QLD Which State to File Debt Dispute?

[NotABabe]

Hi,

I am not sure if it's OK to ask several questions...

We are suing another company for the outstanding invoices (around $30000) they owed. A letter of demand was sent to them, their national manager confirmed all outstanding accounts would be paid but so far they have done nothing but using tactic to delay and avoid to pay.

We are a QLD based company, the head office of the other party is company "A" and it's in Sydney. The managers who represented the company "A", they have an office in QLD. When I looked up their details in ASIC, I realised these managers may be working under a different company "B". Even though the companies A and B only have 1 word difference. One of the managers signed the contract with us under the company A's title.

Our invoices were sent to these managers and the payments were made by the company A. During the process of pursuing the debt, the account payable of company A claimed that they don't process payments based on our invoices; they only pay what the managers report to them. That is, the managers process our invoices and send the reports to the company A, then company A will pay us. Most of the outstanding invoices were not paid at all, some of them were partially paid.

So my questions are:

1. Which state do I lodge the debt dispute, NSW or QLD? If we file the case in QLD, do we need to pay travel allowance to the defendants?

2. Can I list these managers as defendants, since they are responsible for the outstanding invoices according to the company A?

3. If we must consider the managers work under company B, can I still list them and the company A all as defendants?

4. In our invoice terms and conditions, we have a 10% late fee "per agreed payment terms". The agreed payment terms is 20 days as listed in the contract with company A. Some of the outstanding invoices were from 2012, are we allowed to charge 10% late fee per 20 days from 2012? If not, how do we determine the interest and late fee?

5. They are a national company, when I looked up on ASIC they have about 20 companies listed as no.1, no.2, no. 3... etc. all under the same name, same address but with numbers in the company name. If they shut down the company A or claimed company A had no money to pay, what can we do next to recover our money?

Thank you in advance, your help would be very much appreciated.

 

[Rob Legat - SBPL]

These are only general answers, based on the information you have provided:

1. Queensland. Companies are nationally registered, and the service/product was provided from Queensland. You don't have to pay for them to travel for the case, but they may make application for change of jurisdiction.

2. No. The contract was engaged in Company A's name, and not in the name of the managers. From what you've said, there's nothing to indicate the managers were not operating on behalf of the company.

3. No, see 2.

4. A late fee just for the sake of being a late fee may be determined by a court to be a penalty, which is not allowed. I'd get some advice on the wording and circumstances of that fee before considering claiming it. You may apply to the court for interest on the debt.

5. Unless you received a guarantee from someone to secure the payment, or can establish that the company was trading while insolvent - next to nothing.

 

[Rod]

I agree with Rob.

You may also be able to involve the directors of company A if company A has behaved illegally. This then potentially flows through to all the other companies if directors are subsequently disqualified and are directors of these other companies.

 

[NotABabe]

These are only general answers, based on the information you have provided:
1. Queensland. Companies are nationally registered, and the service/product was provided from Queensland. You don't have to pay for them to travel for the case, but they may make application for change of jurisdiction.
2. No. The contract was engaged in Company A's name, and not in the name of the managers. From what you've said, there's nothing to indicate the managers were not operating on behalf of the company.
3. No, see 2.
4. A late fee just for the sake of being a late fee may be determined by a court to be a penalty, which is not allowed. I'd get some advice on the wording and circumstances of that fee before considering claiming it. You may apply to the court for interest on the debt.
5. Unless you received a guarantee from someone to secure the payment, or can establish that the company was trading while insolvent - next to nothing.

Thank you so much Rob and Rod.

A couple years ago I was in the same situation unfortunately, got owed money. At the end we won the case by going after the couple who owed us money (personally, not their company). Because they did not display their ABN or ACN anywhere the whole time our services were engaged.

The judge said she could see they've got letterhead and business cards and everything, but nothing proved that they were a company and no reasons they shouldn't be held responsible for the debt.
The reason I asked the questions 2 and 3, was because it was a similar situation- they could say they worked for company A, but they were actually from a different company B.

I suspect that their structure is company A subcontracted out to company B and they all work under company B. And there are no evidence to show the company B is a legit company. When the account payable of company A claimed that these managers were responsible for the invoices, and these managers couldn't prove they were working for either company A or company B, we may go after them personally. (Their business cards and email signatures were different from company A; and company B had no ABN showing anywhere).

The late fee wasn't a bit issue, honestly we just want to get paid for the work we've done. The interest alone is not a small amount, they have owing from 2012. I looked up QLD and NSW "CIVIL PROCEDURE ACT 2005 - SECT 100 Interest up to judgment", hope this is the right term to look at.

Thank you both, you've been more than helpful, really appreciated.

 

[NotABabe]

I agree with Rob.

You may also be able to involve the directors of company A if company A has behaved illegally. This then potentially flows through to all the other companies if directors are subsequently disqualified and are directors of these other companies.

Hi Rod,

I just looked into ASIC and found out the company A and B (they have B1, B2 till B20, all the same name but with numbers) have the same directors. Previously I sent a letter of demand to those managers, and I implied that that's not the whole amount I was demanding; In good faith if they paid before the due date on the demand letter we wouldn't pursue the whole amount; otherwise we will of course.

So now the due date passed and they are not paying. I've calculated the whole amount of the outstanding accounts, listed the interest and late fee separately...

1. Do I need to send another letter of demand?

2. Can I send the demand letter to the directors of company A?

Thank you again.

 

[Rod]

1. No

2. Why? You have already sent a demand letter and if the company is smallish there's a high probability they will have seen the letter anyway.

 

[NotABabe]

1. No
2. Why? You have already sent a demand letter and if the company is smallish there's a high probability they will have seen the letter anyway.

Hi Rod,

Thanks for your reply again. I guess I was just being silly.

They "seem" like a national company with offices around all states. On ASIC they have more than 20 companies registered... I guess that doesn't mean anything. given that the case we won last time the couple had million dollars contracts and they worked from their garage.

I thought the directors may not know what one of the offices is doing.

Anyway, my previous question was because, the letter of demand I sent them, the amount was around $58000, no late fee or interest applied if they paid before the due date. I also told them if they paid before the due date I would not go after the other outstanding account. They paid $26000 at the end of March and left the rest unanswered.

Even without interest charge the 2 outstanding accounts will still come to around $70000 after what they already paid. That's why I was wondering if another letter of demand of the new amount was required.

If this step is not required I am happy to skip it. Thank you again Rod.

 

[Rod]

If this step is not required I am happy to skip it.

Not required. You made an offer to settle and by not responding by the requested time they effectively rejected your offer. Means you can go to court for the full amount plus damages plus interest.