The rules concerning arbitrations are unchanged despite the move. Arbitrations are listed for matters where the monetary relief sought is under $10,000 (see s102(1) of the Magistrates' Court Act 1989 (Vic)) and there is a prohibition on exchange of court documents other than a statement of claim, defence and list of documents (see rules 2.04 and 2.05).
The procedure for arbitrations is very flexible. The Court can either adopt a formal hearing process where each party presents their case via examination-in-chief, cross-examination and re-examination, or the parties can present the evidence of the principal witness through their advocates.
The precedent for presenting cases through advocates is the unreported decision of McDonald J in Keep v Pozzebon (VSC, McDOnald Jm No 6091/94, 1 September 1994, unreported, BC9406129). At page 2 of the decision, McDonald J notes as follows:
The procedure followed in this arbitration, which the court was informed by counsel was a common proceeding followed in like cases, was that a statement was made to the magistrate by counsel for the plaintiff of the evidence of the plaintiff's principal witness, in this case Ms Trentin, following which she took an oath and confirmed that the statement made by counsel as to her evidence was true. She was then cross-examined by counsel for the appellant. The other witnesses called before the magistrate after being sworn gave their evidence-in-chief orally and were then cross-examined. The appellant was the only witnesses called on his side. He gave evidence following the same procedure as had been followed in the case of Ms Trentin.
At the conclusion of the evidence, the magistrate stated his findings and conclusions and made the orders the subject of the appeal.A party should be relying on this procedure mainly for tactical purposes. If a principal witness is unlikely to be convincing on examination-in-chief, then the party's counsel should press for the matter to be tried by the procedure in Keep v Pozzebon. If the principal witness is likely to be convincing, then the party's counsel should be pressing for evidence by examination-in-chief.
When conducting an arbitration, the Court is not bound by the rules of evidence but it is bound by the rules of natural justice (see s103 of the Magistrates' Court Act 1989 (Vic)).
Of course, not all matters under $10,000 are referred to arbitration. The Court has the discretion to order a matter to be heard and determined by the Court in the following circumstances (see s102(3) of the Magistrates' Court Act 1989 (Vic)):
(a) the complaint is not disputed; or
(b) the complaint relates to the enforcement of an order which has not been set aside; or
(c) the complaint involves complex questions of law or fact; or
(d) a question of fraud is in issue; or
(e) the parties agree that the complaint should not be referred to arbitration; or
(f) it would be unreasonable for the complaint to be referred to arbitration having regard to its subject-matter, the circumstances of the parties or the interests of any other person likely to be affected by an award under this Division.