Debt Collection: Repossession of convenience store, despite considerable obstacles Written by Ian James
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Case Studies

 

Client: Law firm

Project: To collect around $100,000 or repossess a convenience store, and repossess all the stock, fixtures and fittings and cash on hand

Service: Debt Collection

Key achievements:

  • Thorough research to establish the validity of the security
  • Negotiation with local police to permit the repossession to take place
  • Repossession of the store, stock, fixtures and fittings and cash on hand
  • Repayment of the debt in full within three days of the repossession

Synopsis:

During the 1980s, our principal, Ian James, dealt with thousands of repossessions of assorted items, including thoroughbred horses, boats, buses, trucks, livestock, cars, TV’s and other brown goods, white goods, credit cards, a pharmacy, a prawn trawler and just about anything else you can think of.

In 1985, Ian was engaged to repossess the security for a Queensland business loan by a solicitor acting on behalf of the secured creditor.

Ian writes:

The $50,000 loan had been obtained for the purchase of a convenience store business in suburban Brisbane and was secured by a Bill of Sale. No repayments had ever been made, and the secured creditor had been making written demands for repayment for several years, to no avail. When I was engaged, the solicitor instructed me to collect the debt of around $100,000 or call up the Bill of Sale and enforce the creditor’s rights to the security by taking possession of the shop and all of its contents, including stock, fixtures and fittings and cash on hand.

After ensuring that the Bill of Sale was registered and stamp duty had been paid, I arranged for a locksmith and a team of inventory counters from Pickles (a large Brisbane inventory firm) to attend the shop at 7pm one evening.

My research revealed that the Bills of Sale and Other Instruments Act 1955 (QLD) permitted forced entry so long as any damage caused was subsequently repaired by the repossessing agent. At around 2pm on the day that the repossession was to take place, I visited the local police station to ensure that there would not be any interference during the recovery action. I presented my Commercial Agent’s Licence and a copy of the Bill of Sale, and was assured by the duty Sergeant that all was in order and that should the police be called to attend they would not interfere with the repossession.

At 7pm that evening I arrived at the shop for the repossession, accompanied by the locksmith and three Pickles employees. The shop was located in a quiet residential area and had already closed for the night, although the shopkeeper was still inside. I knocked on the door and told the shopkeeper that in the absence of immediate payment of around $100,000 I would repossess the shop. She refused to open the door.

As I tried to negotiate with the shopkeeper, a crowd of locals started to gather, as well as the usual number of barking dogs. A number of police cars soon arrived on the scene. By 8pm there was a crowd of around fifty people, ten police officers, and a handful of noisy dogs.

The officers had no knowledge of my visit to the police station earlier in the day, apparently because the shift had changed at 4pm and the duty Sergeant had not recorded my visit in the duty log. They insisted that we had no right to be there and told us to leave. I advised them that in the absence of the door being opened voluntarily, I would smash the door open and repossess the shop. This did not help matters, and once again we were told to depart.

The emerging standoff had a considerable element of danger about it. At the time there was a large-scale electricity strike in southern Queensland (the SEQUEB strike), and then Premier Joh Bjelke-Petersen – never one to back down from a fight – had passed a special Act of Parliament giving the police draconian powers of arrest and detention, not unlike today’s anti-terrorism laws. As was often the case in those days, the Queensland constabulary was not shy about using its powers.

I tried to ring the solicitor for advice, but at that time  there were no mobiles and the public phones were not working due to the electricity strike. Finally, the officer in charge took me aside and I tried to convince him that we were within our rights to enter the shop forcibly. I hastily shuffled through my copy of the Bills of Sale Act to find the provision permitting forced entry during repossessions. This was quite a task, as it was now dark and the lack of street lighting due to the strike meant that I was forced to search through my copy of the Act while holding a kerosene lantern, while standing; for some reason I didn’t have a torch.

Being unable to find the appropriate section, I finally told the officer in charge that I had no obligation to show him, and warned him that if the police prevented us from pursuing our rights under the law, they would be held fully responsible for the consequences of failing to honour an Act of the Parliament of Queensland. The officer said: “You’re serious aren’t you? You’re going to smash the door in.”  I said: “You bet I am.” With that, he went around to the back of the shop, spoke to the shopkeeper, and she unlocked the door.

The Pickles’ employees moved in and counted the stock, the locksmith changed the locks and by midnight we had secured the premises and finished the inventory.

Three days later the Bill of Sale was paid out, with interest and costs, and control of the shop and its contents was returned to the previously-defaulting owner.