VCAT Enforcement Stay: When a Reopening Application Delays Collection

A Stay Does Not Happen Automatically

One of the most common misconceptions in Victorian enforcement is that a debtor who files for a rehearing or an appeal automatically stops the creditor from enforcing the VCAT order. That is not how it works.

Under the Victorian Civil and Administrative Tribunal Act 1998 (Vic), filing a section 120 reopening application, a section 120A variation application, or a section 148 appeal on a question of law does not automatically stay enforcement. The VCAT order remains fully enforceable unless the tribunal or a court explicitly grants a stay of execution as a separate order.

This distinction matters enormously. A debtor who waves a rehearing application at you and claims you cannot enforce is wrong — unless they can produce a written stay order alongside it.

What Triggers a Stay

A stay of enforcement can come from three sources:

VCAT itself — When a debtor applies to reopen under section 120 (non-attendance at the original hearing, within 14 days of learning about the order) or to vary under section 120A (changed circumstances, enforcement difficulty), they can ask VCAT to stay enforcement pending the outcome. VCAT grants the stay at its discretion, weighing the strength of the application against the prejudice to the creditor.

The Magistrates' Court — Once the VCAT order is registered in the Magistrates' Court, the debtor can apply to that court for a stay. Separately, section 9 of the Judgment Debt Recovery Act 1984 (Vic) stays enforcement while an instalment order is in force and the debtor complies with it; filing an instalment-order application alone does not trigger a stay.

The Supreme Court — If the debtor appeals the VCAT order on a question of law under section 148, they can apply to the Supreme Court for an interim stay pending the appeal. The Supreme Court considers the prospects of the appeal and the balance of convenience.

VCAT Section 120 Reopening Applications

Form 46B is a Magistrates' Court rehearing form, not a VCAT application. A debtor seeking to reopen a VCAT order under section 120 uses VCAT's Application to Reopen an Order and may separately ask VCAT for a stay.

The VCAT reopening application must meet these criteria:

• It must be filed within 14 days of the debtor becoming aware of the order (not 14 days from the order date)
• The debtor must show a reasonable excuse for not attending and not being represented
• The debtor must have a reasonable case to argue about the subject of the order
• Hearing and determining the application must not cause prejudice to another party

VCAT considers the application against these criteria. If it is unsuccessful, the original order remains in place. If it is successful, the original order is suspended pending a further hearing, where it may be confirmed, varied, or set aside.

What to Do as a Creditor When a Stay Is Granted

If VCAT or a court grants a stay, all enforcement activity must stop. You cannot serve new summonses, execute warrants, or pursue garnishee orders until the stay is lifted. Proceeding in breach of a stay order is contempt of court.

However, a stay does not extinguish the debt. Penalty interest at 10% per annum under the Penalty Interest Rates Act 1983 (Vic) continues accruing on the outstanding balance during the stay period. When the stay is eventually lifted — either because the rehearing fails or the appeal is dismissed — the full debt plus all accumulated interest and costs becomes immediately enforceable.

Practical steps while a stay is in effect:

• Keep records current. Continue tracking penalty interest accrual so your figures are ready when enforcement resumes.
• Monitor the reopening timeline. VCAT notifies all parties when and where to attend. Contact VCAT if you need to confirm the listing details.
• Do not destroy evidence. Maintain all your service records, Form 6A affidavits, and correspondence.

What to Do When No Stay Exists

If the debtor tells you they have filed for a rehearing but cannot produce a stay order, you are legally entitled to continue enforcement. Filing a section 120 application does not pause enforcement on its own — the debtor must separately obtain a stay.

That said, proceeding aggressively while aware of a genuine rehearing application carries a tactical risk: if the original order is ultimately set aside, you may be ordered to pay costs associated with enforcement steps taken after you knew about the application. Weigh the strength of the debtor's rehearing grounds before deciding.

For frivolous or clearly tactical rehearing applications — filed months after the debtor knew about the order, or with no arguable defence — continuing enforcement is usually the right call.

The Instalment Order Stay Is Different

Do not confuse a VCAT stay with the enforcement stay under the Judgment Debt Recovery Act 1984. Section 9 stays enforcement while an instalment order is in force and the debtor complies with it. Filing or serving the application does not itself stop enforcement; if no order is made, enforcement may continue unless a separate stay applies.

See our post on instalment orders in Victoria for the full procedure and how to object.

Our Enforcing a VCAT Order in Victoria guide maps out every scenario where enforcement can be delayed or paused, with an enforcement timeline tracker that helps you maintain momentum through stays, rehearing applications, and instalment order interruptions.

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