Our client is a digital marketing agency that runs online advertising campaigns for businesses.
One business client signed up for a monthly marketing package and paid on time for almost a year. Then the payments stopped, but the work kept going.
By the time the agency ended the arrangement, months of invoices were unpaid. ezylegal took the client to court in New South Wales, got judgment, and followed up with a statutory demand. The agency got paid.
At a glance
- Problem: A business client stopped paying a marketing agency’s fixed monthly invoices, leaving months of fees unpaid.
- Claim against: The business client.
- Legal basis: Breach of contract, to recover the unpaid fees as a debt.
- Result: Default judgment in the NSW Local Court for the full claim plus costs, then payment recovered after a statutory demand.
Months of work, no payment
The agency and its client agreed a fixed monthly fee for ongoing marketing services. Invoices went out every month, and for almost a year they were paid.
Then they weren’t. The agency kept working, then eventually ended the contract. The client made one part-payment to cover two of the older invoices, and nothing more.
Taking it to court
ezylegal filed a claim in the Small Claims Division of the NSW Local Court for the unpaid invoices, plus interest and costs, and served it on the client.
The client didn’t file a defence. ezylegal applied for default judgment, and the court ordered the client to pay the full claim, including costs.
Turning a judgment into payment
A judgment is only useful if it gets paid. So ezylegal served the client company with a creditor’s statutory demand. That is a formal demand which, if ignored, lets a creditor apply to have the company wound up.
That got the client’s attention. It phoned us, made an offer, and the agency recovered its money.
How default judgment works
When you file a claim in the NSW Local Court, it has to be served on the other side. From then, they have 28 days to file a defence.
If they don’t, you can ask the court for default judgment. For a debt like unpaid invoices, the court registrar can enter it on the papers, without a hearing. You don’t need to go to court or give evidence in person.
The judgment covers the amount claimed, plus interest and legal costs.
What default judgment means for the other side
A default judgment is a court order to pay, and it has real consequences for the business that ignored the claim:
- The debt becomes enforceable. If it still isn’t paid, the court can issue a writ to seize and sell property, or a garnishee order to take money straight from bank accounts, wages or money owed to the debtor by others.
- They can be ordered to explain their finances. The court can issue an examination notice requiring them to disclose their income, assets and debts.
- Interest keeps adding up. Interest runs on the judgment until it’s paid in full.
- It can affect their credit. Court judgments are public records and can show up on credit reports, making it harder to borrow or get supplier accounts.
- A company can be wound up. A company that doesn’t pay can be served with a statutory demand. If it doesn’t pay or settle within 21 days, the creditor can apply to have it wound up.
The other side can apply to have a default judgment set aside, but they have to act quickly, explain why they didn’t respond, and show they have a real defence. Ignoring a court claim almost always makes things worse.
What can I do if a business client won’t pay my invoices?
You can sue for the unpaid invoices, plus interest and costs. If the client is a company and still won’t pay after judgment, a statutory demand puts serious pressure on it.
For smaller business debts, the NSW Local Court’s Small Claims Division and the Queensland Magistrates Court are quick and affordable. Many debtors don’t defend at all, so you can get judgment without a hearing. A statutory demand then gives a company 21 days to pay or deal with the debt, or risk being wound up.
If you’re facing something similar
If a business client has stopped paying you:
- have a signed agreement that sets out your fees and payment terms
- send invoices on time, and chase overdue ones in writing straight away
- pause the work if invoices go unpaid, rather than letting the debt grow
- keep a record of every invoice, payment and reminder
- check the client’s company details on the ASIC register
Get advice early, because time limits apply. Read more about debt and contract disputes.
ezylegal operates on a no-win, no-fee* basis across consumer, commercial and insurance disputes, so you’re not weighing the cost of a lawyer against the cost of walking away.