Small Claims: No Lawyers Needed!

Mindy, our beloved baker, is faced with a non-paying customer. She baked a 7-tier wedding cake, one of her proudest creations, for Bernard and his supposed wife, Clara. Unfortunately, a heated argument erupted between them on the wedding day, and Clara called the wedding off. With that, both Bernard and Clara refused to pay for the RM2,500.00 cake despite numerous requests vide letters, WhatsApp messages and calls, from Mindy.

As much as Mindy felt sorry for the wedding that did not happen, she now had to resort to legal proceedings to recoup the RM2,500.00 for the wedding cake. If she engages a lawyer, the legal fees incurred could be higher than what she is claiming. Since the claim is for a sum less than RM5,000.00, she can opt for the small claims procedure provided for in Order 93 of the Rules of Court 2012 (“RC 2012”).

Introduction & Key Features

Small claims procedure has been touted as the ‘cheap and cheerful’ manner of resolving disputes in the Courts as no legal representation is allowed (Order 93, rule 7 of the RC 2012). Hence, parties will have to represent themselves in court.

Important things to note:

• The Plaintiff must be an individual.
• The value of the subject matter or the amount in dispute must be less than RM5,000.00.
• A company or an organization can be represented by an authorized full time paid employee.*

Application (O. 93 r. 1)

(1) This Order shall have effect in proceedings in the Magistrates’ Court between an individual plaintiff and a defendant.

(2) In this Order-

“an authorized person” means-

(a) a person who is authorized by law to represent a defendant other than a solicitor; or

(b) in a case of a company or organization, a person who serves as a full time paid employee and authorized by a company or organization in which a company or organization is a party;

“plaintiff” means an individual person who is not an agent or assignee of any debt of another person.

…

No legal representation (O. 93 r. 7)

A party to any suit in this Court shall not be represented by a solicitor, except where the defendant is required by law to be represented by an authorized person.

*Order 93 Rules of Court 2012 (as amended by Rules of Court (Amendment) 2020)

Procedure

(1) Initiating the Claim

Since Mindy carried out her business as a sole proprietor, and not through a company, she could initiate a claim against Bernard and Clara using the small claims procedure. First, she will have to head to any Magistrates Court in Malaysia and obtain Form 198 (the “Writ”) from the court’s service counters.  However, the court may still require Mindy to type out the Writ, together with the necessary details. After completing the Writ, she will have to sign the Writ or thumbprint it personally. 

Then, she will have to prepare four (4) copies of the completed Form 198 and e-file it in court. Generally, the services counter will assist in scanning and e-file the Writ. Mindy will have to pay RM10.00 as the filing fee.

After filing the Writ, the court will assign it a case number and affix its seal to the Writ. Then, the court will email Mindy a copy of the sealed Writ along with a notice to attend a hearing (the “Notice”) and an affidavit of service.

(2) Service of the Writ

Now, Mindy must serve the sealed Writ, and the Notice to Bernard and Clara, either personally or by a prepaid registered post addressed to their last known address. After successful service, Mindly will have to complete the Affidavit of Service and sign it before a Commissioner for Oaths. Then, she will have to file the Affidavit of Service.

Tips: 

• Prepare a cover letter for the personal service of the sealed Writ and Notice. 
• Get the recipient to sign and acknowledge receipt of the documents. 
• If you opt for prepaid registered post, save the tracking number and print out the latest delivery status. 
• Exhibit the acknowledgement letter or the print-out in the Affidavit of Service.

(3) Defence (and Counterclaim)

After receiving the Writ, Bernard and Clara have 14 days to file their defence in Form 199. The procedure of obtaining, filing and serving Form 199 is the same as Form 198. Suppose Bernard and Clara have a counterclaim (perhaps the cake delivered by Mindy was inedible or had resulted in food poisoning). In that case, they can insert the particulars, and the amount claimed in Form 198.

Mini Scenarios:

1. Bernard and Clara admit the claim.

The court will enter a judgment against them in Form 204.

2. Bernard and Clara did not file Form 199.

The court may enter a judgment against them in Form 201 on the hearing date; or

The court may adjourn the hearing date for Bernard and Clara to file their defence.

(4) Defence to Counterclaim (if any)

If Bernard and Clara filed a Counterclaim against Mindy, Mindy may file a defence to the counterclaim in Form 200.

(5) Hearing date

Usually, the court will fix the hearing within one (1) month from the date of filing of the Writ. At the hearing, the court will assist the parties to settle the claim. If successful, the court will enter a consent judgment in Form 206.

However, if the parties failed to settle, the court may proceed to hear the case and give its decision. The court could also adjourn the hearing and provide further instructions to the parties to prepare for their case. 

Mindy ought to prepare for her case adequately before the hearing date. If she has any witnesses that she intends to call, she should make sure that they are available on the hearing date. If the witnesses are unavailable, Mindy can ask them to prepare affidavits to be used as evidence. Further, she should prepare a bundle of documents to prove her claim. 

For example:

• Purchase Order
• Delivery Order
• Pictures of the wedding cake at the wedding
• Letters sent to Bernard and Clara demanding payment for the cake
• Screenshot of the WhatsApp conversations where Mindy demanded the payment
• Call logs to show that she called them for the payment

As no lawyers represent the parties, the proceedings are less formal, and the Magistrate plays an active role to ask questions. The Magistrate will also listen to any arguments or consider any written arguments that the parties submit.

Mini scenarios

• Bernard and Clara did not show up on the hearing date.
• The court will enter a judgment in Form 202. 
• The judgment is for Mindy.
• The court will dismiss Bernard and Clara’s counterclaim (if any).
• Bernard and Clara will have to pay Mindy costs.
• Mindy did not show up on the hearing date.
• The court will enter a judgment in Form 203.
• The court will dismiss Mindy’s action, and she will have to pay Bernard and Clara costs.
• The court will give a judgment for Bernard and Clara’s counterclaim (if any).
• Mindy has a valid reason for non-appearance on the hearing date.
• Mindy can apply to set aside the judgment entered in her absence within 21 days from the service of the judgment by filing Form 205.

(6) Judgment

After the hearing, the court will enter a judgment in Form 207. The court may award costs to either party, but it will not exceed RM100.00.

If Mindy successfully obtains a judgment against Bernard and Clara, the court will serve the judgment to them via prepaid registered post (Order 93, rule 11 RC 2012).

(7) Enforcement

Bernard and Clara received the judgment but decided to pay no heed. Mindy can file a notice to show cause in Form 208 to the court and serve it to Bernard and Clara. 

The court will then examine Bernard and Clara on the reason for non-compliance of the judgment. Subsequently, the court may order a writ of seizure and sale to be issued, allow Bernard and Clara to settle the debt or pay by instalments, or commit them to prison. 

Hence, Mindy does not have to worry about the non-compliance of the judgment without further recourse. 

Conclusion

The small claims procedure is put into place to allow direct access to justice for simple and straightforward disputes. Of course, there is nothing in law which forbids individuals from being a litigant in person, even for claims exceeding RM5,000.00. However, facing an opponent in court with an army of lawyers is no easy feat.

Hence, the small claims procedure places parties on equal footing with the prohibition of legal representation.