Consumers Association of Penang

Giving voice to the little people...since 1970

The Small Claims Courts

What if your claim does not fail under either the Consumer Claims Tribunal or the Housebuyers Tribunal, what can you do? If the sum involved is small, you can take the matter to the magistrates’ court using the small claims procedure if your claim is not more than RM5,000. You don’t need to hire a lawyer.

The small claims procedure of the magistrates’ court was set up in 1987 to help you, the cheated consumer, get cheap, easy and quick legal redress. The court can hear civil suits to recover debts or claims (for a fixed liquidated sum) not exceeding RM5,000. For the hearing, no lawyer is allowed to represent either you, the claimant, or the party you are suing, the defendant. (The exception is if the defendant is a registered company.) Only the claimant and the defendant are allowed to put their cases forward before a magistrate. The magistrate’s judgement is final and no appeal can be made to a higher court by either party unless it is on a point of law.

Filing a Claim

The following are examples of claims that can be filed in the magistrates’ court using the small claims procedure:
  •  Refund of money paid for goods which turn out to be defective;
  •  Refund of wages/salaries paid for work that has not been carried out;
  •  Claims for commissions due; and
  •  Claims for payment on services rendered, facilities supplied or repairs  undertaken.
Before you proceed with your legal action, send a final letter to the other party, threatening court action. You should set a time limit for the other party to reimburse or compensate you. If you still get nowhere with your claim, then proceed to file your case in court.

The process for making a claim is as follows:
  •  Go to the nearest magistrates’ court. See the registrar or clerk in charge and ask for Form 164 (“Summons”), which is free of charge.
  •  Fill in the form with all the particulars, including your name (as plaintiff) and address, the name and address of the person or company you are suing (the defendant), and statement of claim (the amount you are claiming from the defendant). You also have to state when and how the claim has arisen or the basis for it. Keep the particulars short and to the point.
  •  Hand the form over to the registry of that magistrates’ court and pay RM10 as fee for filing your claim.
  •  If he disputes your claim, he is required to file his defence using Form 165 (“Statement of Defence/Counterclaim”).
  •  The court will inform you and the defendant of the hearing date. (You can still withdraw your case if the defendant were to offer to settle out of court before the final hearing. Write to the defendant, accepting the offer. Send a copy of your letter to the court as well.)
  •  On that day you go to court with all the proof — relevant documents like receipts and experts’ written reports and witnesses — to support your case. You are supposed to argue out your case without the help of lawyers in front of the magistrate.
  •  After both sides have presented their case, the magistrate will pass judgement.
  •  If the defendant fails to file his defence within the period required or fails to attend the hearing, then the court may give the judgement to you, the plaintiff.
  •  If you win the case, the magistrate will award you the total of or part of your claim, depending on the judgement. You can also claim for costs not exceeding RM100.
Enforcing the judgement

Since 1991, judgements of the magistrates’ court using the small claims procedure can be easily and cheaply enforced. The guilty party could end up being arrested and jailed for not paying up.

So what do you do when the party you are suing refuses to pay up?
  •  Go back to your nearest magistrates’ court and, using Form 174 which is given free of charge, file your case in court.
  •  Then you (as a judgement creditor) can serve notice on the defendant (called the judgement debtor). You can do so personally but remember to get an acknowledgement. Or you can send the notice by A. R. registered post to the defendant’s address.
  •  The defendant will thus have to appear in court on the appointed date to show cause. This is unless he settles his debt within 10 days of receipt of the notice.
  •  In court, the magistrate has three options to deal with the defendant. He could:
    1. give the defendant more time to settle the judgement or allow payment by instalments.  
    2. order a writ of seizure and sale. This means a bailiff will assess the defendant’s goods, seize them and auction them off. The proceeds will cover the debt.
    3. order the defendant to be jailed.
  •  If the defendant does not appear in court as ordered, a warrant of arrest will be issued by the magistrate.