Section 265 — Debt from failure to comply with garnishee notice

265 Debt from failure to comply with garnishee notice

(1) If a person (garnishee debtor):

(a) is given a notice under section 264 in respect of a debt; and

(b) fails to comply with the notice to the extent that the garnishee debtor is capable of complying with it;

then the amount of the debt outstanding is recoverable from the garnishee debtor by the Commonwealth by:

(c) legal proceedings in a court of competent jurisdiction; or

(d) a garnishee notice under section 264.

(2) The reference in subsection (1) to the amount of the debt outstanding is a reference to whichever is the lesser of:

(a) as much of the amount required by the notice under section 264 to be paid by the garnishee debtor as the garnishee debtor was able to pay; or

(b) as much of the debt due at the time when the notice was given as remains due from time to time.

(3) If the Commonwealth recovers:

(a) the whole or a part of the debt due by the garnishee debtor; or

(b) the whole or a part of the debt due by the debtor (within the meaning of section 264);

then:

(c) both debts are reduced by the amount that the Commonwealth has so recovered; and

(d) the amount specified in the notice under section 264 is taken to be reduced by the amount so recovered.