Defences if you are sued include:
- the An agreement that the law will enforce. or agreement does not comply with the appropriate Statutory rules made by parliament or by bodies the parliament delegates power to, for example a local council or a registration authority. See delegated legislation; statute.;
- you are not a A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses. to the contract;
- you were not correctly informed about promised goods (Making a statement or doing something that is false, to try to get someone to do something they would not otherwise do, for example buy goods of poor quality.);
- you were under the age of 18 when you allegedly entered into the contract with the The person or organisation to whom a debtor owes a debt.;
- the Money that is owed by one person or business to another. is too old and therefore A law made by parliament, either state or Commonwealth. Also called an Act, and Act of parliament or legislation. barred (see ‘Statute-barred debts’, above); or
- the contract is unfair.
There may be other defences in your particular case. If you think that there are, seek legal advice.
Defences in detail
Contract does not comply with appropriate legislation
You may have a (1) A defendant’s response to the legal claims made against them in court by a prosecutor or plaintiff. (2) A lawful excuse for conduct: for example, causing minor injuries to someone while saving them from certain death. (3) ‘The defence’ is also a way of referring to the defendant and their legal team. if the contract or other related documents do not comply with the appropriate legislation. Seek legal advice to check this (see Chapter 2.4: Legal services that can help).
Not a party to the contract
Debts are not necessarily transferable from one person to another. If, for example, your father bought a car on A debt that does not have to be paid until some future time. Being allowed to pay later, in the future, for something you are getting now. and he died or disappeared before paying off the total amount, you would not be expected to pay off his debt. The debt is your father’s, and if you were sued you would have a defence. If you have not entered into a contract with the creditor that makes you personally liable for the debt, you are not liable and would have a defence.
If you agreed to buy goods on the basis of information that was supplied to you by the creditor or trader, and that information has turned out to be incorrect or inaccurate, you may have a defence.
Under 18 years old
If you are under 18 years old, a contract cannot be enforced unless it is for ‘necessary’ goods (i.e. food, clothing or transport) (see ‘Young people’ in Chapter 7.1: How contract law works).
If the debt is more than six years old, you may have a complete defence to the creditor’s claim (see ‘Statute-barred debts’, above).
Sometimes, the circumstances in which you entered into the contract can make it unfair, and this can be a defence to an action by the creditor. Ask:
- Did you understand the nature of the contract? (I.e. Do you understand English, or the details of how the contract works?)
- Were you subjected to Taking unfair or improper advantage of the weakness of another person. The influence is to make them agree to do or not to do something they would not do of their own free will. from the creditor? This may occur especially where the two parties to the contract have a particular relationship (e.g. doctor–patient, parent–child), or if there were threats of unlawful acts (i.e. a threat of violence used to coerce a person to make the agreement).
- Did you think part of the contract was unfair?
In addition to a possible defence, an unfair A contract relating to the giving of credit. may be reopened in the Federal An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate., or the Federal Circuit Court, or the Supreme, County or Magistrates’ Courts of Victoria.
If you think that you may have an unfair contract, contact a private A legal practitioner (lawyer) who sees clients and opens files to deal with their legal matters but usually does not appear in court. See also barrister., community legal centre (see Chapter 2.4: Legal services that can help) or ASIC (see contact details above).
Procedure after defence is filed
In general, all defended matters, except smaller claims (e.g. those for less than $10 000 or claims for motor vehicle collisions), are referred to a An informal, compulsory and confidential conference between the parties in a court action to try to reach a settlement or clarify any matters in dispute before the full hearing. or A form of alternative dispute resolution where an independent person (a mediator) is appointed to help the parties come to agreement. Mediators do not decide the outcome of the dispute. They help the parties consider the issues and best possible outcome. Parties may choose to use mediation instead of going to court, or the court may order the parties to go to mediation as a way of avoiding a court hearing. See also arbitration; conciliation; negotiation.. Mediation is ordinarily reserved for more complex matters, where the amount in dispute is $30 000 or more. In proceedings where the amount in dispute is less than $10 000, the matter may proceed straight to A form of alternative dispute resolution where the parties appoint an independent person (an arbitrator) to sort out their dispute. Arbitration is often the method choose to solve commercial construction and shipping disputes. It is less formal than a court hearing. An arbitrator’s decision is final and generally cannot be appealed. (s 102 Magistrates’ Court A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 1989 (Vic) (‘MC Act’)).
Pre-hearing conferences are scheduled to take place approximately 8–12 weeks after lodging a defence. Either party can request, or object to, an order to set the matter down for a pre-hearing conference. The advantage of a pre-hearing conference is that if a resolution is reached, the time and expense of the dispute are greatly reduced.
A pre-hearing conference is an informal conference between the parties (and their legal representatives) and a Magistrates’ Court The officer in charge of the administrative section of a court, which is known as the registry. See also prothonotary.. The aim of this conference is to promote a settlement or clarify the issues that are in dispute. It is advisable to attend a pre-hearing conference with an adviser.
The process is informal and discussions are confidential, so no answers given or admissions made in the pre-hearing conference can be used as Material presented to a court to prove or disprove a fact. It can include what witnesses say as well as documents and other objects. in any subsequent The time and place at which a court or tribunal hears the parties argue their case and makes a decision.. There are no The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs. payable to the court for a pre-hearing conference, unless the costs are payable in relation to an adjournment of the conference.
If either party fails to attend a pre-hearing conference, the other party may ask the registrar for an order, resulting in that party winning the case.
By Practice A legally proper instruction by one person (or body) to another, so that the person is bound to take action, or make a decision, as instructed. Compare dictation. No. 2 of 2011 the court may, if requested by a party to the proceeding, conduct the pre-hearing conference by telephone where the location of a party or other relevant person A document that sets out what a person wants to happen to their money and other property after they die. cause unreasonable expense or inconvenience to that party or person in attending a pre-hearing conference personally.
If the dispute is not resolved at the pre-hearing conference, it will be set down for arbitration or hearing, as discussed below.
Following receiving a defence, the Magistrates’ Court may, with or without the To agree to something being done, to approve an action or arrangement. See also informed consent. of the parties, refer the proceeding to mediation. Before mediation is ordered, however, the registrar will inform the parties by written notice that the matter appears to be suitable for mediation. Unless a party raises an issue for Something of value, such as money, given by one person to another person as part of a contract., a mediation referral order will be made after 21 days from the date of the notice.
Mediation is an informal process where both parties sit down with an independent third party (mediator) to try and reach a resolution to their dispute. The mediator is nominated by the parties, is impartial and assists the An approach to dispute resolution where both parties discuss the matter in dispute between them, with the aim of reaching a settlement through a consensus, compromise or agreement. See ADR (alternative dispute resolution); arbitration; conciliation; mediation. process. The advantage of mediation is that it can resolve the matter relatively quickly while keeping costs to a minimum.
Except as all the parties who attend the mediation in writing agree, no evidence can be admitted of anything said or done by any person at the mediation.
If either party fails to attend mediation, a magistrate or registrar may make an order, resulting in the defaulting party losing the case.
Within seven days of the completion of mediation, the mediator must file a mediation report in form 50A and provide a copy of the report to each party who attended the mediation.
Note that with the exception of the Melbourne Magistrates’ Court, if you defend a matter in which the amount sought against you in the complaint is less than $40 000, the proceeding will be automatically referred to mediation. Mediation takes place at the Dispute Settlement Centre of Victoria (DSCV).
At the Melbourne Magistrates’ Court, when a In a civil case, a document that a defendant must give to a plaintiff informing them that they will defend the lawsuit against them, and the reasons why. is filed, the parties are notified in writing that mediation is proposed and, barring any objections, a mediation order will be made. Within 14 days after the mediation order is made, the parties must nominate a mediator and inform the court. The mediator may be a registrar of the court, a nationally accredited mediator, or a mediator from the DSCV. Where the parties cannot agree on a mediator, the Magistrates’ Court will select a mediator and appoint the day of mediation. Fees apply to mediation.
As of 8 July 2016, claims for damage to property arising out of motor vehicle accidents (where the amount sought is less than $10 000) and claims for the recovery of (1) An agreement to pay for the temporary use of something, for example a car. Also called renting or leasing. (2) To employ someone to do work. car costs only (irrespective of the amount) have been excluded from the program because they are unlikely to be resolved at mediation (see Practice Direction No. 7 of 2016).
If the amount the creditor has claimed from you in the Magistrates’ Court is less than $10 000 and the dispute has not settled at the pre-hearing conference or mediation, the matter will be set down for arbitration, unless you are being sued for non-payment of local council or water rates.
In matters referred to arbitration, further particulars of the creditor’s claim are not allowed. Arbitration also dispenses with a number of procedural steps, including the right to serve and file the following documents: a reply, a notice to admit any fact or the authenticity of any document, notice for Compulsory sharing of facts and documents between parties before a case is heard in court., interrogatories or an expert A person who can provide direct information based on their own knowledge about a relevant fact, and appears in court to give evidence about it. In some cases a witness may provide an affidavit or deposition setting out their evidence if they are not able to attend court. statement. Previously, the creditor could not seek an order for summary judgment in a matter referred to arbitration, however, it now appears that the creditor can apply for summary judgment.
Where the amount of the claim is $5000 or more, each party is required to serve on the other party a list of documents that identifies each document in that party’s (1) Having control over property. Possession is not the same as ownership. For example, a bicycle you have borrowed from a friend is in your possession but you do not own it. (2) Having illegal drugs on your person or property. that supports the claim or defence or is injurious to the claim or defence. This must be done not less than 14 days before the date fixed for the pre-hearing conference or the date fixed for the arbitration if there was no pre-hearing conference (r 2.05 Magistrates’ Court (Miscellaneous Civil Proceedings) Rules 2010 (Vic)).
An arbitration is generally an informal court hearing conducted by a magistrate. However, the way the arbitration is run will depend on the individual magistrate hearing the matter; some magistrates run arbitrations in much the same way that they run hearings. The rules of evidence which usually apply to a hearing do not apply to arbitrations. A decision made by the court in arbitration has the same effect as if it were made at an ordinary hearing.
If you are going to arbitration, you may still need to seek legal advice.
The major advantage of arbitration is that it is sometimes informally conducted and the costs which may be awarded are limited by legislation.
However, in some circumstances, such as where the matter involves complex legal issues, a party may apply to have the dispute heard in a conventional hearing rather than through arbitration.
If the dispute is not able to be settled at a pre-hearing conference or mediation, it will be set down for hearing. A hearing is conducted before a magistrate and the A person who begins a civil action against another person. must prove all the elements of its case. You must then rebut the plaintiff’s case (provide it to be untrue). The rules of evidence apply.
If your matter goes to hearing, you will probably need legal assistance to help you prepare and run the hearing. Legal costs can be very high. If you lose, it is likely that you will be ordered to pay the creditor’s costs as well. See ‘Interest and costs on judgment’, below, for further information.
If you do not lodge a defence and there is nothing apparently incorrect about the complaint, the court will make an order against you at the request of the creditor. This decision is a court order and can be enforced in the same way as any court order. It is often called ‘judgment in Failure to do something that is legally required. For example, a person who fails to make a payment on their car is in default on the loan; if they continue to be in default the creditor may issue a default summons to take the debtor to court. of defence’ because you have not filed a defence. The order usually includes an (1) A standard set of working conditions, including pay rates, for a particular industry. (2) A court decision that a party receive compensation, such as an award of damages to compensate them for physical injuries. of costs and may include interest (see ‘Interest and costs on judgment’, below).
Interest and costs on judgment
When a court enters a judgment against you in favour of a creditor, the court makes an order stating the amount owing for the debt, plus any interest the creditor may be entitled to claim (depending on their contract with you), plus the creditor’s legal costs.
The creditor’s legal costs are calculated in accordance with the scale of costs in appendix A to the Magistrates’ Court General Rules.
The amount awarded in a court order following an action for recovery of a debt is referred to as a ‘judgment debt’.
Once an order is made against you, interest will begin to accrue on the debt from the date of judgment, calculated at a rate of interest set down by the Penalty Interest Rates Act 1983 (Vic). The applicable interest rate is currently 10 per cent (which it has been since 1 February 2017). Prior to this, the rate had been 9.50 per cent per annum since 1 June 2015. The rate varies from time to time (and may be found on the Magistrates’ Court website).
As an example, if your The amount of money that a court has ordered a debtor to pay. is $1000, the interest that would accrue on this amount in one year, at 10 per cent, is $100. Any The first step in agreeing to make a legally binding agreement. An offer must be accepted before there can be a legally enforceable contract. For example, a person can offer to sell their car for $5000 and a buyer can accept the offer and pay that purchase price. to pay by instalments made would need to be sufficient to cover this amount.
See ‘Enforcement of court orders’, below, for information about court action a creditor may take to recover the judgment debt.