Legislative Council Fifty-Fourth Parliament, Second Session (54-2) 54 2 Parliament of South Australia Legislative Council published Bills Statutes Amendment (Civil Enforcement) Bill Statutes Amendment (Civil Enforcement) Bill Statutes Amendment (Civil Enforcement) Bill Introduction and First Reading Introduction and First Reading The Hon. R.I. LUCAS Legislative Council The Hon. R.I. LUCAS (Treasurer) (15:35): Obtained leave and introduced a bill for an act to amend the Enforcement of Judgments Act 1991 and the Sherriff's Act 1978. Read a first time. Second Reading Second Reading The Hon. R.I. LUCAS Legislative Council The Hon. R.I. LUCAS (Treasurer) (15:36): I move: That this bill be now read a second time. I am pleased to introduce the Statutes Amendment (Civil Enforcement) Bill 2021. The bill amends the Enforcement of Judgments Act 1991 and the Sheriff's Act 1978 to implement a number of recommendations of a review undertaken by the Courts Administration Authority into civil enforcement processes in South Australia. The courts review was undertaken by a review panel, which included representatives of the judiciary and the Courts Administration Authority, representatives of the Sheriff's Office, the then President of the Law Society, representatives of the Attorney-General's Department and relevant solicitors with expertise in civil enforcement proceedings. A supplementary report was also prepared by the Sheriff's Office. The courts undertook the review with the intention of modernising and streamlining civil enforcement procedures in this state, in line with other Australian jurisdictions. Several recommendations entail legislative change. The bill inserts a new provision into the Enforcement of Judgments Actto enable a judgement creditor to serve a notice, to be termed an 'investigation notice', on a judgement debtor prior to an investigation summons. Where monetary judgement has been ordered by a court against a judgement debtor, section 4 of the Enforcement of Judgments Actallows for the court, upon application by a judgement creditor, to investigate the judgment debtor's means of satisfying the debt. The investigation hearing is usually the first stage of enforcement proceedings and requires the court to issue a summons for the debtor to appear before the court for examination and to produce any documents relevant to assessing the debtor's capacity to repay the judgement debt. Failure to appear for an investigation hearing may render the debtor liable for arrest. The courts review of civil enforcement procedures considered the use of investigation hearings to be unnecessarily adversarial and an inefficient use of the court's time and resources as the initial stage of the enforcement process. It was recommended that investigation hearings be replaced wherever possible with an informal process to allow creditors to attempt to directly obtain information about the financial circumstances of the debtor without the need for court attendance. The proposed investigation notice is modelled on part 38 of the Uniform Civil Procedure Rules of New South Wales. Unlike the NSW examination notice, the investigation notice will not be a compulsory first step before a court-summonsed investigation proceeding; rather, the incentive for debtors to comply with the informal notice will be reduced court costs, since the costs of formal court investigation proceedings are otherwise added to the amount of a judgement debt under section 3 of the Enforcement of Judgments Act. It is anticipated that introducing this investigation notice option will encourage a collaborative approach to resolving the judgement debt, reduce costs of parties and the use of court resources, as well as expedite the enforcement process. The bill will also amend the Enforcement of Judgments Act to expand the scope of garnishee orders as a means of enforcing judgement debts. Subsection 6(2) of the Enforcement of Judgments Act only permits garnishee orders to be made against a debtor's salary or wages with the debtor's consent. The courts review considered this requirement to be outdated and inconsistent with current civil enforcement procedure in other jurisdictions, noting that South Australia remains the only jurisdiction to still require a debtor's consent to a garnishee order attaching salary or wages. In relation to concerns about potential financial hardship being caused to low income earners and welfare recipients as a result of garnishee orders, section 6(4) of the Enforcement of Judgments Act requires the court, before making a garnishee order, to take into account evidence of the necessary living expenses of the debtor and any dependents, and of any other liabilities that may affect their means of satisfying the debt. It is appropriate that section 6(4) be retained to preserve the court's discretion to set an appropriate amount for a garnishee order, which has regard to the individual circumstances of the debtor. A further amendment is made, as recommended in the courts' review, to section 6 of the Enforcement of Judgments Act to allow for garnishee orders to be made against funds held in a term deposit, regardless of whether the term deposit has matured. While existing section 6(1) allows a garnishee order over moneys in a term deposit account, there is some doubt that it authorises immediate payment of those moneys where the term deposit is yet to mature. Section 6(5) of the Enforcement of Judgments Act allows the court to authorise the garnishee to retain an amount from the money subject to a garnishee order as compensation for the garnishee's expenses in complying with the order. This will ensure that in cases where a financial institution (the garnishee) incurs costs in terminating a term deposit early, the financial institution is able to recover the costs of complying with the order. The bill amends section 7 of the Enforcement of Judgments Act to empower the Sheriff, by written notice, to require a judgement debtor or third party to provide relevant information or documents disclosing the interests of third parties in real or personal property subject to a warrant for seizure or sale. Section 7 of the Enforcement of Judgments Act enables the court, on application by a judgement creditor, to issue a warrant of sale authorising seizure and sale of a judgement debtor's real or personal property (or both) to satisfy a judgement debt. However, before a warrant for sale can be executed, the Sheriff must establish the extent of the defendant's interest in the property and the proprietary interest of any other third parties, as well as their written agreement as to the proportions in which the net proceeds of the sale will be divided. Despite these requirements, the Sheriff has advised that financial institutions (for example, a bank which holds a mortgage over the property) are increasingly refusing to provide details of their proprietary interests due to breach of privacy concerns. This has made it extremely difficult for the Sheriff to establish the judgement debtor's interest in the property subject to the sale order. This amendment to section 7 should address this problem. The bill also amends section 7 of the Enforcement of Judgments Act to clarify and broaden the Sheriff's powers to eject persons from, and proactively direct persons not to enter, land where the Sheriff is exercising a warrant for the sale of the land to enforce a judgement. Presently, section 7(3a) authorises the Sheriff to eject a person not lawfully entitled to be on the land but does not authorise the Sheriff to issue a direction to prevent a person from entering the land that has been seized for sale. The Sheriff advises that this has led to situations whereby the Sheriff, having already ejected a person from the land at the time of the seizure, has been unable to lawfully direct a person to stay off the land or remove the person from the land until the person has re-entered the land, for example during an open inspection. These amendments will address this deficiency in the Sheriff's powers. This bill amends the Sheriff's Act 1978, as requested by the Chief Justice, to give the Sheriff an express power to request the Commissioner of Police to provide assistance with respect to any enforcement of judgement. The amendment, inserting a new section 9DA into the Sheriff's Act, will also provide for a police officer rendering such assistance to have all the powers of a sheriff under the Enforcement of Judgments Act. The amendments in this bill will impact positively on the community's level of confidence in the justice system and its ability to enforce civil court judgements. They will improve outcomes for judgement creditors in being able to recover amounts owed to them after successfully enforcing their rights in court. The amendments will also improve court efficiency in enforcing civil court judgements on behalf of judgement creditors. In this way, the bill will support a key priority of the government's justice agenda, that is, to ensure 'a courts system built to last'. I commend the bill to members, and I seek leave to have the explanation of clauses inserted in Hansard without my reading it. Leave granted. Explanation of Clauses Explanation of Clauses Part 1—Preliminary 1—Short title 2—Commencement 3—Amendment provisions These clauses are formal. Part 2—Amendment of Enforcement of Judgments Act 1991 4—Insertion of section 3A This clause inserts new section 3A into the principal Act. 3A—Investigation notices Proposed clause 3A makes provision for an investigation notice requiring a judgment debtor to answer material questions and provide for inspection by the judgment creditor of specified documents. 5—Amendment of section 6—Garnishee orders This clause amends section 6 to provide for the making of certain payments (including in the form of salary, wages or money held in a term deposit) to the judgment creditor. 6—Amendment of section 7—Seizure and sale of property This clause amends section 7 of the principal Act so that a warrant may include a requirement for the judgment debtor to provide the sheriff with information relating to the interests of third parties in property owned by the debtor as well as a requirement for any such third party to provide relevant information to the sheriff. The proposed amendments to section 7 also set out a series of powers (including powers of direction) that the sheriff may exercise in relation to a warrant. Part 3—Amendment of Sheriff's Act 1978 7—Insertion of section 9DA This clause inserts proposed section 9DA into the principal Act 9DA—Sheriff etc may be assisted by police officers Proposed section 9DA provides that the sheriff or deputy sheriff may be assisted by a police officer in the performance or exercise of their statutory functions. Proposed section 9DA makes specific provision for a police officer to be taken to have the powers of the sheriff under the Enforcement of Judgments Act 1991. Debate adjourned on motion of Hon. I.K. Hunter.