Warrants of Seizure and Sale
Judgment Debt Recovery Article # 2
This is the second article in an article series containing detailed information about various avenues that are available to recover judgment debts. The article below focuses on the warrant of seizure and sale. This series will also include articles focusing on the warrant to seize property, attachment of debts, attachment of earnings and garnishee orders, winding up proceedings and bankruptcy proceedings.
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The CBL business debt recovery article series contained information of a general nature about the debt recovery process up to the point of a creditor entering an order in default of defence. The articles in that series focused on the letter of demand, commencing legal proceedings and entering default judgments. There was also general information about modes of recovery included within our recovering judgment debts and enforcing monetary court orders article within that series..
The judgment debt recovery article series provides more detailed information about each of the modes of recovery referred to in our final business debt recovery article.
Warrant of Seizure and Sale
A standard warrant to seize property cannot be used to attempt to seize or to recover money from the sale 'real property' or land. However, it is often the case that the best prospects of recovery will arise from causing the seizure and sale of land owned by a debtor. This is where the Warrant of Seizure and Sale is an important tool in the debt recovery process.
It is a relatively straightforward task to ascertain whether or not a judgment debtor owns any real property. In Victoria (as in other Australian States and Territories) searches of the land registry can be conducted by 'proprietor name'. The results of the search will disclose any land within the relevant State or Territory of which the debtor is the registered proprietor.
There is however no public register that will show how much equity there is in a property that is located. A search of a Title to the property will show whether or not there is a mortgage over the property, but if there is a mortgage then the precise amount owed on the mortgage (if any) will not be shown in the search. Nonetheless, proceeding with a warrant of seizure and sale as a part of the business debt recovery is often worthwhile even if there is a mortgage. Even if there transpires to be minimal equity, the prospect of the sheriff selling a judgment debtor's home is often enough for the debtor to 'find' the money necessary to make payment of the Court order.
Once a decision is made to issue a warrant of seizure and sale the appropriate application to the County Court of Victoria or the Supreme Court of Victoria must be made. Magistrates Court of Victoria does not have the power to issue a warrant of seizure and sale. Accordingly, if the order for the judgment debt was made in the Magistrates Court then that order must be 'uplifted' to one of the superior Courts prior to application being made for the Court to issue the warrant of seizure and sale.
After the warrant of seizure and sale is issued the next step of the debt recovery process involves the Court directing the Sheriff's Office to seize the debtor's real estate. If the land is sold then any mortgagee would be paid in preference (along with other creditors who have mortgages or valid charges over the land). The balance that is available would then be used to satisfy the debt owed to the judgment creditor. If there is then any further proceeds available it would be paid to the registered proprietor, but after a part of the judgment creditors costs along with the costs of the Sheriff also being paid out of the proceeds.
There are of course additional matters to consider throughout the course of the sale of a property pursuant to a warrant of seizure and sale. For example, if a property is owned by more than one person (and if they are not both judgment debtors) then only the share of the judgment debtor is able to be sold. There are various other requirements with which the Sheriff must comply. In any case and whether or not a property is ultimately sold, a warrant of seizure and sale is a valuable tool for business debt recovery as it is often be the case that a judgment debtor promptly makes payment after the Sheriff serves them with the warrant.
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The other articles now published in this series include:
Please note that the facts and circumstances relevant to every client are different. The above article should not be relied upon as legal advice. Article by Nicholas Corr published on 18.9.13. To be notified of new articles: