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How Long Do You Have to Recover an Unpaid Invoice in Western Australia?
- Nikolina Milošević
- Jul 10
- 5 min read
In Western Australia, you generally have six years to recover an unpaid invoice through the courts. The clock starts from the date the debt became payable, which is usually the day after your payment terms expired, not the date you issued the invoice. After six years, the debt becomes statute-barred, and while it still exists in principle, it can no longer be enforced through legal proceedings.
That is the headline rule. The detail is where businesses lose money, because the six-year period does not sit still. It can restart. It can be paused. And for certain types of debt, it does not apply at all.
This blog explains how the WA limitation period works in practice, what triggers a reset of the clock, and what you should be doing now if you have older invoices sitting on your ledger.
The six-year rule
The Limitation Act 2005 (WA), section 13, sets a general six-year limitation period for actions on a simple contract, including most business debts. An unpaid invoice arising from a supply of goods or services under a contract or terms of trade falls into this category.
The six years runs from the date the cause of action accrued. For a debt, that is the date the debt became payable. If your terms are payment within 14 days of invoice and the invoice was issued on 1 August 2024, the debt became payable on 15 August 2024, and the limitation clock started running on that date.
That means the last day to commence court proceedings is 14 August 2030. If you file on 15 August 2030 or later, the limitation defense is available to the debtor, and your claim will fail regardless of how strong the underlying merits are.
When the clock starts
Businesses sometimes assume the clock starts on the date the invoice was issued, or on the date the debtor first refused to pay, or on the date a dispute arose. It does not. It starts on the date the debt became legally payable, which is defined by the payment terms in your contract or terms of trade.
If your terms do not specify a payment period, the debt is generally payable on demand, which affects when the clock starts and how it runs. This is one of several reasons your terms of trade should be drafted clearly.
What resets the clock
The first way is a written acknowledgment of the debt by the debtor. If the debtor confirms in writing that they owe the money, whether by letter, by email, or by any other written form, the acknowledgment can restart the six-year period from the date of the acknowledgment.
The second way is a part payment. If the debtor pays any part of the debt, that payment can restart the six-year clock from the date of the payment. Even a very small payment on a very old debt can revive it.
Verbal acknowledgments do not reset the clock in WA. The acknowledgment must be in writing and must clearly admit that the debt exists.
This creates both an opportunity and a risk. If you have a debt approaching the six-year limit and the debtor pays any amount, the debt is revived and you have another six years. But it also means a debtor who is negotiating with you should be assumed to know this and may deliberately avoid any written statement that would restart their exposure.
What does not restart the clock
Sending your own letters, following up by email, issuing further invoices, or continuing to chase the debt does not reset the limitation period. Only action by the debtor, in writing or by payment, restarts the clock. This surprises businesses that assume active pursuit of the debt keeps it alive, however it does not.
When six years is not the answer
Not every debt in Western Australia is subject to a six-year limitation period.
Debts under a deed rather than a simple contract are subject to a twelve-year limitation period under the Limitation Act 2005 (WA). A deed is a specific type of legal document that meets particular formal requirements, and businesses that document key arrangements as deeds gain a longer recovery window as one of several benefits.
Court judgments have their own enforcement periods under the Civil Judgments Enforcement Act 2004 (WA), which operate separately from the limitation period that applied to the underlying debt.
Fraud, concealment, and certain other circumstances can extend or postpone the limitation period. These are exceptions rather than the rule and rely on specific facts being established.
What “statute-barred” actually means
A statute-barred debt is not extinguished. The debtor still owes the money as a matter of principle. But the creditor loses the ability to enforce the debt through court proceedings, which practically ends the recovery pathway for most creditors.
There are limited situations in which a statute-barred debt can still be relevant. If the debtor voluntarily pays it, that payment is valid. If the debtor acknowledges the debt in writing after the limitation period has expired, arguments can arise about whether the acknowledgment revives the debt. But relying on those possibilities is not a strategy.
What to do about old debts sitting on your ledger
If you have invoices that are more than four years old and have never been formally pursued, you are running out of time to do anything about them through the courts.
That does not mean the situation is hopeless, but it does mean the window is closing and the recovery strategy for those debts is different from the strategy for recent debts.
There are three practical steps:
First, audit the age of your outstanding debts. Sort them by date the debt became payable, not by date invoiced. This gives you an accurate view of where the six-year clock stands on each one.
Second, prioritise the older debts. If a debt is approaching its limitation, formal action needs to be commenced before that limitation expires, even if the amount is modest. Losing recoverability on a debt because the clock ran out is worse than settling for a lower amount before the clock ran out.
Third, be careful with acknowledgments. If a debtor of yours is approaching a limitation date, any part payment they make revives the whole debt. Negotiating that outcome deliberately and documenting it in a Deed of Settlement and Release, can turn a nearly expired debt back into a recoverable one.
Why this matters more than most businesses realise
The six-year limitation is not an academic point. It is the reason businesses that let invoices drift into “chase later” mode sometimes discover, years later, that later has become never.
If you are not sure where your outstanding debts sit against the WA limitation clock, a Strategy Call is the fastest way to get a clear picture and a plan.
This blog is intended for general information purposes only and does not constitute legal advice. The content is based on Australian law and may not be current at the time you read it. Legal requirements may vary depending on your circumstances. Always seek independent legal advice tailored to your specific situation before acting on any information provided.
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