Garnishee Orders in New South Wales

The battle over illegally issued penalty notices for alleged failures to comply with COVID-19 public health orders continues, with Revenue NSW now issuing “garnishee orders” on people’s bank accounts in order to extract funds.

Unsurprisingly, the public backlash regarding the move has been severe, with many pointing out that the Supreme Court of New South Wales has time and again ruled that the fines are invalid, leading to more than 33,000 being revoked, but the government stubbornly refusing to cancel the remaining 29,000.

It’s not our fault

Bureaucrats from the higher echelons of the Minns Labor Government have been quick to point out that the scheme was handled by the Berejiklian led Coalition, but how this is forcing the current administration to continue on insisting on enforcement is a question that remains unanswered.

Indeed, a directive from the high-ups to cancel the outstanding fines could see the matter resolved, but it seems that each successive state government is so dependent on extorting members of the public through the issuance of penalty notices that they cannot bring themselves to release their grip, regardless of whether the fines were fairly or even lawfully issued.

The public has paid enough

In addition to these fines, governments have imposed additional costs on already-struggling members of the Australian public.

Most of us will recall that in the days of lock downs and other strict social controls, quarantine requirements were implemented for returning Australians as well as incoming visa holders and travellers.

Of course, in Australia, with state borders also closed, people from other jurisdictions, such as Queensland or Victoria were also sent into quarantine upon arrival in New South Wales.

‘Quarantine consisted of a two weeks stay in a designated hotel, and the requirement to take tests for COVIDprior to being allowed to leave. If a person tested positive for COVID-19 while in quarantine, they could not leave until they were cleared to do so.

At the time, the NSW Government footed the bill, but it is now seeking to recover costs from people who used the service. It says the fact that costs would be passed on was clearly communicated to travellers sent into quarantine.

At the time, single travellers were charged $1,500 per week, with each additional adult costing another $500 and children over three years $250 per week.

Affected travellers are now complaining about the “exorbitant cost” – for what one person has described as ‘mistreatment’ because the food was of poor standard – but many more are saying they have not had prior communication from Revenue NSW and believe it’s unfair for the money to be simply taken from their accounts without warning.

Extracting money from accounts of struggling Australians

And this is where the crux of the issue lies, because taking money from people’s accounts without warning could leave them without funds for other purposes, which presents a significant problem.

Garnishing funds could also potentially suggest that people are not being given the opportunity to dispute the bills they’re being asked to pay.

Revenue NSW allows for all other fines to be challenged if a person thinks a fine was issued in error or unfairly.

It also has a process for allowing people to pay off fines / debts in instalments if they’re not able to pay a large sum upfront.

Enforcement options available to Revenue NSW

Under the Fines Act 1996 (NSW), Revenue NSW has a number of options in the pursuit of an unpaid fine, or in this case, an outstanding penalty notice or quarantine bill.

The department must initially issue a notice and allow a period of 28 days before commencing enforcement action.

If the money remains unpaid after this period, Revenue NSW can:

Issue a notice that enforcement action will be taken,
Suspend a driver licence and cancel a vehicle’s registration, and
Commence civil enforcement, which can include:

Making a property seizure order,
Making a garnishee order,
Summons a person to court, and/or
Make a charge on land, that is a document that provides “security” over the land asset until the fine / amount is paid.

What is a Garnishee Order in New South Wales?

A garnishee order is a civil law court order that allows one party (usually called the judgment creditor) to recover a debt from another party’s bank account (usually called the judgment debtor) or from another person who owes money to the judgment debtor, usually by instalments over a period of time.

These orders are typically sought after the debtor has failed to settle a court judgment made against them; in other words, neglected to pay money that is owed to the creditor for a period of time after the court has decided the case.

What are the steps to obtaining a Garnishee Order in New South Wales?

There are three main steps that an individual, business or other organisation is required to take in order to have a garnishee order made against another person, business or organisation.

1. Obtain and complete the forms

The first step in garnishing a debt that is owed is to obtain and complete the correct forms, which are:

A Notice of Motion – Garnishee Order form (Form 69), and
A Garnishee Order for Debts (Form 70) (note that this form is not required if the application is being filed on the Online Court Registry.

There are also separate forms for Garnishee Orders for Wages or Salary (Form 71) and Garnishee Orders for Rent (Form 71B).

All of these forms can be accessed here.

The Notice of Motion contains an Affidavit in support.

The forms will then need to be completed which can be done on a computer or by printing and filling them in with either a blue or black pen.

The following details will need to be entered into the forms:

The case number, which is on court documents including the Statement of Claim and Defence,
The date of the judgment,
The name of the judgment debtor (ie the opposing party),
The details of the garnishee, which is the source from whom the funds are to come from such as a bank or other person,
The way in which you are aware the garnishee has money to provide,
The amount of the judgment in your favour,
The enforcement costs you have incurred since the date of the judgment in your favour,
The amount of interest you are claiming since the date of the judgment,
The fee that will be incurred for serving the order if a process server is to be used,
The details of the judgment debtor’s bank account, if this is known and/or relevant, and
Details of any earlier order regarding payment, such as an instalment order.

The Affidavit will need to be sworn or affirmed by a person who is authorised to do so, such as an Australian lawyer or Justice of the Peace.

2. File the forms

The forms can then be filed on the NSW Online Registry or in a Local Court Registry.

If you are filing the forms in person, you should take along the original as well as two copies and – where possible – attend the same courthouse where the case took place.

3. Serve the order

A copy of the forms that is sealed (stamped by the court) must then be sent to the garnishee; for example, the bank in which the funds are to come from.

Each bank will have specific contact details for the service of legal documents, so in order to speed up the process it is a good idea to get those details before the form is sent.

Always send the forms by registered post.

You do not have to serve a copy on the judgment debtor.

It is important to bear in mind that the amount garnished cannot leave the judgment debtor with less than a minimum amount to live on each week.

At the time of writing, that minimum weekly amount is $570, but this is subject to change and the details are regularly updated here.

Garnishee Orders resulting from debts to Revenue NSW

The situation when it comes to Revenue NSW is a little different.

In that regard, section 73 of the Fines Act 1996 (NSW) empowers the organisation’s Commissioner to make a garnishee order “if satisfied that enforcement action is authorised against the fine defaulter”.

The section further provides that such an order can be made in the absence of, and without notifying, the fine defaulter.

This is the mechanism being used by Revenue NSW to issue garnishee orders for non-payment of COVID-19 penalty notices.

Thousands of bank accounts garnished

It has been reported that Revenue NSW has caused the issuance of garnishee orders on around 5,000 bank accounts, adding up to almost $40 million.

In response to allegations it has communicated poorly or ‘not at all’ with some of those whose bank accounts have been garnished, the organisation has issued the following statement:

“Revenue NSW only issues garnishee orders where a person has received several notifications to pay a fine or outstanding fee and has not paid or contacted Revenue NSW to discuss payment options. It also noted that “A customer’s bank is responsible for withdrawing the funds and ensuring the minimum amount ($570) is left in the account.”

The New South Wales Government is still squabbling with Queensland over unpaid quarantine bills clocked up during COVID.

The states entered an agreement in April 2020, when NSW was taking in about 40% of all international travellers, and was responsible for quarantining them locally prior to letting them move onto their final destination.

Other states have paid their share of the bill, but apparently New South Wales and Queensland are still ‘in discussion’ over a bill that’s estimated to be more than $100m.

During the pandemic, there were many issues with hotel quarantine – the worst in Victoria. The Government was eventually charged by Victoria’s workplace safety watchdog with 58 breaches and the Department of Health faced fines totalling more than $1.5 million to $1.64 million dollars.

It’s not clear whether quarantine will be part of the Federal Government’s COVID Inquiry, which has been heavily criticised for not being far-reaching enough, particularly when it comes to unilateral decisions made by state governments and the lack of cooperation amongst them during the pandemic.

Although in recent days a member of the panel appointed to investigate Deakin University’s epidemiology chair, Prof Catherine Bennett, has insisted that all facets of the pandemic will be included, and the panel will also examine other previous inquiries into issues of concern relating to the pandemic.