Small Civil Claims
The Small Claims Division is a part of the Local Court. It is designed to hear cases where the value of money or goods in dispute is less than $10,000.
The process for taking a case to the Small Claims Division is simpler, faster and less formal than other courts. On average, cases are decided in less than 6 months, and parties are strongly encouraged to settle out of court.
You can choose to represent yourself, or take a lawyer with you to court. Either way, you should get legal advice before you go.
Plaintiff- Person making the claim
Creditor- Person who is owed money
Defendant- Person defending the claim
Debtor- Person who owes the money
Magistrate- Addressed as ‘Your Honour’
Assessor- Addressed as ‘Mr/Madam Assessor’. Often cases are heard by an Assessor, rather than a Magistrate in the Small Claims Division.
Before You Think About Going to Court
Letter of Demand
If you are owed money, the first step you should take is to send a letter demanding payment. Your Letter of Demand must be signed by you, and should include:
The amount of money owed
The reason why the money is owed
The date payment is due
What further steps (eg court) will be taken if the money isn’t paid
Your contact details (name, address, business name etc)
If the debtor doesn’t pay, or doesn’t agree with the amount of money owing then an independent person known as a Mediator may be able to help with negotiations. Mediation is cheaper and faster than going to court, and the best way to reach an agreement that everyone is happy with. Usually, the courts won’t hear your case unless you have at least tried mediation first.
If an agreement can’t be reached, even with mediation, you can consider taking the matter to court.
Issues to consider
Is the amount of money worth the cost/hassle of going to court?
Is there is any way to settle out of court instead?
Can the defendant actually afford to pay?
Has it been too long? You have a maximum of 6 years to make a claim.
Starting Proceedings: Statement of Claim
To start proceedings in court you (the plaintiff) will need to fill in a Statement of Claim form, lodge it with the Local Court and pay the filing fee, and then serve it on the person or company you are suing (the defendant).
You can either pick up a copy of the Statement of Claim form from your nearest Local Court, or download a copy here: http://www.lawlink.nsw.gov.au/lawlink/spu/ll_ucpr.nsf/pages/ucpr_forms
If a lawyer is representing you in court, you will need form 3A. If you plan to represent yourself you will need to use form 3B.
To fill in the Statement of Claim you will need to know:
If the defendant is an individual: their full name and address (not a PO Box)
If the defendant is a company: the full name and Australian Company Number (ACN)
If the defendant is a business: the business’ trading name
The address of the court where you will be filing the form
The amount of debt you are owed
A description of any goods you are claiming
Dates and events relevant to your case
The amount of any interest, filing and service fees
You will need to make enough photocopies of the completed form to give one each to the court, yourself, and each of the defendants (if there is more than one).
Once the form is complete and the copies made, take them to your Local Court for filing. You will need to pay a filing fee ($90 for individuals, $180 if you are filing on behalf of a company). The court Registrar will then date and stamp the copies with the court’s official seal.
Next, you will need to deliver the defendant’s sealed copy to them. This is called ‘serving’. The rules for service are quite complicated, and if you get it wrong your case can be struck out. For more information on service, visit the Law Assist website (details below).
Finally, the person who serves the Statement of Claim on the defendant/s will need to complete an Affidavit of Service (form 41 via the link above).
If you have been served with a Statement of Claim you must respond within 28 days. If you don’t, a decision (called a ‘default judgment’) can be made against you in your absence. If you have received a Statement of Claim it is a good idea to get legal advice.
You can respond in any of the following ways:
Ask for more information
Pay the debt
File a Defence
File a Cross-Claim
All of the forms you will need can be found here:
Paying the Debt
If you choose to pay the debt in full you should notify the court that you have done so by completing a Notice of Payment (form 34 via the link above).
If you can’t afford to pay the amount in full, you can arrange for a payment plan by completing an Acknowledgment of Liquidated Claim (form 35 above).
Filing a Defence
As the name suggests, this form gives you the chance to defend yourself against the plaintiff’s claims if you don’t agree that you owe the debt.
You will need to complete form 7B via the link above, and file it with the Local Court. There is no filing fee for Defences. The court will then send a copy to the plaintiff on your behalf, as well as notifying all parties of the date the case will appear in court.
If you believe that the plaintiff actually owes you money, you can file a cross-claim. You should still file a Defence as well, to deal with the plaintiff’s initial claims.
The process and fees for filing a Statement of Cross-Claim are the same as for the Statement of Claim above, except that you will need to use form 9. Once the plaintiff (now called the ‘cross defendant’) has been served with your cross-claim they have 28 days to respond.
The Pre-Trial Hearing
The first time you go to court will be for the pre-trial hearing. Usually, this date is up to 6 weeks after the defendant has filed a Notice of Defence. All parties must attend the pre-trial hearing in person. You are allowed to bring a lawyer to represent you.
The pre-trial hearing will either be before a Magistrate (addressed as ‘your honour’) or an Assessor (addressed as ‘Mr. or Madam Assessor’).
The first section of the pre-trial hearing is called ‘conciliation’. The Court will direct all parties to go out one more time to ‘discuss the matter’ together to see if an agreement can be reached. This gives you time to:
Reach an agreement (settlement)
Deal with administrative issues:
If the value of the claims/cross-claims is more than $10,000 you can request that the matter be transferred to the General Division of the Local Court instead
If you need more time you can request an adjournment to a later date
If you can’t reach an agreement:
Ask questions and clarify anything that you don’t understand or is unclear in the other party’s claim
Exchange documents (written statements, invoices, bank statements etc)
Decide what issues and facts are in dispute
Decide whether you want to request an informal or semi-formal trial
The parties then report back to the court. If an agreement still hasn’t been reached each party will be given a chance to speak to summarise their case, and the evidence they will use at the trial. The court will then clarify the issues that are in dispute and set a date for the trial.
In the Small Claims Division, the trial is usually referred to as an ‘Assessment Hearing’. There are 2 types of trial: informal and semi-formal. Which type you have depends on the circumstances, the wishes of the parties, and the decision of the court at the pre-trial hearing.
Generally, the aim of the Small Claims Division is to keep things simple, cheap and fast. Therefore, most Assessment Hearings are informal. There are no witnesses or cross-examinations, and all evidence is presented as written statements. You must give copies of any documents you plan to use to the court and the other party 2 weeks before the trial. The documents you provide can include:
Written witness statements (including your own)
Letters, emails and text messages
File notes and memoranda
Each party is given a chance to submit their documents to the court, and to make any additional comments. The Magistrate or Assessor then looks at all of the evidence and makes a decision immediately.
In special circumstances (such as where the evidence of a witness is in dispute, or the case is quite complex) parties can request a semi-formal trial. This can take a lot longer, and your witnesses will have to be available to attend court on the day. At the trial, parties will take turns to call witnesses, and the opposing party will then have the chance to cross-examine. Once all of the witnesses have been heard, and the evidence presented the Court will make its decision immediately.
After the Assessment Hearing, the court Registrar will write to the parties to advise them of any costs and interest that have been awarded, and when they are due.
Costs are referred to as the ‘judgment debt’. If you lose the case and the Court decides that you owe money you will become known as the ‘judgment debtor’, and the person you owe money to will be the ‘judgment creditor’.
You must either pay the debt by the due date, or arrange for a payment plan. If you don’t pay, the judgment creditor can have the decision enforced by the Court who may be able to take money out of your wages or repossess your property to pay the debt.
If you lose the case, you have 28 days to appeal to the District Court. You can’t appeal just because you are unhappy with the decision. You need to be able to show that there was:
Procedural unfairness (if the court didn’t follow the proper procedure); or
Lack of jurisdiction (if the court didn’t have the power to make the decision)
If you do decide to appeal you should get legal advice.
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Freecall: 1800 300 036
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Fax: 08 8087 6765
Freecall: 1800 812 800
The Small Claims Division
Information for Defendants
Disclaimer: This information is a general guide to the law. It should not be relied on as legal advice. If you have a specific legal problem you should consult a lawyer.
It applies to people who live in, or are affected by, the law as it applies in NSW, Australia. The information contained in this publication is current at 1 January 2014.