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Banking on County Court’s New Division

Feature Articles

Cite as: (2008) 82(12) LIJ, p. 44

The County Court is committed to settling commercial disputes fairly, as cheaply as possible and in the minimum time.

By Judge Maree Kennedy

From 1 January 2007 there is no longer a monetary limit for a proceeding in the Victorian County Court.1

When the amendments to effect the current jurisdictional increase were introduced into Parliament, Attorney-General Rob Hulls, in his second reading speech, noted that “as a general principle, litigation in the higher courts is generally more expensive and takes longer than litigation in the lower courts. Therefore, as a basic principle, jurisdiction should be allocated on the basis that users are able to commence proceedings in the lowest appropriate jurisdiction”2 as this would “enable litigants to have a choice between the County and Supreme Courts in deciding the forum for the resolution of their disputes”.3

The County Court anticipated the change by initiating the Commercial List Pilot from 1 July 2006 to trial case management and listing procedures to demonstrate to litigants and the legal profession that the Court was capable of handling cases within the scope of its increased jurisdiction. The objectives of the Commercial List Pilot were flexibility, speed, cost savings and a fair and authoritative determination of the dispute. Cases dealt with in the Pilot were subject to rigorous case management by Judge Anderson with a view to identifying the real issues and bringing the case to a conclusion (by judgment or agreement) at the earliest opportunity.

The legal profession has responded positively to the Court’s concurrent jurisdiction in commercial matters. In the year to 30 June 2007 there were 1161 commercial cases instituted. In the year to 30 June 2008 there were 1752 commercial cases instituted – an increase of approximately 50 per cent on the 2007 figures. Cases are also being commenced seeking relief well beyond the previous monetary limit of $200,000. This is across the whole range of commercial cases.

The Commercial List

From 2 June 2008, the Court’s civil list has been constituted by only two lists, the Commercial List and the Damages and Compensation List.4

There are now also a number of new and expanded divisions of the Commercial List:5

  • the General Division;
  • the Expedited Commercial Cases Division (replacing the former Commercial List Pilot);
  • the Banking and Finance Division;
  • the Family Property Division; and
  • the Building Cases Division.

Banking and Finance Division

The Banking and Finance Division is established under O.34A.06(1)(c) of the County Court Rules of Procedure in Civil Proceedings 1999. Order 34A.06(4) provides that the Banking and Finance Division “shall consist of any proceeding arising out of, concerning or related to, any transaction involving the provision of credit, including a proceeding concerning a mortgage or guarantee or for the recovery of possession of land”.6

The objective of the Banking and Finance Division is to provide appropriate management processes for cases arising from the provision of banking or financial services.

It is a judge-controlled division in which judicial and registry resources are specifically directed to the efficient resolution of these disputes. The division offers one point of contact in the registry for matters involving proceedings in the List, including the processing of default judgments. Defended proceedings will be case managed by a nominated judge and, if possible, trials will be heard by judges with experience of commercial disputes.

Judge Kennedy has been nominated to manage this division, which is currently constituted by approximately 100 active cases.

Issue of proceedings

A banking and finance case may be entered in the division as follows:

  • when a proceeding is issued, the plaintiff’s practitioner should indicate on the request to enter a list form that the case is to be entered into the Banking and Finance Division of the Commercial List;
  • any party on reasonable notice to all other parties may apply to the judge in charge of the division to enter the case in the division;
  • any judge may refer a case for entry into the Banking and Finance Division subject to the final decision of the judge in charge of the List.

If a defendant fails to enter an appearance, or after appearance fails to file a defence within the time prescribed by the rules of the Court, the plaintiff will be able to enter judgment by filing the appropriate documents with the Court registry.

Administrative mention process

If, alternatively, an appearance is filed, the filing of an appearance will trigger the administrative mention procedure. In this instance a notice will be sent by the Court to the parties requiring the parties to submit consent orders to the Court designed to manage the interlocutory processes and to allow the Court to nominate a trial date. It is expected that in the majority of cases the parties’ practitioners will themselves resolve issues arising during the interlocutory stages of the proceeding, to ensure that the case progresses to a hearing date at the earliest opportunity.

On current estimates, practitioners can expect to have a trial date within six months of entry into the List.

Directions hearings

If the parties are unable to agree on appropriate interlocutory directions, the Court should be immediately requested to nominate a directions hearing date, at which time these matters can be addressed. A standard set of directions orders is contained on the Banking and Finance Division page of the County Court website, as is the current practice note.7

In general terms, the standard orders provide for the articulation of the matters in dispute by the delivery of pleadings and particulars, mutual discovery and exchange of expert reports, mediations, and for setting down of the case for trial.

In addition, other draft orders are included which a party or the parties may consider appropriate in particular cases. For example, in guarantee cases the Court may require each party to file and exchange an affidavit sworn by the person(s) executing the guarantee, setting out the discussion between the parties prior to execution of the document and exhibiting all relevant contemporaneous notes. In seeking appropriate consent orders, the parties should keep in mind the overriding objective that cases should be determined at the earliest reasonable opportunity.

Interrogatories and discovery

Interrogatories will only be permitted in exceptional cases where the time taken to administer interrogatories and have them answered is justified by the criteria that it is likely to bring the proceeding to resolution at an earlier time.

In terms of discovery, the Court will generally require discovery of certain minimum documents reflected in the standard directions orders. A “catch-all” category comprises those documents it is “reasonable in the circumstances” to discover. Initially, it is for the parties to determine the question of reasonableness. If the parties are unable to do so, they can obtain the assistance of the Court. Generally the Court will not participate in the process of approving lists of discoverable documents. To do so in advance takes considerable time and removes from the parties the responsibility of sorting these issues out between themselves. However, if the parties have formulated schedules of documents, these can be included in the orders as the documents regarded as “reasonable” to be discovered by the parties.

Alternative dispute resolution

It is expected that all proceedings will be mediated or that the parties will appear at a case conference. The timing of a mediation will depend on the parties’ assessment. Generally, the nature of the dispute should have been articulated before mediation, but otherwise the mediation may be held before substantial costs have been incurred by the parties.

In certain circumstances the Court may also order a case conference. The parties or a representative of the corporate party, with authority to settle the proceeding, must attend. The parties may be ordered in advance of the conference to file and serve a submission of two or three pages discussing the issues of fact and law raised in the case, or to detail in an affidavit the circumstances relevant to a disputed transaction. The parties may also be required to produce copies of relevant documents relating to issues of liability and/or quantum.

The case conference will be conducted by a judge in open court. The judge will expect counsel to be familiar with the case and to be able to discuss the issues of fact and law which arise. There will be the opportunity for the parties to retire to conduct private meetings.

The objectives of the case conference are to settle the action or, if this is not possible, to refine the issues and to determine the most appropriate interlocutory steps to bring the matter quickly to trial.

Unless the parties consent, the judge who conducts the case conference will not hear the trial of the proceedings.

As well as using the case conference procedure, the Court is also looking at other more innovative forms of dispute resolution. For example, the Court has commenced a financial counselling pilot program so that in certain circumstances the Court may refer a party to undertake financial counselling with Kildonan Uniting Care. This financial counselling is intended to take place before any mediation date and is free, independent and confidential. It provides another mechanism to assist the resolution of the dispute.

Conclusion

With the combination of low costs, speedy trials (within six months) and judges with experience in commercial litigation, the establishment of the Banking and Finance Division of the Commercial List reflects the ongoing commitment of the County Court to the provision of expeditious methods of resolving commercial disputes.

JUDGE MAREE KENNEDY is the judge in charge of the Banking and Finance Division of the County Court Commercial List.

The author is grateful to Judge Anderson for his helpful comments in relation to an earlier draft of this article. Any errors remain the responsibility of the author.


1. Courts Legislation (Jurisdiction) Act 2006 (Vic), s3.

2. Victoria, Parliamentary Debates, Legislative Assembly, 7 June 2006, p1775, The Hon Rob Hulls.

3. See note 2 above.

4. O.34A.02 County Court Rules of Procedure in Civil Proceedings 1999.

5. O.34A.06 County Court Rules of Procedure in Civil Proceedings 1999.

6. Pursuant to O.34A.06(5) the concept of “credit” in para (4) includes any form of financial accommodation.

7. See http://www.countycourt.vic.gov.au/CA256D8E0005C96F/page/Lists+and+Sittings-Banking+and+Finance+Division?OpenDocument&1=30-Lists+and+Sittings~&2=15Banking+and+Finance+Division~&3=~.

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