Accountants in the Disputes Tribunal
In my role as a Disputes Tribunal Referee, I get cases before me involving accountants in public practice reasonably regularly say about once a month. Often they involve disgruntled clients who do not believe they have had fair value for money. Some clients have little understanding of the nature and complexity of accounting. People come along and say, I’ve done all the adding up. I handed over my cashbook. He’s charged me $1000. What’s he done for it? The client expresses dissatisfaction by not paying. The accountant takes them to the Tribunal.
In this article I’ll try to explain some of the important points about how the Tribunal works, and present seven suggestions about how to make the system work for you.
The basic rules of the Tribunal are:
There must be a dispute. The Tribunal does not simply enforce bad debts. However, ANY indication, verbal or in writing, that the debtor does not believe they should pay in full, can be sufficient.
Your lawyer may not represent you. It is possible to bring your lawyer as a witness, but witnesses may not be present during the submissions and a lawyer/witness can seldom influence the debate. If you seek to rely on legal submissions, ask your lawyer to prepare them and present them yourself.
You can take a claim of $7500 or less to the Tribunal as of right. If the other party agrees, you can take a claim of up to $12,000. Obviously it’s in a debtor’s interests to refuse consent to the increase in jurisdiction. However, if you lodge in the District Court it is a solid negotiating point to agree to a transfer to the Tribunal only if the full sum is considered. If your claim is beyond $7500 you can abandon part of it to get it into the Tribunal.
A notice of proceedings issued in the District Court for a sum of $7500 or less which is met by a statement of defence, is likely to be transferred to the Tribunal as a matter of course, whether you like it or not. If you knew it was disputed when you sued it is difficult to argue for the recovery of the filing fees.
The cost of filing a case used to be minimal. It now costs up to $200 for the largest claims. This still compares very favourably with the cost of a defended hearing in the District Court (for which you should probably allow at least $5000). The computer age has not yet reached the Tribunal and so the form must be hand-written or typed. You can save some time if you already have the outline of your claim on your PC. Simply print if off and write see attached details on the claim form.
A referee hears all parties and witnesses. There is provision to facilitate a settlement if this is appropriate. In most cases the referee makes a judgment. Referees must have regard to the law but are not bound by strict legal forms and technicalities. A referee must consider the "substantial merits and justice" of the case.
Rights of appeal to the District Court are very limited. Essentially appeals are granted only when the referee has conducted proceedings unfairly and to the prejudice of one party. Of course, almost every time a referee or judge in any court makes a decision there’s at least one unhappy party. That doesn’t mean there are grounds for appeal.
Winning doesn't guarantee payment but the usual enforcement machinery of the District Court (Orders for Examination, Distress Warrants) is available to a successful party. Use it. The usual court filing fees are not charged.
Here are seven suggestions about how to make the system work for you:
- Be prepared - Write down what you wish to say and practice your argument beforehand. Make a copy of your statement for the referee. Gather your evidence copies of relevant letters, invoices and other documents, records of telephone calls, etc. Anticipate the debtor’s arguments and have evidence to rebut them. Consider whether you require any witnesses. In some cases a written statement is enough. If you know that a particular point will be strenuously debated, you may want to bring a witness to the hearing.
- Be reasonable Accept fair points from the other side, be open to compromise. Stay with the issues and don’t be drawn into personal arguments. Reasonable arguments carry more weight.
- Use law which supports your case. If you draw to the attention of the Tribunal relevant statutes and cases, the referee is obliged to consider them. Not to do so provides grounds for an appeal. Not all referees are lawyers but all have some training in basic commercial law. Make it easy by bringing along photocopies of relevant material and summaries of long or complex cases.
- Think about timing of payment the referee has discretion with regard to the timing of payment. In some cases it may be appropriate to make an order payable forthwith or within only a few days. If you know the debtor is unable to pay in a lump sum bring a completed AP form to the hearing and ask for the first installment payment to be made within only a few days.
- Try to be face to face - if your debtor is in another part of the country, the matter can be conducted by conference call. In this situation it is to your advantage to initiate the matter in your home Tribunal. The other party will be linked up by phone. The party who is face to face with the referee tends to have an advantage in that it is easier to explain things in person than it is over the phone.
- Anticipate rehearing applications often a debtor will not turn up. In such a case the decision should be awarded to you. It is not unusual for the absent party to later request a rehearing on grounds of lack of notice. Service by the Department for Courts is usually by normal post and applicants for rehearing are given the benefit of the doubt. If you are facing a debtor whom you suspect might try this one you can serve a copy of the claim on him/her yourself, either personally or by registered post. Bring evidence of such service to the hearing. No rehearing can be granted without you being given an opportunity to comment.
- Cover all options - where you have two people both denying liability and stating the other is liable include both in your application. The situation of a new owner claiming the old owner was liable (or vice versa) is common. Even if you strongly believe that A is liable, failure to include B might result in the claim being dismissed and you no better off.
No court or tribunal gets every decision right. Referees are like any other group of people; some are more experienced and more able than others. Everyone makes mistakes. However, if you are taking reasonable cases, and you’re organised and competent you are likely to win many more than you lose. Overall, most applicants win. Creditors who use the Disputes Tribunal process regularly do so because on the whole it is effective and cheap. The system works.
Robert Finlay LL.B (Hons), M.A. (Hons) works as a Disputes Tribunal Referee.