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More Melton rate debtors face court

MELTON has been urged to review its hardship policy, with legal experts claiming it is among the councils most likely to sue residents for unpaid rates.
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The Federation of Community Legal Centres and Footscray Community Legal Centre called on the council to explore other options before taking ratepayers to court.

But Melton chief executive Kel Tori denied the council was too quick to sue and said it made no apology for taking debt collection action when necessary.

“This is only fair to those ratepayers who have met their obligation to pay rates,” he said.

Mr Tori said the council initiated legal action only against ratepayers who had failed to make payments or who failed to contact the council to make other arrangements.

“Council cannot assist ratepayers in financial difficulty if they don’t contact the council to advise us that they are in such difficulty,” Mr Tori said.

A total of 645 summonses demanding payment of rates were issued to ratepayers in 2011-12. Of those, 281 resulted in a judgment being entered against them. In 2010-11, there were 755 summonses issued, 380 cases of which resulted in a judgment.

“This is out of over 45,000 ratepayers in the municipality,” Mr Tori said.

No case had gone before a magistrate in the past two years, he said.

Federation of Community Legal Centres policy officer Jacqui Bell said Melton Council had one of the highest prosecution rates in Victoria.

She said ratepayers were often faced with financial hardship coupled with difficult personal circumstances.

“It seems Melton City Council is suing too quickly without first exploring other options to pay. In many cases, it seems the only winners are the debt collectors and lawyers. The council needs to adopt fairer practices.”

The federation is preparing a report on the number of councils suing ratepayers for unpaid rates and if there is a lack of regulation for financial hardship compared to other industries.

“In other sectors, such as utilities, companies are required to make sure they have explored other options before suing,” Ms Bell said. “Sectors with greater regulation sue far less regularly than the local government sector because they are obliged to explore other solutions, with court being used as the last resort.”

Footscray Community Legal Centre manager Denis Nelthorpe said councils could be doing more.

“We see a significant number of ratepayers from Melton. There are other councils with the same socioeconomic status who don’t sue anywhere near as often as Melton.”

He said councils generally used the courts for debt collection more than telecommunications and banking companies. He called for an enforceable industry code of practice.

Mount Cottrell resident Corey Bugeja said he had been faced with a rates increase of about $1000 on last year.

He said the increase had caused him great financial stress, on top of the high cost of combating noxious weeds on council land next door to where he lived.

Council’s business growth and sustainability manager, Brett Luxford, said an ongoing program to reduce noxious weeds was in place.

Melton has a hardship policy through which ratepayers can apply to enter a payment plan. A total of 142 ratepayers applied for financial hardship consideration in 2010-11 and 2011-12.