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VCAT - Is An Overhaul Needed? (Part 1)

by Carl Jones

Formed under an Act in 1998, the Victorian Civil and Administrative Tribunal (VCAT) was essentially established for two reasons:

(a) To take the weight off an ever-burgeoning Magistrates' Court system that was beginnning to experience lengthy delays in getting matters to hearing; and

(b) To create a more streamlined, affordable legal process for individuals and small business through discouraging the use of lawyers and legal representatives, although the Civil Division (one of 4 Divisions) does allow legal representation where the matter exceeds $10,000.

However, with the Civil Division system now seemingly experiencing much lengthier delays than the Magistrates' Court; with too much flexibility/leniency seemingly being given to the party being pursued for payment (known as 'the Respondent'); and, with there being very little certainty for the party taking the action (known as 'the Applicant') to recover legal costs, one has to question the very relevance of VCAT today in regards to civil litigation matters.

In Part 1 of a series of articles exploring this very question, Director, Carl Jones looks at the frustrations faced by some of our clients in litigating through the VCAT system.

When filing an application in the Civil Division at VCAT, Applicants can expect between a 3 to 4 week wait before a letter of acknowledgement of the receipt of the application is even received back from VCAT. This letter normally also acts as a notification of the actual hearing (or mediation) date, and this is usually set a further 6 to 8 weeks down the track. We also always ensure that we contact the Respondent within a week of the receipt of this notification from VCAT so that they cannot otheriwse argue that they were not aware of the pending hearing/mediation. So, in the blink of an eye, the matter has already been in the system 3 months. In by far the majority of the cases we have dealt with, the Respondent will not have even given any hint of having a plausible defence (or possible counter-claim) prior to the hearing or mediation date.

In a few cases that our group has dealt with over the past couple of years, the apparent leniency afforded to the Respondent by VCAT has, in my opinion, been completely undeserving and has simply served to highlight the ability of Respondent's to be able to hijack the system to their own advantage. Quite frankly, the VCAT (Civil Division) system is not forceful enough in making final determinations and, in doing so, is highly disrespectful of the Applicant's time and effort in proceeding with the application to try and retrieve money that they are owed.

In one recent case, the matter was very simplistic and our Client was owed considerably less than $10,000, meaning that neither party could be legally represented at the hearing. A period of 4 months elapsed from when we submitted the application on behalf of our Client to the first scheduled hearing date. On the day of the hearing, the representative for the Respondent company called VCAT requesting an adjournment as he was ill. Our Client objected to any adjournment (the Company itself was not sick, and someone else should have been able to appear) and VCAT susbequently agreed and made an order in favour of our Client that the Respondent pay them the full amount owing plus the Application Fee - great, and what one would expect when the Applicant has been inconvenienced in such a way.

One month later and the Respondent filed for a Review & Re-hearing in the matter (supported by a signed medical certificate), although it took another 2 months for our Client to be notified of this by VCAT, and the re-hearing was then scheduled by them to be heard another 2 months later - there went another 4 months. Our Client then proceeded to attend the Review & Re-hearing only for the Respondent to once again fail to appear on the day - this time VCAT did not receive any call on the day from the Respondent company. VCAT then made an order that the Respondent's application for review was refused and that the original order (in favour of our Client) from 4 months earlier remain in force.

Upon receipt 6 weeks later of a certified copy of the order from VCAT, the matter was then (correctly) transferred to the Magistrates' Court (i.e. a totally separate jurisdiction) and a Judgment order obtained against the Respondent company. However, this was not the end of our Client's experience with VCAT as a handful of days later they received another letter from them informing that they had again accepted an application from the Respondent for a (second) Review & Re-hearing in this matter. In our opinion, the Respondent's supporting Statutory Declaration setting out the reason for their latest non-attendance was full of holes. We were left further bemused by VCAT's later decision to reject our request (on our Client's behalf) that they strike out the Respondent's latest application for Review & Re-hearing, particularly given that the matter was no longer in their jurisdiction (as it had been transferred to the Magistrates' Court and further legl action taken).

The matter was eventually heard 3 months later - some 13 months after the application was initially sent off to VCAT - only for the Respondent company to once again fail to appear. Our Client received no compensation whatsoever for the additional 2 mornings that their representative was forced to attend the Review & Re-hearing applications, and I can categorically say that this type of delay/tactic by the party owing the money simply would not have been tolerated within the Magistrates' Court system had the matter initially been issued through that jurisdiction.