The state government has passed responsibility for policing short-stay apartment operators to residential neighbours.
Under new laws, it will be up to neighbours to take the owners of problem apartments and their guests to VCAT.
Consumer Affairs Minister Jane Garrett says VCAT would also have new powers to award compensation of up to $2000 to neighbours and ban apartments which are repeatedly used for unruly parties.
Guests could face fines of up to $1100 for a range of conduct breaches.
The Watergate test case on the legality of short-stay apartments returned to the Supreme Court on May 18 and 19.
Lawyers representing the Watergate owners’ corporation (OC) and Docklands Executive Apartments argued about VCAT member Linda Rowland’s decision last June that OCs did not have the power to make rules limiting the length of stay.
The two-day hearing heard technical arguments for and against the ruling.
Justice Peter Riordan actively questioned both sides throughout. His decision is expected to take some months.