Small Claims in NSW

If someone owes you money, goods or payment for work up to $20,000, your claim is usually dealt with in the Small Claims Division of the NSW Local Court.
The process starts with a statement of claim. The other party then has 28 days to respond. If they do nothing, you may be able to apply for default judgment.
If the claim is defended, the court holds a pre-trial review to try to settle the matter before any hearing.
Proceedings are deliberately informal. The strict rules of evidence do not apply, and most evidence is given in writing.
Time limits apply. A claim to recover a debt must generally be started within six years, and shorter limits can apply in other situations.
Caspian Legal assists clients in Hornsby and surrounding Upper North Shore suburbs with small claims, debt recovery and Local Court civil disputes. Call 02 7264 3200 to discuss your options.

This article applies to civil claims in New South Wales, primarily under the Local Court Act 2007 (NSW), the Civil Procedure Act 2005 (NSW) and the Local Court Rules 2009 (NSW). It is general information only and is not legal advice.

Owed Money and Not Sure What to Do Next?

Chasing an unpaid invoice, a loan that was never repaid, a bond or deposit that was kept, or compensation for damaged property can be stressful, especially when phone calls and reminder emails are being ignored. The good news is that NSW has a court process designed specifically for smaller disputes, and it is built so that ordinary people and small businesses can use it.

If you are in Hornsby or the Upper North Shore and are thinking about starting or defending a small claim, you can book a consultation with Caspian Legal before you file anything. Getting the claim right at the start often saves time, filing fees and frustration later. Call 02 7264 3200 or visit caspianlegal.com.au.

What Is a Small Claim in NSW?

In NSW, a small claim is a civil claim for money, goods, or work and materials valued at up to $20,000. These claims are heard in the Small Claims Division of the Local Court under section 29(1)(b) of the Local Court Act 2007 (NSW).

The Small Claims Division is intentionally less formal than other courts. Under section 35 of the Local Court Act 2007 (NSW), proceedings are conducted with as little formality and technicality as possible, the rules of evidence do not apply, and there is a presumption against cross-examining witnesses. In practice, this means most evidence is presented through written statements and documents rather than live testimony.

Which Court or Tribunal Hears Your Claim?

The right forum depends mainly on the amount claimed and the nature of the dispute.

Amount / dispute type	Forum	Notes
Up to $20,000	Local Court, Small Claims Division	Informal procedure; rules of evidence do not apply; costs recovery is limited
Over $20,000 and up to $100,000	Local Court, General Division	Formal procedure; rules of evidence apply; costs generally follow the event
Over $100,000	District Court or Supreme Court	Higher courts with formal procedure; obtain legal advice before filing
Consumer claims about goods or services	NCAT (Consumer and Commercial Division)	NCAT can hear consumer claims up to $100,000; different time limits apply

Some disputes can be brought in more than one forum. For example, a consumer dispute with a supplier may be able to go to either the Local Court or NCAT, and the better option depends on the facts, the remedies sought and the applicable time limits. You should obtain legal advice if you are unsure where to file.

Common Types of Small Claims

Unpaid invoices for goods supplied or services performed
Personal loans between friends, family members or business associates that have not been repaid
Payment disputes between tradespeople and customers
Property damage, including minor motor vehicle accident damage
Deposits or bonds that have not been returned
Goods paid for but never delivered, or delivered damaged or incomplete

How to Make a Small Claim: Step by Step

Try to resolve the dispute first. Send a clear letter of demand setting out what is owed, why, and a deadline for payment. Many disputes settle at this stage, and a letter of demand also shows the court you acted reasonably.
Check the time limit. A claim to recover a debt must generally be started within six years from when the money became owing, the last repayment was made, or the debt was last acknowledged in writing, whichever is latest. If you are close to a time limit, obtain legal advice immediately.
Identify the correct defendant. Claims must name the correct legal person, whether an individual, a company, a partnership or a sole trader. Naming the wrong party can result in the claim being dismissed or the judgment being unenforceable.
Prepare and file a statement of claim. This form tells the court and the defendant who you are claiming against, how much, and why. It can be filed at a Local Court registry or through the NSW Online Registry. A filing fee applies.
Serve the statement of claim on the defendant. Strict service rules apply. Individuals are usually served personally or by post in accordance with the rules, and companies are typically served at their registered office.
Wait for the defendant’s response. The defendant has 28 days from service to pay the claim, file a defence, or file an acknowledgment. If the defendant does nothing, you may apply for default judgment without a hearing.
Attend the pre-trial review if a defence is filed. A registrar will help both parties explore settlement. If the matter does not settle, the registrar gives directions about written statements and lists the matter for hearing.
Attend the hearing. A magistrate or assessor decides the matter on the balance of probabilities, usually based on the written statements and documents, with brief oral submissions.

Key Terms Explained

Term	Plain-English meaning
Statement of claim	The court form that starts a civil case. It sets out who owes what and why.
Defence	The form a defendant files to dispute some or all of the claim, with reasons.
Default judgment	A judgment entered in the plaintiff’s favour when the defendant does not respond within 28 days of service.
Pre-trial review	The first court date in a defended small claim, where a registrar helps the parties try to settle and gives directions for hearing.
Assessor	A court-appointed decision-maker who can hear and determine small claims in the same way as a magistrate.
Judgment debt	The amount the court orders one party to pay the other.
Garnishee order	An enforcement order directing a third party, such as an employer or bank, to pay money from wages or an account towards a judgment debt.
Writ for levy of property	An enforcement order allowing the sheriff to seize and sell the judgment debtor’s property to satisfy the debt.

Time Limits That May Apply

Time limits are strict, and starting a claim out of time can mean losing the right to recover altogether. The table below is a general guide only.

Situation	General time limit	Source
Recovering a debt or damages for breach of contract	6 years	Limitation Act 1969 (NSW)
Responding to a statement of claim after service	28 days	Uniform Civil Procedure Rules 2005 (NSW)
Consumer claim in NCAT	3 years from when the cause of action accrued	Fair Trading Act 1987 (NSW)
Appealing a Small Claims Division decision	28 days, on limited grounds only	Local Court Act 2007 (NSW)

Different or shorter limits can apply depending on the type of claim, and there are exceptions in both directions. Confirm the time limit that applies to your specific situation before relying on any general figure.

What Does a Small Claim Cost?

You will need to pay a court filing fee when you lodge a statement of claim, and further fees may apply for enforcement steps. Fees are set by regulation and are adjusted from time to time, so check the current fee schedule on the NSW Online Registry or with the Local Court registry before filing.

An important feature of the Small Claims Division is that the legal costs a successful party can recover from the other side are capped at modest fixed amounts. This keeps the process low-risk, but it also means that even if you win, you will usually bear most of your own legal costs. For many clients, the most cost-effective approach is targeted advice at key stages, such as before filing, before the pre-trial review, and when preparing written statements, rather than full representation throughout.

What If the Other Party Still Does Not Pay?

A judgment is not automatic payment. If the judgment debtor does not pay, enforcement options through the court include a garnishee order against wages or bank accounts, a writ for levy of property authorising the sheriff to seize goods, an examination notice or order requiring the debtor to disclose their financial position, and, in some cases, bankruptcy or company winding-up proceedings for larger judgment debts. Each option has its own costs, requirements and practical limitations, and the right choice depends on what is known about the debtor’s assets and income.

Defending a Small Claim

If you have been served with a statement of claim, do not ignore it. You generally have 28 days to respond. If you dispute the claim, you can file a defence setting out your reasons. If you partly agree, you may be able to pay part and defend the balance, or propose a payment arrangement. If you believe the plaintiff actually owes you money, you may be able to file a cross-claim, although this can add complexity and cost, so obtain advice first. Ignoring the claim risks a default judgment being entered against you, which can affect your credit record and lead to enforcement action.

Documents to Prepare

Whether you are making or defending a claim, gather the following before you get advice or file anything:

Any written contract, quote, purchase order or terms of trade
Invoices, receipts, bank statements and proof of payments made or missed
Text messages, emails and letters about the debt or dispute
Photographs of any damaged property or defective work
Your letter of demand and any response received
Any court documents you have been served with, including the statement of claim
Notes of key conversations, with dates, made as close to the time as possible

What Not to Do

Do not ignore a statement of claim. Doing nothing usually leads to default judgment against you.
Do not miss the 28-day deadline to respond, or leave filing your own claim until the limitation period is almost expired.
Do not guess the correct defendant. Check company and business name details before filing.
Do not inflate the claim or include amounts you cannot support with documents.
Do not communicate with the other party in an aggressive or threatening way. Correspondence often ends up in evidence.
Do not assume winning means being paid. Consider whether the other party can actually pay before spending money on proceedings.

Common Mistakes and Myths

Myth or mistake	The reality
I need a lawyer to appear for me in a small claim	The division is designed for self-represented parties, and many people run their own claims. Targeted legal advice at key stages is often more valuable than full representation.
If I win, the other side pays all my legal costs	Costs recovery in the Small Claims Division is capped at modest fixed amounts. Most parties bear the bulk of their own costs.
The court will collect the money for me	Enforcement is a separate step that the judgment creditor must initiate, with its own forms and fees.
I can file first and sort out the details later	Errors in the claim amount or the defendant’s identity can be fatal to the claim or the judgment. Get the details right before filing.
Small claims decisions can always be appealed	Appeal rights from the Small Claims Division are very limited, generally confined to lack of jurisdiction or denial of procedural fairness.

Small Claims Help in Hornsby and the Upper North Shore

For residents and businesses in Hornsby, Waitara, Asquith, Wahroonga, Thornleigh, Pennant Hills and surrounding suburbs, small claims matters are commonly listed at Hornsby Local Court, with some matters also dealt with at other Sydney registries depending on where proceedings are commenced. Filing can be done online through the NSW Online Registry, so you can usually start a claim without attending a registry in person.

Caspian Legal is based at 22–28 Edgeworth David Avenue, Hornsby NSW 2077, a short distance from Hornsby Local Court. We assist clients across the Upper North Shore with letters of demand, preparing and reviewing statements of claim and defences, pre-trial review strategy, written statements for hearing, and enforcement of judgments.

What Happens in Your First Consultation

In an initial consultation we review your documents, identify the correct parties and the amount genuinely recoverable, check the applicable time limits, and explain your options, including negotiation, a letter of demand, filing in the Local Court or NCAT, or defending a claim served on you. You leave with a clear picture of the likely steps, costs and practical risks, so you can decide how to proceed. We can explain your options; we do not promise outcomes, because every matter depends on its own facts.

Frequently Asked Questions

How much can I claim in the Small Claims Division?

Up to $20,000. Claims above that amount, up to $100,000, are dealt with in the General Division of the Local Court, and larger claims go to the District Court or Supreme Court.

Do I need a lawyer for a small claim?

No. The division is designed so that people can represent themselves. However, advice before filing, before the pre-trial review, or when preparing written statements can significantly improve how your case is presented and help you avoid procedural errors.

How long do I have to start a claim?

For most debts and contract claims, six years from when the money became owing, the last repayment, or the last written acknowledgment of the debt, whichever is latest. Other claim types can have different limits, so confirm the limit for your situation early.

What happens if the other party ignores the statement of claim?

If no defence or response is filed within 28 days of service, you can usually apply for default judgment, which is a judgment in your favour without a hearing. The other party can apply to set a default judgment aside in some circumstances.

Will I have to give evidence in person?

Usually not. The rules of evidence do not apply in the Small Claims Division, and there is a presumption against cross-examination. Evidence is generally given through written statements and documents, with the magistrate or assessor asking questions if needed.

Can I recover my legal costs if I win?

Only to a limited extent. Costs in the Small Claims Division are capped at fixed amounts that are usually well below actual legal costs. Factor this into your decision about how much legal help to engage.

What if my claim is worth more than $20,000?

It belongs in the General Division of the Local Court (up to $100,000) or a higher court. The procedure there is more formal, the rules of evidence apply, and costs consequences are more significant, so legal advice is strongly recommended.

Should I go to the Local Court or NCAT?

If your dispute is a consumer claim about goods or services supplied by a business, NCAT may be an option, and it can hear consumer claims up to $100,000. NCAT has a shorter three-year time limit for consumer claims, and the orders available differ from court remedies. The better forum depends on your circumstances, so obtain advice before filing.

Get Advice Before You File

A small claim is winnable or defensible on its paperwork long before anyone reaches a courtroom. If you are owed money, have received a statement of claim, or want to understand your options, contact Caspian Legal to discuss your matter before taking the next step.

Phone: 02 7264 3200
Address: 22–28 Edgeworth David Avenue, Hornsby NSW 2077
Website: caspianlegal.com.au
Book a consultation through our website or leave a review at g.page/r/CYig8LJ260Y7EB0/review

Time limits may apply to your claim. Acting early preserves your options.