Couple’s $70K wedding in ruins amid coronavirus pandemic

A bride-to-be’s nuptials are fast becoming a financial nightmare, with her venue potentially going bust – while holding onto her cash.

Welcome to Sisters In Law, news.com.au’s weekly column solving all of your legal problems. This week, our resident lawyers and real-life sisters Alison and Jillian Barrett from Maurice Blackburn tackle your legal rights when it comes to wedding cancellations.

QUESTION: I had my dream $70,000 wedding planned for May 2020 and then COVID-19 hit and it had to be cancelled. My fiance and I were hoping to reschedule to May 2021 but now I’ve heard that the venue may be going bust. I’ve emailed and called the manager but no one is getting back to me. I’m terrified that they will go bankrupt and I’ll lose all of my money. What are my rights? – Stephanie, NSW

ANSWER: It sounds like your dream wedding could be turning into a financial nightmare.

You have done the right thing by contacting the venue directly in an attempt to find out where you stand and to resolve the issue.

We’d suggest following up in writing one more time and letting them know that if you don’t hear back from them with a suggested resolution within seven days, you will be contacting NSW Fair Trading to make a complaint.

Fair Trading will assess your complaint and determine if they can assist you in reaching a resolution.

If the venue is not in financial difficulty, and is merely failing to respond to your rescheduling requests while still withholding your money, you may be entitled to take your complaint to the Civil and Administrative Tribunal.

The Tribunal can provide information on how to lodge a claim and the dispute resolution procedure.

Your concerns about the venue potentially going bust are valid in the current climate.

This would occur if they can’t pay their debts when they are due, meaning they would become insolvent.

If the business is trading as a company under the law, they would go through an insolvency process which could be voluntary administration, liquidation or receivership involving an external administrator taking over the company’s affairs.

The Australian Securities and Investments Commission (ASIC) website allows you to do a free search to work out if the company is going through an insolvency process or under external administration.

If the company is going through insolvency, you’ll have to register with the external administrator appointed (also available on ASIC’s website) to have any hope of recovering your money.

RELATED: New restrictions announced for Victoria

You may be entitled to take your complaint to the Civil and Administrative Tribunal. Picture: iStock

All of these insolvency processes have the same effect on you. As someone who is owed money having paid for a service you have not received, you’ll be an unsecured creditor.

The law says that as an unsecured creditor you are repaid last in line after other types of creditors, like employees and shareholders, have been paid.

Assuming there is enough money left at this time, the amount you are repaid may need to be reduced to give all unsecured creditors an equal proportion of the money they are owed.

If you paid your deposit on a credit card or with a loan and the company does go into external administration you may be able to request a chargeback on the transaction from your bank or financial institution that issued the credit card.

Sometimes there are time limits on making a chargeback claim like this, so act quickly.

If the business is trading as a sole trader or a partnership, the process is slightly different in that you need to pursue the business owners personally in order to be repaid.

Bankruptcy is handled by the Australian Financial Security Authority rather than ASIC.

If there is no lavish weekender on the Northern Beaches to repay the business debts (including your deposit), the business owner may file for bankruptcy. If you are owed more than $20,000, you can apply as a creditor to have the owner declared bankrupt.

This will prevent the owner from managing his or her own finances and a trustee will be appointed to manage the money and assets, including the business.

The trustee will look at all of the business owner’s assets and income and work out a fair way to repay anyone who is owed money. This may also include payment plans if the business owner is still earning an income.

The Australian Financial Security Authority’s website has a lot of helpful information about the bankruptcy process.

Good luck sorting out your concerns.

This legal information is general in nature and should not be regarded as specific legal advice or relied upon. Persons requiring particular legal advice should consult a solicitor.

If you have a legal question you would like Alison and Jillian to answer, please email [e-mail]

Get more from Alison and Jillian on their Facebook page