On 24 March 2020 Prime Minister Scott Morrison announced new nationwide restrictions which included a ban on auction houses and open house inspections in an effort to flatten the coronavirus curve. Whilst the impact of this restriction on the real estate industry is obvious, given that a lot of real estate sales involve auctions and open house inspections, the impact of this restriction on the justice system may not come to mind immediately.
The enforcement of a Property (Seizure and Sale) Order (PSSO) in Western Australia (and its interstate equivalents) is one aspect of the justice system that will need to adapt to and work around the restriction.
What is a Property (Seizure and Sale) Order?
In Western Australia, a party with a judgment in their favour can make an application to the Court for a PSSO. A PSSO can be registered on the judgment debtor’s property and allows the judgment creditor to sell the property to wholly or partially satisfy the judgment debt.
Impact on the enforcement process
Due to the nature of the order and the fact that property is being sold against the judgment debtor’s will, sales of property under PSSOs must occur by public auction arranged by the Sheriff unless otherwise ordered by the Court. Physical auctions would traditionally be held but given the ban on auction houses, this will have to change.
Nonetheless, it is highly unlikely to halt the enforcement of PSSOs altogether. The real estate industry appears to cope with the restriction well by being innovative and having auctions online and over the phone. It is likely the Sheriff’s office will be doing the same.
Another aspect of enforcing PSSOs that may see a change as a consequence of Covid-19 restrictions more generally is applications for orders suspending the enforcement of PSSOs.
Judgment debtors can apply for a suspension order to suspend the enforcement of Court orders such as a PSSO. Under normal circumstances, judgment debtors will have to show special circumstances to support a stay in enforcing a PSSO. Special circumstances include financial circumstances or the judgment is being appealed.
Given the sweeping nationwide restrictions imposed, many businesses have been ordered to close or limit trading, resulting in employees being laid off. Whilst the government has introduced economic stimulus packages to assist with the individuals and businesses, they may not be enough to pay off debts. This will be a relevant consideration for the Courts in determining whether there are special circumstances warranting the grant of a suspension order.
It will be interesting to see whether applications for suspension orders would increase as a result of the economic consequences of Covid-19 restrictions.
HHG Legal Group can assist
For over 100 years HHG Legal Group has been proudly serving Western Australian families, business and individuals. Never before has the State seen such a crippling time for many small businesses and individuals and we are committed to supporting the communities in which we operate.
If you require legal advice or representation in recovering or disputing a debt we are offering unprecedented fees for initial consultations (video, phone or safely-spaced, face-to-face). If you require some assistance please call us on 1800 609 945 or fill in an online form and we’ll call you back.