Are you in debt?

If a final court order has been made against you because you did not attend the hearing, you may, under section 110 of the Magistrates’ Court Act 1989 (Vic) (‘MC Act’), apply for the order to be set aside and the case reheard. This can be done at any stage after the order has been made, but the later you apply the more difficult it is to have the order set aside. You can only request a rehearing if you have a proper defence to the claim, or some dispute about the actual amount of the claim.

Before you make an application for a rehearing, think about the costs. Unless you have applied for a rehearing promptly, and you have a good reason for not having defended at the first hearing, the court will usually require you to pay the creditor’s legal costs, even if your rehearing application is granted.

Before applying for a rehearing, advice should be sought from a solicitor or community legal centre (see ‘Community legal centres’ in Chapter 2.4: Legal services that can help).

To get a rehearing, lodge form 46B (Magistrates’ Court General Rules) with the Magistrates’ Court’s registrar (r 46.09).

A fee of $157, or $185.10 with preparation by a registrar, must be paid.

The application must state:

1. why you didn’t appear on the hearing date; and/or
2. why you didn’t return the notice of defence.

A common reason given is that the debtor didn’t receive the complaint. In such cases the court will usually grant a rehearing. However, if you received the complaint and failed to take any action, it may be harder to obtain a rehearing.

The Magistrates’ Court will require the applicant for a rehearing to lodge a supporting affidavit setting out the facts to be relied upon in the application. The affidavit should be served on the creditor at least 14 days before the rehearing. The creditor must then indicate whether you are required to attend court to be cross-examined on the affidavit. You should assume that you will be required to give evidence in support of the application.

If the creditor has commenced enforcement action against you on the order, an application for rehearing will stop the enforcement action. Therefore, if the creditor has issued a warrant to the sheriff (see ‘Warrant to seize property’ in ‘Enforcement of court orders‘), it is important to give the sheriff a copy of the application for rehearing to stop the sheriff from executing the warrant. Any enforcement of the original court order is stopped until the application has been dealt with.

If the application for rehearing is granted, the original court order against the debtor is no longer in effect and the creditor’s claim must be heard again. The rehearing can go ahead immediately or it can be adjourned to a later date. A request for an adjournment to give you time to prepare your case or to get more information will almost certainly be granted. In fact, most hearings are adjourned.

If you are granted a rehearing and an adjournment, legal costs may be significant. Even if you are successful in your defence you may have to pay some or all of these costs.