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Item 9.4 - Attachment 4 |
EUA Enforcement Procedure |
Environmental Upgrade Agreement (NSW)
Environmental
Upgrade Agreements
Enforcement
Procedure
Contents
1. Background
2. Scope
3. Purpose
4. Definition
5. Application
Direct
Debit Procedure
Collection
Roles
Step
1: EUC Billing Notice
Step
2: Reminder Notice 1
Step
3: Reminder Notice 2
Step
4: Demand Letter
Step
5A: Serving the Statement of Liquidated Claim
Step
5B: Issuing a Section 569 Notice
Step
6: Pre-Judgement Letter
Step
7: Judgement
Step
8: Post Judgement Letter
Step
9: Enforcement
Step
10: The Sale of Land
6. Process
Flow Diagram
1. Background
On 18 February 2011, the Local
Government Amendment (Environmental Upgrade Agreements) Act 2010 took effect
amending the Local Government Act 1993 so as to establish a legislative
framework that provided for and authorised Councils to enter into Environmental
Upgrade Agreements. (“EUA”). An EUA is a voluntary agreement between a Building
Owner, a Finance Provider and a Council where:
· A Building Owner agrees to carry out environmental upgrade works
to a building (works to improve the energy, water, or environmental efficiency
or sustainability of the building); and
· A Finance Provider agrees to advance funds to the Building Owner
to finance those environmental upgrade works; and
· The advance is repaid by means of a charge on the relevant land
that is levied by the Council. An EUA may be entered by a Building Owner, a
Finance Provider and a Council in relation to either:
a) a non-residential building; or
b) a strata building that is the subject of a
multi-residence scheme comprising more than 20 lots.
2. Scope
This document covers the Council’s
procedure concerning the waiver, deferral, recovery and enforcement of the
Environmental Upgrade Charge and any other charge made under Part 2A of Chapter
6 of the Local Government Act (by any means) as at the date of the
Environmental Upgrade Agreement, as set out in Annexure 6 of the agreement.
3. Purpose
The purpose of this
document is to provide a framework for Parramatta City Council (PCC) in
exercising its powers of enforcement in the event that a Building Owner fails
to pay any outstanding amount relative to the Environmental Upgrade Agreements.
4. Definitions
Building
Owner
means the person or persons so described in the Details section of the
Environment Upgrade Agreement.
Direct Debit
Dishonour Letter is a letter sent by the Council to the Building Owner every time a
direct debit payment has been reversed or dishonoured.
Direct Debit
Dishonour Fee means the processing fee charged to the Building Owner whenever a
direct debit payment has been reversed or dishonoured, the amount of which is
indicated in section 21 of the Council’s Schedule of Fee and Charges.
Environmental
Upgrade Charge (EUC) means the charge
payable by the Building Owner to the Council in relation to the Environmental
Upgrade Works under the Local Government Act and the Environmental Upgrade
Agreement.
EUA Billing
Notice is
a notice sent by the Council to the Building Owner to levy the EUC on the land
on which the Building is situated. This must be prepared not later than 28 days
prior to the date on which each relevant payment is required to be made in
accordance with the Agreed Repayment Arrangements.
Penalty Interest is taken to be a Council
rate of charge which is due and payable in accordance with section 566(4) of
the Local Government Act that will be recovered by the Council in accordance
with section 712 and division 5 of part 2 of the Local Government Act.
5. Application
Direct Debit
Procedure
The Council will only accept payment of EUCs by direct debit.
In entering an EUA, each Building Owner must provide sufficient
details to enable a direct debit to be set up by the Council to debit the
Building Owner’s nominated bank account on all due dates.
There are three possible outcomes from a direct debit attempt:
1. Funds cleared;
2. Direct debit rejected (due to invalid bank
account for instance); or
3. Direct debit processed but subsequently
reversed (the bank has three days to reverse a direct debit). The most common
reason for a reversal is a lack of funds in the rate payer’s bank account.
If a direct debit is rejected or reversed, the Council will take
this to mean the EUC has not been paid and the enforcement procedure will
commence.
Collection Roles
The Council relies on both internal and external resources
when undertaking debt collection.
Internally, debt collection is the responsibility of Rates
Section, as part of the Finance unit.
Externally, the Council also relies on a debt recovery
services provider who is selected and appointed by way of tender.
In undertaking enforcement in respect of EUAs, the Council
will rely on both its internal and external resources as indicated in the steps
that comprise the Council’s enforcement procedure.
Step 1: EUA Billing Notice
Each quarter, an EUA billing notice will be issued to the Building
Owner in accordance with the Agreed Repayment Arrangement.
Twenty eight (28) days after issuing an EUA billing notice, the
Council will attempt a direct debit on the Building Owner’s account.
Step 2: Reminder Notice 1
The Council will wait three days from the direct
debit date (including the day that the funds are received) to determine that
the funds debited are cleared funds. If on the 4th day after the direct debit
date, the status of the funds is that they are either rejected or withdrawn,
then the Council will issue a reminder notice in the form of a Direct Debit
Dishonour Letter.
This
notice will:
a) notify the Building Owner that the direct
debit has been unsuccessful and that another direct debit will be attempted in
7 days; and
b) since the payment of the outstanding balance
is not paid on due date, the EUA account has already started to incur penalty
interest charge as from the time it became overdue as well as a direct debit
dishonour fee.
Step 3: Reminder Notice 2
If the second direct debit is rejected or
withdrawn, the Council will:
a) advise the Building Owner through another
Direct Debit Dishonour Letter, that a final direct debit for the outstanding
EUC will be attempted 7 days from the date the second reminder notice was sent;
b) stipulate the amount that is payable
including penalty interest and direct debit dishonour fee; and
c) state that a Demand Letter will be sent if
this third direct debit attempt fails.
Step 4: Demand Letter
If the third attempt at direct debit
is unsuccessful then the Council will instruct its debt recovery service
provider to send a Demand Letter to the Building Owner seeking recovery of the
outstanding EUC amount, together with the payment of accrued penalty interest
and direct debit dishonour fees.
Step 5A: Serving a Statement of Liquidated Claim (SLC)
If an EUC remains unpaid after the date of payment set out in the
Demand Letter, the Council will cause a debt recovery proceeding for a
liquidated claim to be commenced no later than twenty-eight (28) days after
such date.
Once the SLC has been filed, the Council’s debt recovery service
provider will effect service on the Building Owner at the address disclosed in
the EUA.
When the SLC is served, the Council will await the statutory 28
days that enable the Building Owner to file a Defence prior to taking Step 7.
In the event that the SLC can not be
served on the Building Owner then the Council and its debt recovery service
provider will conduct an investigation to attempt to locate the whereabouts of the
Building Owner through skip tracing and various searches.
Step 5B: Issuing a Section 569 Notice
Pursuant to Section 569(1) of the
Local Government Act 1993 a Council may, in particular circumstances, serve on
an occupier of land (the tenant) a notice of the amount of EUC unpaid or of a judgement
relating to an unpaid EUC in respect of the land which is being occupied by the
tenant.
In the event that the Council’s debt
recovery service provider is unable to effect service of an SLC on a Building
Owner, then the Council will issue an s569 Notice, through the debt recovery
service provider, provided that:
a) the Finance Provider notifies the Council as
to the tenant’s name and address; and
b) the Council is provided
with a copy of the tenant’s lease.
Any s569 Notice issued by the Council
will require that the tenant provide payment of any rent due and payable to the
Council in lieu of the Building Owner to be applied to payment of any
outstanding EUC. The s569 Notice will advise the tenant that under s569(4) of
the Local Government Act 1993 provides that “a payment under this section to
the council discharges the payer from any liability to any person to pay the
rent.”
In the event that the tenant does not
provide payment of rent to the Council, the Council will not take any further
action against the tenant.
Step 6: Pre-Judgement Letter
If there is no response from the
Building Owner within 21 days of service of the SLC then a pre-judgement letter
will be issued by the Council’s debt recovery service provider seeking payment
of the outstanding EUC within 7 days.
Step 7: Judgement
Once 28 days has lapsed since service
of the Statement of Liquidated Claim, the Council
will:
a) verify with its account systems that the EUC
remains outstanding; and
b) instruct its debt recovery
service provider to apply to the Court for default
judgement in an amount that
includes any recoverable costs of the proceedings.
Step 8: Post-Judgement Letter
The Council is ordinarily notified
within 14 days by its debt recovery service provider that judgement has been
obtained.
Within 7 days of receiving such
notification, the Council or its debt recovery service provider will:
a) notify the Building
Owner that judgement has been obtained and demand payment of the judgement debt
together with any interest that will continue to accrue within 14 days; and
b) notify the Finance
Provider that judgement has been obtained.
Step 9 Enforcement
If the Building Owner fails to:
a) provide payment in full of the judgement debt
within 14 days of demand; or
b) make arrangements that are acceptable to the
Council and the Finance Provider for payment of the judgement debt within a
further agreed period then the Council will, at its discretion, determine which
of the following enforcement options will be pursued in the circumstances of a
particular unpaid judgement debt.
The options available to the Council to enforce a judgement debt
are as follows:
i) Writ of Execution
The Council may instruct its
debt recovery service provider to apply for a Writ of Execution so as to enable
a Sherriff to attempt seizure of goods owned by the Building Owner which may be
sold to satisfy part or all of the judgement debt.
ii) Examination Summons
The Council may instruct its
debt recovery service provider to issue an Examination Summons on the Building
Owner. The Examination Summons will require the Building Owner to attend Court
and produce documents that relate to his/her financial position.
iii) Bankruptcy
Where the amount of the judgement
debt held by an individual is $5,000 or more (or such other amount as is
subsequently stipulated in the Bankruptcy Act 1966), the Council can instruct
its debt recovery service provider to serve a Bankruptcy Notice. If at the
expiration of the Bankruptcy Notice, the judgement debt remains unpaid, then the
Council can instruct its debt recovery service provider to make application for
bankruptcy. When bankrupt, the trustee in bankruptcy may then seek to liquidate
the Building Owner’s assets to pay creditors.
iv) Creditor’s Statutory Demand and Liquidation
Where the amount of the judgement
debt owed by a corporation is $2,000 or more, the Council can instruct its debt
recovery service provider to serve a Creditor’s Statutory Demand. If at the
expiry of the Demand, the judgement debt remains unpaid then the Council can
instruct its debt recovery service provider to make application for the
Corporation to be wound up. If the Corporation is then placed into liquidation,
the Court will appoint a liquidator to liquidate the assets of the Building
Owner to pay creditors.
v) Garnishee Summons
Irrespective of the amount of
the judgement debt, the Council can instruct its debt recovery service provider
to apply for a garnishee of money received by the Building Owner, whether of:
a) a bank account held by
the Building Owner;
b) a third party such as an
employer of the Building Owner or a managing agent that may be managing a
property of the Building Owner, or a tenant
vi) S569 Notice
If investigation measures
prove futile in pursuing enforcement of the judgement debt against the Building
Owner, then the Council will again consider serving a s569 Notice on the tenant
in accordance with Step 5B of this enforcement procedure.
Step 10: The Sale of Land
The Council notes that in the event
it proves necessary for any of the above enforcement actions to be taken then
it is very likely that other third parties such as mortgagees will similarly be
involved in enforcement action against the Building Owner. As the Council is
unable to exercise any power of sale over the land for a period of 5 years in
accordance with s713 of the Local Government Act 1993 it is more likely that a
mortgagee in possession will have assumed earlier control of the sale of the
land that is the subject of the EUA.
Upon the sale of the land, whether by
the Building Owner, Finance Provider, the Council or another third party, the
Council will require payment of outstanding rates and charges and any funds
received will be applied and distributed in accordance with s568 of the Local
Government Act 1993.
In the event that the Council sells
the land and the sale proceeds are insufficient to pay all outstanding rates
and charges (including EUCs) then the Council notes that clause 136K of the
Local Government (General) Regulation 2005 provides that the EUC ceases to be a
charge on the land and becomes a debt recoverable against the former building
owner.
The Council will be taken to have
exhausted its best endeavours to recover outstanding EUCs if as a result of its
enforcement actions or those of a third party, the land which is the subject of
the EUA is sold. The Council will not take any further recovery action once the
EUC ceases to be a charge on the land.
Any outstanding Charge Payment amount
remaining after deducting the proceeds from the total outstanding Charge Payment
must be paid by the Building Owner directly to its nominated Finance Provider.
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REFERENCES |
Agreements Environmental Upgrade
Agreement (EUA) Related Legislation and Standards Local Government Act 1993
· No 30 – Part 2A
Environmental Upgrade Agreements · Section 712 Special
provisions with respect to the recovery of unpaid rates and charges · Section 713 Sale of land
for unpaid rates and charges Local Government
(General) Regulation 2005 · Part 5A Environmental
Upgrade Agreements · 136K Sale of Land Guidelines for
Environmental Upgrade Agreements as published in the Government Gazette of
NSW dated 18 February 2011 Related Policies and Procedures Environmental Upgrade
Agreements Policy |
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