NCAT jurisdiction issue leaves landlords in the lurch
31 May 2019
In February 2019, the NSW Court of Appeal held that the NSW Civil and Administrative Tribunal (NCAT) is not a court and therefore cannot hear cases where one or both parties live in another state. 

This is because NCAT cannot exercise jurisdiction to determine matters with respect to interstate residents.

Ludicrously, this does not affect parties that may reside overseas or in territories (ACT or NT), or corporations (being landlords or tenants) registered interstate, a conclusion conferred from the Constitution’s reference to the jurisdiction of matters between residents living in different states.* 

This decision is the latest of many backflips on this issue, creating a climate of confusion for agents, landlords and tenants.

“NCAT is a judicial forum within which parties to a dispute can have their matters heard and determined competently, and due to its processes, efficiently and cost effectively,” says Tim McKibbin, REINSW CEO.

“As of this decision, parties requiring dispute resolution must manoeuvre through the processes of the Local Court, which, in comparison to NCAT, are complex and expensive.” 

Can you still represent your client?

In cases heard before NCAT, an agent can represent their client. However, this begs the question: if the jurisdiction issue forces a case into the Local Court, can an agent still represent their client?

The answer is not so simple.

In most cases, in court a client is represented by themselves or a solicitor. It appears that it may be possible to seek permission from the Court for a non-legal representative (e.g. a property manager) to represent them. However, REINSW has received conflicting opinions on this from the Court itself.

REINSW has received confirmation that parties can only be represented by solicitors in the Local Court, but is also aware of a section in the Summons (being, a court document) where the client appears to be able to seek leave for their property manager to represent them as their non-legal representative and that whether the property manager can represent their client in the Local Court is a general discretionary power conferred to the Court, and the application may or may not be rejected upon assessment.

A costly decision

A recent judgement handed down by the Local Court exemplifies the unnecessary costs created by the NCAT jurisdiction issue.

In McLellen v Laverty, the plaintiff was required to engage a solicitor and pay court costs upfront.

The plaintiff was seeking payment of rental arrears, locksmith charges and sheriff fees.

Just to have the case heard, the plaintiff had already spent thousands of dollars, with no guarantee of recouping the lost funds. The managing agency also suffered, losing a portion of their management fee and in paying Local Court costs.

If the case had been heard by NCAT, the standard fee for the hearing would be $50.

Where does responsibility lie?

REINSW and the Property Management Chapter Committee have raised concerns regarding NCAT’s inability to hear cases if one or more parties lives interstate.

“REINSW has discovered that there are conflicting views on the issue of representation, making it hard for agents to know what to do in these circumstances,” says McKibbin.

“However, in regards to what we do know, the current process of going to Local Court when NCAT can't hear a case is both cumbersome and expensive for agents, landlords and tenants. And this is why NCAT was established.

“Accordingly, parties elect not to pursue their legal rights because the costs make it prohibitive. This is clearly unsatisfactory and requires further attention.

“The question has to be asked of the Attorney General: 'When will the Government make the minor amendment to the NCAT legislation to remedy this issue?'”
 
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*In Queensland, QCAT can hear matters where one or both parties live interstate because QCAT is a court of record by virtue of section 164 of the Queensland Civil and Administrative Tribunal Act 2009.