyer.

1. Lack of Default Clause in the Deed of Agreement (DoA)
Having realised there were no default clauses in the DoA I needed legal advice as to what I could do to collect the monies owed to me.

A default clause would normally indicate what actions would be taken if th requirements weren't met; but I didn't have a default clause so I needed to find that out.

Whilst the DoA did say the the assets of the business were 'charged' with the loan, the business assets amounted to very little. The DoA also said that if he had purchased property that it would also be charged with the loan. I had a title search done (via the internet, cost was about AUD$6.50) which revealed he had not bought any property (not in his own name at any rate, and that is all that was important).

The advice was that I could sue him along the normal course of action when someone owes a debt.

2. Lack of Stamped Document
I was also unsure as to whether the matter of me not holding a stamped (eg officially) copy of the DoA affected the matter. I had rung the relevant government department and been told that the stamp duty had not been paid (by the other party).

The advice was that it didn't matter. Only a stamped copy of the document could be used in court though. If the matter proceeded to that point and the document had still not been stamped then the judge would be asking the other party why he had not paid the stamp duty (and most likely require that he do so).

So this was a non-issue.

3. What Amount?
Also due to the lack of default clauses I didn't know whether, in light of a default, I was required under the law, to seek the entire amount, or whether I could proceed with action only for the missed payments.

The advice was that I could do either i.e. proceed with collection of either the missed payments, or for the entire remaining balance of the loan.

4. Show I'm Serious
After seeing the lawyer and getting the answers to the above questions, I asked that the Letter of Demand be sent by the lawyer, rather than me, to show the other party that I was serious about this.

When I met with the lawyer I advised them I was capable of lodging my own summons and they were happy to send the letter and write up the summons for me and act on an 'advice' basis. i.e. to give me advice on an ad hoc basis when I needed it.

By writing letters and doing your own leg work (eg lodging documents at court yourself) you will save yourself money, however if you've been doing your own letter writing and not had any success then one coming from a lawyer shows to the other party that you've escalated your seriousness about the matter.

Other Relevant Background
Something else I realised I haven't mentioned is that I was aware the other party had at least two other debts for which he was being (or about to be) pursued by other creditors.

One of these was a similar amount to the repayments he had missed, the other was for about the same as the entire balance of the loan between us.

I was concerned that his other major creditor would take bankruptcy action against him.

This was another reason why I felt I couldn't just 'sit back' and wait for him to be ready to make payments again (together with the fact that I needed the money, and besides the point that, very simply, he owed me the money).

Coming up ... Don't Waste Your Money Talking About the Weather (or Be Prepared for Appointments with your Lawyer).

When You Can't Pay Your Debts .. Enter the Lawyer

2006-04-29T19:38:00.000+08:00

Payments were made for about 15 months (sometimes on time, other times not - but I wont go into that at the moment) and then stopped.

There are other factors that relate to this matter i.e. how we (my ex de facto partner and I) were, or weren't, getting on.

Without going into all the gruesome details I'll just say that at the time the payments stopped we weren't getting on well at all.

But did that give him reason to stop making the payments? To my mind it didn't. There was no clause in the DoA that said if we were no longer friends/friendly that he didn't have to repay the money.

I had to hand over my share of the business to him, not contact the clients and not be a director of a similar business within so many kilometres of our business for 12 months. In consideration of this he was to pay a deposit and then monthly payments for 5 years.

He got the business, I did not contact the clients and I did not become the director of a similar business. I did what the DoA said I was supposed to do.

He paid the deposit (in bits and pieces) later than he was supposed to, and began to make payments. Then stopped because he got angry at me.

Umm, hello?! I had met my obligations under the DoA, he needed to keep on meeting his, but no.

So This is How it Started....
I tried to contact him to discuss the matter. I sent messages by as many media as were available (letter, fax, voice mail, instant messages, text messages, e-mail, but never received any reply, nor acknowledgement.

Why did I send so many? Because I wanted to be sure that I had given him every opportunity to come to the table and talk about the matter.

I had done research on debt collection and a common thread was for the parties to try to come to an arrangement before anything else. So that's what I tried to do. I was prepared to re-negotiate the amount of the monthly payments if he were in financial difficulties (which I knew, from prior discussions with him, was quite possibly the case).

But he never replied.

By not replying to any of the communications I sent him he left me no choice than to start legal proceedings. Perhaps that would be reason enough for him to communicate with me.

So I sought assistance from a lawyer who specialised in debt collection. I thought that perhaps a letter from a lawyer would show him that I was serious about this, and get some communication happening.

Help (?) From the Law
I asked the lawyer to send a Letter of Demand. By this time two payments had been missed, totalling just under AUD$2,000.00.

A Letter of Demand is basically the precursor to commencing legal action to collect a debt. It basically requests payment be made, within specific time frame, and that failing payment, or contact with the author, that legal action to collect the debt will commence.

In Australia, particularly if you are using the services of a lawyer to lodge your legal actions for you, a Letter of Demand must be sent before legal action commences.

The letter was to be sent the following day either after I had approved a draft or with a copy being sent to me.

What The Lawyer Suggested
He suggested that we 'escalate' the debt. This means rather than commencing action (if there was no reply from the other party) for only the repayments that had been missed, that we would go for the whole remainder of the loan amount.

I didn't like this idea. Whilst I needed the money that was owed to me I wasn't looking to make life difficult for my ex-partner. I just wanted him to make the payments monthly as he was meant to do.

I was a bit surprised at this too, due to the lack of default clauses in the DoA. The lawyer assured me we could do either (just the missed payments, or the entire balance owing).

I advised him I only wanted the missed payments to be made up, and then monthly repayments to continue as they were meant to.

Lesson Learned
The lawyer is there to advise you, but it's your matter. Whilst they can give advice it is your decision as to how to proceed. If what they suggest doesn't suit you then (as long as it's legal) get them to do the thing that does suit you.

If they are pointing you down one path and you don't particularly want to take that path, then ask them what alternative ways there are of proceeding.

Action Plan from Lawyer Visit
The lawyer was to draft a Letter of Demand and send it to the other party. As I said, the lawyer was very gung ho about it and I made him aware this was an urgent matter for me.

The letter was to be sent the day after my appointment.

A week later I still hadn't received anything - not a draft nor a copy of the letter that had been sent.

I rang to find that nothing had been done (for which there were reasons given).

Finally, about two weeks after my first appointment, the letter was sent.

Lesson about Lawyers
Keep your lawyer honest! If things don't seem to be happening when they should get on their backs!

I'm not the only one for whom this has been the case; others' that I know have had similar experiences with lawyers - you need to stay on their case to keep things moving.

I guess we're influenced to much by what we see on TV, but don't think your lawyer is going to be taking a personal interest in your case. My experience is that they don't, and they don't really seem to care at all.

They don't follow up on things without prodding.

This is your matter, not your lawyers. So if you want to be sure that things are happening keep on their backs and make sure things do happen!

I wish I had learned this lesson earlier than I did.

Loan Documents

2006-04-26T20:24:00.000+08:00

The details of the loan are contained in the Deed of Agreement (DoA).

It states how much is being borrowed, the interest rate (and how it is calculated - e.g. daily), the period of the loan (5 years), the amount and regularity of the repayments.

Remember that the DoA was drafted by a lawyer; I assumed it would have all the appropriate parts in it. I am not a lawyer and had never give this kind of a loan to anyone before, so I didn't know what should and shouldn't be in the document.

I could have read a couple of the loan documents from when I had borrowed money in the past, but I didn't (don't scoff at me - have you seen them, they're huge! Oh I did read them at the time of taking out those the loans, but didn't think to re-read them when arranging to lend money).

What's Missing Here?
It was only when things stopped that I came to realise there was something fairly important missing from the details of the loan in the DoA.

There were no default clauses.

A default clause details what will happen if the (either) party doesn't do what they're meant to do ie. if he stops making the repayments.

On your mortgage it probably says something like the bank can sell your home to recoup the monies you haven't repaid them.

Default clauses also usually include a statement saying that the defaulting party has to pay the costs of recoupment (eg legal fees the other party incurs as a result of the default).

I was horrified when I realised there was no default clause in our DoA. I was really mad with the lawyer, but couldn't do anything about it.

So if you make a loan to someone, and have that loan documented then ensure there is some kind of default clause. Spell out what will/can happen if either party renegs on the deal!

All was not lost however....

The Loan - Important Factors

2006-04-26T19:52:00.000+08:00

There are some important facets to this matter that have allowed me to proceed in the manner I have, and I think these should be made clear.

1. The Debt is Documented
The debt is contained within a legally recognized document - the Deed of Agreement (DoA).
This Deed was drafted by a lawyer and was lodged with the appropriate state government body to be 'stamped'.
I made copies of the document before sending it to the government. Just as well, since the other party (- the purchaser pays the stamp duty here) has never sent me a copy of the properly 'stamped' document. The government doesn't keep copies of the documents, so once they've processed it you cannot get a copy from them.

2. The document is signed
I made the copies after it had both of our (witnessed) signatures on it. To me the value of such a document is diminished if it does not have both parties' signatures on it (either one could say they never signed it).

3. The debt is established
By this I mean that history and actions show that both parties were well aware of, and had shown intent to keep to the agreement set out in the DoA.
This is shown by the fact that he did in fact make payments, basically in accordance with the DoA, for a period of 15 months. Also by the fact that if payments were late/not in accordance with the DoA I advised him of such and requested that payments be made.

4. Meeting Obligations
For a period of time both parties met their obligations (in the main) under the DoA. Again this shows that the agreement was in operation. To me it was important that I had met my obligations under the DoA, not just him. Partly that's just because I'm a responsible kind of person and I take my obligations seriously. I don't know whether the law puts any weight on this.

The debt didn't have to be documented for me to be able to enforce payment, however it makes it a hell of a lot easier to establish that a debt, of which both parties are aware, and which is detailed in regards to it's nature (the DoA sets out the amount, the period over which it is to be paid, the interest rate, the amount of each payment and the timing of the payments) does exist.

Point 3. above establishes that the borrower agreed to the terms as he was making payments in accordance with the agreement (ie if he didn't agree with it he wouldn't have made the payments, certainly not for that period of time). The more payments he made, the more this is shown. Even if the agreement hadn't been documented, his actions show that there was an agreement in operation.

So from the start I had a good basis on which to pursue the borrower for payment.

He had wanted to make it a 'gentlemans' agreement', a 'private' arrangement - so that I could 'hide' it from the government and not have to declare the income. He should have known better than to think I would want to do that - I'm not the kind of person who does those kinds of things.

I also wanted the loan documented because of what I knew about his financial history and his level (or lack thereof) of responsibility/attitude towards debt; I did have some doubts that he would make all the payments.

Some would perhaps ask why then did I make the loan? I made the loan to get (us both) out of a bad situation that was only ever going to get worse - working together after we had stopped being intimate partners and him with a green-eyed, untrusting new girlfriend (the one for whom he left me).

I'm so glad I didn't bow down to his request and so glad that I had the loan documented, lacking, though it was, in some regards.

I strongly recommend, if you are in the position of lending a large amount of money, that you have your loan documented.

Legal Matter No. 1 - The Loan

2006-04-22T22:55:00.000+08:00

Legal Matter No 1. is currently in progress. It is about a loan between me (as the lender) and my ex-de facto partner (the borrower).

About 9 months after my de facto partner and I parted ways on a personal level we parted ways on a business level. I sold my share of our business to him. This was documented in a legal agreement known as the 'Deed of Agreement' (DoA).

As he didn't have the ability to borrow funds the DoA included that he was to make repayments to me over a period of 5 years (ie to pay for the share of the business he was buying from me).

He made payments for just over a year (15 payments) then stopped (the reasons for which I might explain/be revealed as this blog progresses).

I wrote letters, sent e-mails, left voice mail messages, sent faxes, text messages - all with no reply.

So I turned to the law for assistance.

This matter is currently in progress so you can expect to see a fair number of posts about this.

I Am ... (The Obligatory Introduction Post)

2006-04-22T22:49:00.000+08:00

I am a middle aged female living in Perth, Western Australia.

I have been married and am divorced (very amicably, yes it is possible).

I have had a de facto relationship which has ended - very unamicably.

I work fulltime, and for 7 years ran a business with my de facto partner (see above).

I completed 12 years of school, half completed a degree at university (social sciences) and have completed a large number of TAFE units (human resource development/management related).

I am considered intelligent, logical and fair by my friends and family.

I think that's all you need to know for now. If you want to know more post a comment.

With What Authority Do I Write? and Disclaimer

2006-04-22T22:34:00.000+08:00

I am NOT a lawyer. I am a layperson when it comes to legal matters. None of the posts on this blog constitute legal advice.

If you are involved in a legal matter I urge you to obtain independant legal advice.

So why is it that I think I can write about legal matters, considering I am not a lawyer, have never studied law, never worked for a law firm.

I can write about that thing which most people write about - personal experiences.

Again I will say it - this blog is about my experiences with legal matters. The process(es) I go through may not be suitable for your own situation. The way things go for me may not be the way things go for you. The right way for me to proceed may not be the right way for you to proceed. IF YOU ARE INVOLVED IN A LEGAL MATTER PLEASE SEEK INDEPENDANT LEGAL ADVICE.

Ok - I think I've said that enough. On to meatier posts.