Glossary
Administrative Appeals Tribunal (AAT) — a tribunal that conducts independent, merits review of administrative decisions made by the Australian government.
Adjournment — postponement or suspension of a court hearing until a later date.
Affidavit — a witness statement, for use as evidence in court proceedings, which is prepared on a court form (UCPR Form 40). The person preparing the statement (deponent) must swear or affirm the truth of the affidavit before a justice of the peace or a solicitor.
Alternative dispute resolution (ADR) — refers to the wide range of processes for resolving disputes outside the court system. Most types of ADR use a neutral third person to help parties agree. Common types of ADR include mediation, conciliation and arbitration.
Appeal — to take a case to a higher court (or other relevant decision-making body) to challenge a decision. The person or organisation who appeals is the appellant.
Appeal on merits — a review of the substance of a decision, which essentially considers whether the decision was a ‘good’ decision. The reviewer can ‘re-make’ the decision if they believe another decision is warranted on the available evidence. This can be distinguished from an appeal based on an ‘error of law’, where the appellant must show that the original decision-maker got the law wrong.
Arbitration — a form of alternative dispute resolution where the parties to a dispute present their cases to an arbitrator. The arbitrator determines the outcome of the dispute, and the parties agree to comply with the arbitrator’s decision.
Arbitrator — an unbiased third party who presides over an arbitration.
Assessor — a judicial officer, appointed to decide small claims in the NSW Local Court.
Assignee — a person or entity to whom a right or liability is legally transferred. Debt assignment is a transfer of debt, and all the associated rights and obligations, from a creditor to a third party (often a debt collector).
Australian Consumer Law (ACL) — National consumer laws, offering a range of legal protections and guarantees for Australian consumers.
Australian Financial Complaints Authority (AFCA) — an independent, external dispute resolution scheme that deals with complaints about financial services and products.
Australian Financial Security Authority (AFSA) — a government agency that regulates bankruptcy and related matters.
Australian Securities and Investments Commission (ASIC) — national financial advice and financial products regulator.
Balance of probabilities — the standard of proof for civil cases. When determining the facts of a case, or which version of events to accept, the court makes findings based on whether the argued facts are more likely than not to be true. In criminal cases, facts must be proved ‘beyond reasonable doubt’, which is a much higher threshold of proof.
Bankruptcy — a legal process by which the assets and income of a person who cannot pay their debts are removed from their control, placed in the hands of a trustee and distributed to creditors in a way that will best satisfy the competing interests involved. After a standard period of bankruptcy, usually three years, a debtor is released from most of their remaining debts.
Bankruptcy notice — formal demand for payment, based on judgment debt. Failure to pay, or respond, within the required time frame constitutes an ‘act of bankruptcy’. After this, the creditor can file a ‘creditor’s petition’, in the federal courts, to have you declared bankrupt.
Beyond reasonable doubt — the standard of proof required in criminal cases. For a person to be found guilty of a criminal charge, the prosecution must have enough evidence to show that the accused committed the crime and that there is no other reasonable explanation.
Bill of sale — a formal document detailing in writing a sale of goods or transfer of property from one party to another.
Borrower — a person or organisation that borrows money from a bank or other lender with an agreement to pay it back at a later date — usually with interest or other charges.
Budget — an estimate of income and expenses for a set period.
Case law — judge-made law contained in written legal cases, which has been developed and refined through legal judgments over hundreds of years. It is often referred to as ‘common law’. This can be contrasted to laws made by parliament, which are called Acts or statutes.
Case management orders — procedural orders made by a court or tribunal to prepare a case for final hearing.
Cause of action — set of facts, or situation, that gives rise to an arguable legal case against the other party. For example, if a supplier sells you faulty goods, you may have a cause of action against the supplier (for repair, replacement or refund), under the Australian Consumer Law (ACL).
Chamber service — a service provided by the Local Court of NSW, where a registrar or deputy registrar provides information and assistance regarding court applications and procedures.
Civil law — the law that relates to disputes between individuals, companies, associations or government agencies, including, for example, disputes about consumer debts and contracts.
Community Justice Centres (CJC) — a government-funded organisation that provides free mediation services to community members with everyday disputes.
Community Legal Centres (CLC) — not-for-profit organisations funded to provide free legal information, referrals, advice and assistance to community members. Services are generally targeted at disadvantaged client groups.
Conciliation — a form of alternative dispute resolution where an impartial third party (a conciliator) helps parties to identify issues in dispute, generate options and reach mutually agreeable outcomes. Conciliators may act in an advisory manner, control the process and strongly encourage settlement, but their role is not determinative.
Consumer — a person who buys goods or services.
Consumer credit — credit/loans advanced to consumers by financial institutions, for the purchase of goods and services (e.g. mortgages, car loans etc.). Generally, the loans require repayment of principal, interest, fees and charges, over time.
Contract — a written or oral agreement, or exchange of promises, intended to be legally enforceable. Binding contracts must satisfy specific criteria (see page 76–81).
Cooling-off period — time frame during which a party to a contract can change their mind about the contract, without penalty. There are only limited situations where cooling-off periods apply. If you’re unsure about entering a contract, it’s essential to get advice BEFORE you sign anything (even if you think there is a cooling-off period).
Court registry — court service which accepts the filing of applications, and other court documents, and deals with day-to-day enquiries about court processes and procedures.
Credit guide — essential information about a credit provider and lending arrangements that must be provided to borrowers under credit law. Failure to provide this information when entering a loan agreement may entitle a borrower to compensation.
Credit law — laws which regulate the credit industry, encourage responsible lending and allow for flexibility when borrowers experience financial hardship.
Credit report — detailed report of your credit history, which may include information about payment defaults, judgment debts, bankruptcy, formal debt arrangements etc. It may be accessed and used by future potential lenders to determine your suitability for credit products.
Credit reporting body (CRB) — an organisation that collects and stores credit-related information about individuals, which is used to generate credit reports.
Creditor — a person or entity to whom a debt is owed.
Cross-claim — a counterclaim made by a respondent/ defendant in proceedings against the applicant (or a third-party) to offset the claim made by the initial applicant. For example, Jane may file a claim against John for damages related to a car accident, but John may then file a ‘cross-claim’ against Jane claiming she was at fault and owes him damages.
Debt agreement (Part IX agreement) — one of the formal debt management options available to debtors under the Bankruptcy Act 1966 (Cth). A Part IX agreement is a binding agreement between a debtor and their creditors, which sets out a proposal for repayment of debts. These agreements are intended for people who can make reasonable repayments and want to avoid bankruptcy.
Debt agreement (Part X agreement) — one of the formal debt management options available to debtors under the Bankruptcy Act 1966 (Cth) and also known as a personal insolvency agreement (PIA). A PIA is a legally binding agreement between a debtor and their creditors and involves the appointment of a controlling trustee who deals with creditors on the debtors’ behalf.
Debt collection agency — organisations that ‘chase’ payment of debts for creditors. They may work on a commission or assignment basis.
Debt consolidation — bringing all your existing debts together into one new debt, which can help you better manage your repayments.
Debtor — person or entity who owes money to a creditor.
Debtor’s petition — application lodged by a debtor who seeks to be made bankrupt. Once the Official Receiver (Australian Financial Security Authority) accepts the petition and allocates a bankruptcy number, the debtor becomes bankrupt.
Declaration of intention to present a debtor’s petition (DOI) — notice by a debtor, to AFSA, that they intend to lodge a debtor’s petition to be made bankrupt. Creditors are notified and must stop all enforcement action for 21 days, while the debtor considers their debt management options.
Deed of agreement — an agreement between parties that, unlike a contract, is not based on the passing of consideration between parties.
Default — failure to meet commitment(s) under an agreement; for example, a debt-related default is the failure to pay a debt as it falls due.
Default judgment — judgment entered against the defendant, without a hearing, on the basis that the defendant did not file a defence to the plaintiff’s claim.
Defence — in the Local Court, a ‘defence’ is a form (UCPR Form 7A or 7B) lodged by the defendant, in response to a ‘statement of claim’, to notify the court and the plaintiff that they dispute the claim. It outlines the part(s) of the claim they dispute and the reasons why.
Defendant — the person or entity against whom a civil claim is made. After a creditor files a statement of claim in the Local Court, they become the ‘plaintiff’ and the debtor, against whom the claim is made, becomes the ‘defendant’.
District Court of NSW — intermediate court in NSW state court hierarchy. It deals with more serious criminal matters, civil matters between $100,000 and $750,000 and appeals.
Enforcement — formal measures to enforce payment of a debt, after judgment has been entered against a debtor. Enforcement may include, an examination of financial affairs, garnishee orders, writ for the levy of property, or bankruptcy action.
Error of fact — when a decision-maker makes a mistake about material facts in a case.
Error of law — when a decision-maker misinterprets or misapplies a legal principle, or applies the wrong legal principle, to an issue of fact. A material error of law can be reviewed/appealed by a court.
Examination notice (UCPR Form 51) — form served on a judgment debtor, which is a formal request to answer questions about their financial situation. If the judgment debtor does not respond satisfactorily, the judgment creditor can request that the court make an ‘examination order’.
Examination order — order of the court, made after failure to comply with an examination notice, which requires the judgment debtor to attend court to answer questions and produce documents about their financial situation. Failure to attend an examination hearing could result in a warrant being issued for your arrest.
Exhibit — a document or item produced in court to become part of the evidence in the proceedings.
Expert witness — a witness who is qualified to give expert evidence in a particular field. For example, a forensic accountant could be called as an expert witness regarding financial account matters. There are special requirements, which must be satisfied, for a witness to be classed as an expert witness.
External dispute resolution (EDR) — service provided by an independent third party, who hears and attempts to settle disputes.
External dispute resolution body (EDRB) — an independent body that administers a dispute resolution scheme. For example, the Australian Financial Complaints Authority (AFCA), provides free, independent dispute resolution for consumer complaints about financial products and services.
Filing — the process of lodging court applications and related documents with a court or tribunal registry. Filing can generally be done in person (at a registry office), by mail or electronically (depending on the forum and matter type).
Financial counsellor — a person who provides information, support and advocacy to assist people experiencing financial difficulty. Most financial counselling services are government-funded and free of charge.
Financial hardship — a term used to describe a situation where a person has difficulty meeting their financial commitments, including the costs of living. This may be due to loss of income, unmanageable debts, illness, unexpected change in circumstances, etc.
Financial service provider (FSP) — entities which provide financial services to consumers, including lending, financial advice, brokerage etc. This can include banks, credit unions, financial planners, accountants, non-bank lenders and so on. In Australia, the financial services industry is highly regulated to offer some degree of protection for consumers.
Garnishee order — a court order which tells a third party (such as an employer, or bank) that they must pay money belonging to a judgment debtor to a judgment creditor, to pay a judgment debt.
Guarantee agreement — the agreement of a third party, called a guarantor, to assure payment in the event the party involved in the transaction fails to live up to their end of the bargain.
Guarantor — person or entity who legally guarantees repayment of a loan (plus interest, fees and charges), if the principal borrower fails to make repayments. Guarantors essentially put their assets on the line and do not otherwise benefit from the arrangement. You should think very carefully before agreeing to be a guarantor for a loan.
Hearing — the part of a court matter when the parties present their evidence and make submissions on the law that applies to the case.
Hearsay evidence — something that was not personally seen or heard by the person giving evidence but told to them by another person. For example, ‘Sam told me that James had said, “I did it”’.
In chambers — where a judicial officer makes an order or decision in their office, without a hearing (that is, in the absence of the parties and outside a courtroom setting).
Indemnify — to compensate, or promise to compensate, for loss suffered or damage incurred.
Insolvent — the inability to pay debts as and when they fall due.
Instalment — regular payments made by a debtor to a creditor, instead of paying a debt as a lump sum.
Internal dispute resolution (IDR) — complaint handling mechanisms, within an organisation, which deal with consumer complaints at first instance. As a rule, you must try IDR options before you can make a complaint to an external dispute resolution body (EDRB). In many industries, IDR schemes are mandatory (for example, in the area of financial services).
Judge — an independent judicial officer with authority to make binding determinations in legal matters heard in court.
Judgment — a court’s order or finding in the determination of a legal proceeding.
Judgment creditor — a creditor who has obtained court orders confirming a debt owed by a debtor.
Judgment debt — a legally binding court order for payment of an amount of money, by a judgment debtor to a judgment creditor.
Judgment debtor — a debtor who has a judgment debt entered against them.
Lack of jurisdiction — when a court does not have the power or authority to hear or determine a matter. Courts have jurisdiction or lack jurisdiction.
Leave of the court — permission to take a specific step in proceedings, which would typically not be allowed without permission (‘leave of the court’). For example, a party may need to seek leave to file evidence late and would need to supply the court with arguments in support of their application for leave.
Legal capacity — in terms of a natural person, legal capacity is the ability of a person to understand the nature of and make reasonable decisions about legal situations. Usually, you must be over 18 to enter a contract and have the mental capacity to understand the nature of the agreement. Contracts may be set aside if a party did not have the capacity to enter the particular contract due to cognitive impairment, severe mental illness, intoxication etc.
Legislation — laws made by Parliament (state and federal in Australia), which are referred to as Acts or statutes. Legislation can be distinguished from case law, which is developed by judges in the determination of court cases.
Lender — entity which lends money to another person or entity on agreement that the principal, along with loan interest and charges, will be paid back at a later date.
Letter of demand — a formal letter requesting payment of a debt, often sent as a final reminder before court action is commenced to recover the debt.
Limitation period — the time frame available for starting legal action. For example, the limitation period for ordinary debts in NSW is six years from the date debt was incurred or acknowledged. After this period has expired, a creditor has no legal right to pursue the debt via court action.
Liquidated debt — where a fixed dollar amount can define a debt. This can be contrasted to an ‘unliquidated’ debt, where the amount owed is still undefined.
Local Court of NSW — the lowest court in the NSW court hierarchy, which has jurisdiction to hear criminal and civil matters. Civil matters are listed in two divisions — the Small Claims Division, which deals with claims under $20,000 and the General Division, which deals with claims between $20,000 and $100,000.
Magistrate — a judicial officer appointed to hear and determine civil and criminal matters in the NSW Local Court.
Mediation — a form of alternative dispute resolution where a neutral third party (mediator) helps disputing parties to narrow the issues in dispute, explore underlying concerns, generate options and reach mutually agreeable outcomes. A mediator manages the dispute resolution process but does not have a determinative role.
Mortgage — A transfer of real property (land) or personal property (goods) as security for the repayment of money borrowed. The creditor to whom the mortgage is made is the mortgagee, the debtor who makes it is the mortgagor.
National Personal Insolvency Index (NPII) — a public record of personal insolvency proceedings and administrations in Australia (including a record of bankruptcies, accepted debt agreements, and Part X agreements) maintained by the Official Receiver under the Bankruptcy Act.
National Relay Service — a government organisation that assists people who are deaf, or have a hearing or speech impairment, make and receive telephone calls. There are several relay call options (connections) that can be accessed by phone, web or teletypewriter (TTY).
NSW Civil and Administrative Tribunal (NCAT) — a government body which can hear and determine a range of common disputes, including consumer and commercial disputes. Tribunal processes and procedures are usually more user-friendly than alternative court options, and it can be easier to self-represent.
Non-provable debt — debts that are not discharged in bankruptcy — examples are court imposed penalties and fines, accumulated HECS-HELP debts, and some unliquidated debts. These can be contrasted to ‘provable’ debts, which are discharged after bankruptcy, such as ordinary credit card debts, personal loans etc. (see page 203 & 270 for further information).
Notice of motion — A notice of motion is a written application to the court, after a case has started, asking the court to make an order about something. A notice of motion can be used for several reasons, including seeking directions or clarification on matters in dispute or asking for the adjournment of a hearing.
Ombudsman — an official government-appointed body which provides independent complaint and dispute resolution services. These services can be industry-specific (for example, the Telecommunication Industry Ombudsman (TIO)), or generalist (for example, the NSW Ombudsman deals with complaints about NSW government agencies).
Opinion evidence — evidence about what a witness thinks, believes or infers from events, as distinct from their knowledge of particular facts. Generally, opinion evidence is inadmissible in legal proceedings unless an exception applies (for example, if the opinion was derived from events witnessed and is necessary to obtain an adequate account of what was witnessed).
Personal insolvency agreement (PIA) — see debt agreement (Part X agreement).
Plaintiff — person who initiates legal proceedings against another in a civil dispute.
Pre-trial review — initial informal court hearing, held by a registrar, magistrate or assessor, which aims to identify the issues in dispute, attempt settlement discussions or prepare the matter for a final hearing (if no agreement can be reached).
Procedural fairness — acting fairly in administrative decision making. Denial of procedural fairness may lead to appeal rights and re-consideration of the original decision.
Provable debt — a debt that entitles a creditor to claim from the bankrupt estate, but is generally extinguished when bankruptcy ends (examples include credit cards, personal loans, utility bills, medical fees etc.)
Registrar — a senior court officer who has the power to make some judicial decisions.
Repudiation — to repudiate a contract means to express an unwillingness or inability to continue with the contract. If accepted by the innocent party, the contract may be terminated. If not accepted, the repudiation may result in a breach of the contract, for which the innocent party could seek damages.
Secured debt — debt for which the borrower puts up an asset as surety or collateral for the loan. The creditor has a right to retrieve the secured property to repay the loan, if the debtor defaults on loan repayment. Common examples include car loans, where the car is secured property, or a mortgage, where your home is the secured property.
Settle — to resolve a dispute on terms that are mutually agreed by all parties to the dispute.
Sheriff — an officer who serves court documents and enforces writs, warrants or other court orders. Sheriffs are also responsible for court security.
Standard of proof — the required level to which something must be proved in court. In civil matters, the standard is ‘on the balance of probabilities’ and in criminal matters the standard is ‘beyond reasonable doubt’.
Statement of affairs — one of the prescribed forms that must be lodged by a debtor who becomes bankrupt or proposes to enter a debt agreement (Part IX agreement) or a personal insolvency agreement (Part X agreement). The statement of affairs must include information about the debtor’s financial affairs, including debts, creditors, income and assets.
Statement of claim — a UCPR form which is used to commence court proceedings. It includes details of the parties, what is being claimed and the basis for the claim.
Stay of proceedings — indefinite ‘hold’ on proceedings, pending the outcome of some other related matter.
Submissions — arguments made to a court (or decision-making body) to support propositions of fact or law, in support of a party’s case. These can be made in written or oral form.
Subpoena — a court order which directs a person or entity to either appear in court to give evidence or produce documents to the court. A party to legal proceedings may need to ‘subpoena’ documents or witnesses when they cannot obtain the required evidence by voluntary means. Failure to comply with a subpoena can result in severe penalties being imposed by the court.
Subrogation — the assumption by a third party of another party’s legal right to collect a debt or damages. Often used by insurers, who pursue the ‘at fault’ party for damages they caused to an insured party (to partially or fully recover the funds they had to pay out to the insured).
Supreme Court of NSW — the highest court in the NSW court hierarchy. It has unlimited jurisdiction for civil matters over $750,000, and also deals with appeals, the most serious criminal matters and equity-related matters (such as probate and estate administration).
Terms of settlement — the specific details of a settlement agreement.
Tribunal — a formal government body established to settle defined types of disputes. They often have similar procedures to courts, but with less formality so ordinary people can self-represent. The central tribunal in NSW is the NSW Civil and Administrative Tribunal, which deals with a wide range of everyday disputes.
Unconscionable conduct — conduct that takes unfair advantage of a vulnerable person in a contract or other transaction, due to factors such as poor education, cognitive impairment or language difficulties.
Unsecured debt — debt not secured by property which could be used as collateral in the event of default.
Uniform Civil Procedure Rules (UCPR) — set of standardised rules, procedures and forms which apply to NSW courts
Unliquidated debt — a debt which is yet to be fully quantified or defined. For example, a claim for medical expenses, when the treatment regime is not yet finalised and the full extent of medical expenses are not yet known.
Waiver — debt waiver is where a creditor decides to permanently give up their right to recover a debt from a debtor. The debt essentially ‘disappears’.
Warranty — a written guarantee, issued by a supplier to a consumer, promising repair, replacement or refund, in the event of fault or failure within a defined period. There are additional Australian Consumer Law (ACL) guarantees that apply to consumer goods and services, regardless of whether a specific warranty applies.
Without prejudice — to make an offer to settle, on the basis that the content of the offer will not be disclosed in any later proceedings that result from the issues in dispute. The idea being that parties should be free to make commercial offers to settle, without necessarily making admissions as to liability, which could be used against them in later proceedings.
Witness statement — formal statement prepared by a witness, recounting events that they directly witnessed, for use in court proceedings.
Work development orders — an arrangement made by Revenue NSW to allow eligible clients to reduce unpaid fines through unpaid work or specific courses or treatment.
Writ for levy of property — debt enforcement option available via the Local Court, which allows a creditor to recover and sell the property of the debtor to pay unpaid judgment debts.
Write off — where a creditor chooses not to pursue a debt, either temporarily or indefinitely. The debt does not disappear.