A South Australian finds herself in “financial trouble” after a company owes her $10,000, leaving her unable to pay her rent and bills.
Welcome to Sisters In Law, news.com.au’s weekly column that solves all your legal problems. This week, our house attorneys and real-life sisters Alison and Jillian Barrett of Maurice Blackburn advise a freelancer about an unpaid bill that is causing financial trouble.
I’ve been working as a freelancer for the same company since January and really enjoy the work. The problem is they take a long time to pay – they owe me over $10,000 and I’m tired of chasing them.
I really need the money, because I am now behind on my rent and bills and have had to take out a loan.
My bills say I have to pay within 14 days, but every time I ask where my money is I’m told “it’s coming” and that “bills are on it”. What can I do?
I want to continue working for this company, but their slowness in paying is causing me stress and anxiety, as well as financial problems. † Flora, SA
This would understandably be quite upsetting and frustrating for you, Flora, if you did the work they asked for, but weren’t paid.
If you do want to continue working with the company, you may want to consider requesting money upfront or partial payment before the work is done.
In the meantime, there are some further steps you can take to chase the money you owe, but you should be aware that there is no quick fix.
First, you must send a reminder or a final cancellation form to the company, stating the amount you owe and asking for it to be paid back within a specified time frame, otherwise legal action will be taken.
You can access a model P1 Final Notice form on this Court SA webpage.
Always keep a copy of all letters and documents you send.
The company has 21 days to respond to you. They are allowed:
1. Pay the money in full
2. Negotiate with you to enter into a payment plan
3. Ignore you
If the company enters into a payment arrangement, ensure that this agreement is in writing and signed by both of you. Keep a record of every payment made and provide a receipt. Wire transfers or a bank check are often a safer option than cash in an envelope.
If the company refuses to pay but is otherwise in talks with you, you can proceed to a pre-action meeting if you both agree.
This meeting is usually referred to as a mediation and both parties agree to meet with an independent third party to attempt to resolve the dispute. The Court’s Mediation Unit can help you with this.
Mediation can be beneficial if:
1. It is less formal than legal proceedings
2. Parties have more control over the process and result
3. Free mediation services are available, while filing a claim in court will incur costs
4. It is usually faster and more confidential
If the company ignores you or refuses to attend mediation, you can file a formal claim with the Magistrates Court (in the Civil (Minor Claims) Division) as the amount involved is between $6,001 and $40,000.
When you file the claim with the court, you have to pay a fee of approximately $150 and then give this claim to the company. Try to give it to them in person. You must prepare an affidavit stating that you have given the claim to them (“served”).
The company must then prepare, file in court and provide you with a copy of their defense. If the company does not do this within a certain period of time, you can ask the judge to rule in your favor without a hearing.
If the company is preparing their defense, you must be present in court and present your case.
You must prove that the company hired you to provide the services you completed and that your bills remain unpaid despite your chasing payment.
Usually a lawyer cannot represent a party at the court hearing.
If you nevertheless want a lawyer to act for you, the company must agree to this or you can ask the judge if you think you will be disadvantaged without a lawyer.
After the hearing, the Magistrate will make a decision that is binding on the parties. The party that wins can usually ask the magistrate to make the losing party pay the court costs.
There are strict time limits, so you should seek legal advice on your specific situation.
This legal information is of a general nature and should not be construed as specific legal advice or relied upon. Individuals who need specific legal advice should consult a lawyer.
If you have a legal question that Alison and Jillian would like to answer, please email email@example.com
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