By Samuel McMahon

17 November 2021

One of the hassles for residential landlords who own property in Victoria but live interstate has been the lack of access to VCAT to resolve disputes with tenants. This has left residential landlords with little alternative but to try to use the courts to obtain relief, which is not only an expensive option (generally requiring the assistance of lawyers), but also the courts have lacked dedicated procedures to deal with the kinds of disputes that arise in residential tenancy disputes, leading to there being great uncertainty as to how to obtain relief (and particularly, how to obtain possession orders).

 

This anomalous situation arose out of a little-known provision of the Australian Constitution, section 75(iv), which reserves disputes between residents of different states for the original jurisdiction of the High Court. Whilst this jurisdiction can be, and has been, delegated to other courts, including state courts (pursuant to section 77(iii) of the Constitution), the jurisdiction cannot be delegated to any other body, including any tribunal which does not have the essential characteristics of a court. A decision of the Victorian Court of Appeal in Meringnage v. Interstate Enterprises & ors. [2020] VSCA 30 confirmed that VCAT does not have the essential characteristics of a court, leaving interstate residents in a dispute with Victorian residents (including interstate landlords in a dispute with their Victorian tenants) unable to access VCAT. This has presented problems because, in practical terms, VCAT has been dealing with residential tenancy disputes virtually exclusively since its inception in 1998. Given the complex and unique nature of claims under the Residential Tenancies Act 1997, trying to seek relief in residential tenancies claims anywhere other than VCAT is fraught with difficulty, as the court procedures are not designed to deal with these claims.

 

This is set to change with a new, dedicated section of the Magistrates’ Court of Victoria being set up to deal with claims, including residential tenancy claims, that would have been heard at VCAT if the constitutional issues set out above did not prevent that. This will now give interstate residential landlords (and other interstate residents in disputes with Victorian residents) the confidence that they will be able to access justice in a forum properly set up to deal with their claims. The Magistrates’ Court will operate pursuant to the new Victorian Civil and Administrative Tribunal and Other Acts Amendment (Federal Jurisdiction and Other Matters) Act 2021, which has passed both Houses of Parliament, has received royal assent, and is set to be proclaimed later in November 2021.

 

If you require further information relevant to your circumstances, please don’t hesitate to contact our office on (03) 8600 9333 and a lawyer in our litigation and dispute resolution team would be happy to assist.

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