Recovering a debt through the Magistrates Court of Victoria

If you are owed a debt, whether it be through breach of contract or damages sought, you can file proceedings in the Magistrates Court of Victoria for an amount up to $100,000.

To commence a claim in the Magistrates Court, you are required to file a document called a Complaint which includes the amount sought, a proper basis certification and an overarching obligations certificate. The Complaint form will need to set out the basis of your claim. These required forms can be complicated and it is best to engage solicitors to prepare them on your behalf to ensure it is correct.

Once filed, the Complaint needs to be served along with two blank notices of defence upon the defendant or defendants. Service on a debtor who is an individual is required to be in person and you should engage a process server to do this on your behalf. If the debtor is a company, service can occur by posting the Complaint and other relevant documents to the registered office of the defendant.

Once a service is completed, the defendant has 21 days to file a Notice of Defence should they wish to dispute the claim.

If no notice of defence is filed within that 21-day period, the plaintiff or judgement creditor can seek a judgement in default of defence.

If a Notice of Defence is filed, the Magistrates Court will refer the matter to either a mediation or pre-hearing conference. Both processes are rather informal and all parties are required to attend.

A pre-hearing conference is a conference between the parties (and possibly their legal representatives if represented) and a Registrar of the Magistrates Court. The aim is for the parties to engage in negotiations to see if a resolution can be reached. It is also used to clarify the issues in dispute should no agreement be reached.

If a pre-hearing conference is not ordered but a mediation is, there will generally be a mediator from the Dispute Settlement Centre of Victoria who is an impartial person and attempts to engage the parties in negotiations about resolving the matter without the matter proceeding to a final hearing.

If the amount claimed is less than $10,000, the Magistrates Court will generally list the matter for an Arbitration. Arbitration is generally an informal court hearing conducted by a Magistrate who will have the ultimate discretion about how the arbitration is to proceed and the outcome.

If the claim is above $10,000 and fails to settle at a pre-hearing conference or mediation, the matter will be referred to a final hearing. A final hearing is conducted before a Magistrate where the plaintiff must prove all the elements of the case. Parties to a hearing which is proceeding to a final hearing will generally benefit from having legal assistance.

A party who is successful in the case against debtor or a debtor who is successful in a defence against the plaintiff can apply for a costs order against the unsuccessful party. A Magistrate will determine if a cost order is appropriate and will give weight to previous offers made by parties when attempting to resolve the case as well as the strength of the case.

If you have any questions about the above information or you would like assistance, please contact us at reception@ballaratlawyers.net.au or on 5303 0281 to make an appointment. 

The information on this website is of a general nature only. It is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice about your particular circumstances.

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