Is the small claims court an option for your business? Well, the simple answer is – No.
There are two types of legal subjects in South African law: Natural Persons and Juristic Persons. Natural Persons are human beings (or “warm bodies”) and thus seen as legal subjects. However, Companies, Close Corporations, and Trusts for example are viewed as entities that are also considered “persons” and therefore known as Juristic Persons in our law. Juristic Persons are not permitted to file a claim in the Small Claims Court in terms of Section 7(1) of the Small Claims Courts Act 61 of 1984.
Who may turn to the Small Claims Court?
For a matter to be at the Small Claims Court, it would need to be a quantifying claim of up to R20 000 or less.
Even If your claim is over R20 000, you can abandon the exceeding amount to qualify for the use of the Small Claims Court.
However, only Natural Person may approach a Small Claims Court as stated above.
Matters That Do Not Qualify For The Small Claims Court
The following matters fall outside of the jurisdiction of the Small Claims Court:
- A claim that is above R20 000;
- any claim against the state or local municipality;
- claims based on damages, defamation, wrongful arrest, wrongful imprisonment, malicious prosecution or mental capacity; and
- claims based on a transfer of rights or based on cession.
A juristic person would need to approach an attorney to assist with instituting a claim. There are various mechanisms available to the resolution of business disputes which is not limited to the High and Magistrates Courts. In many instances tribunals, ombuds or other alternative mechanisms are available. Furthermore, in many instances, a letter demanding payment or restitution often resolves a dispute. It us therefore critical to seek professional advice and not to be deterred from pursuing your claim simply because it is a business claim or fairly small.