Steps to Take When a Friend Owes You Money

Issue: How can the Small Claims Court help with inexpensively reclaiming money from a defaulter?

Here’s a question from Nobesuthu:

About a year ago, I lent my friend some money. It was in separate loans that totalled R16,500. He was supposed to return it within a week, but that week became two, three, and more. I’ll be honest: I didn’t chase the money as much as I should have because I liked him then and thought we could have had a relationship. It turned out he did not feel the same about me. Anyway, about four months after I had loaned him the money, I started seriously asking for it back. He kept making excuses all the time. It became so bad that our friendship pretty much ended after that. He now ignores my pleas for my money back and has blocked me on other platforms. It has become awkward even with mutual friends. Some have even dared to ask me to just forget about it for peace. I am thinking of just taking him to court, but I don’t know where to begin or if the money for a lawyer is even worth it. But I am so furious, and there is also just the principle of it. I didn’t even expect interest, but to date, he has not even paid me a cent. Please help. Is it wise to take him to court?

From The Legal Desk:

Thanks for your question, Nobesuthu. It’s funny how when people borrow money from you, their need is the most dire of emergencies. But when it’s time to pay it back, suddenly, you are expected to be calm and understanding. The short answer to your question, in my opinion, is yes. Yes, you should take him to court. So, with that, let’s take a look at the legals…

Considering the amount involved, I would suggest approaching the Small Claims Court (SCC), primarily because it is a legal vehicle purpose-built to offer a quicker and easier way of resolving certain civil disputes. Some relevant features of the SCC are as follows:

Generally speaking, the amount involved in matters before these courts may not exceed R20,000.¹
Legal representation is not allowed, so you cannot have an attorney representing you.
No cross-examination of witnesses is allowed. Instead, the presiding officer proceeds inquisitorially (in other words, by asking questions) to establish the relevant facts.² Cross-examination is basically when you interrogate any witness that the respondent (your friend) may bring with him.
There is no appeal against the judgments of the SCC. Once the presiding officer makes their decision, it is final.³ You may, however, apply for a review of the decision in certain circumstances.⁴ I’ll note those circumstances later in the response.

As for the actual procedure, the first step you need to take is to write a letter of demand to your friend. According to section 7 of the Rules Regulating Matters In Respect Of The Small Claims Court (SCC Rules), the letter of demand must contain the following information:

It must state what happened, i.e., how he ended up owing you the money. You must also include the date(s) you loaned him the money and mention how much you would like him to pay back.
You must prove through an affidavit or by a registered post receipt that the letter of demand was delivered to your friend.

In your letter of demand, you must state that you are giving him 14 days (or more if you’re feeling generous) to repay you or contact you to make payment arrangements.

In the event that he still does not take any steps to pay you back, you will need to issue him a summons. Per section 3(1) of the SCC Rules, you must approach the clerk of the court to issue a summons. A summons is a legal document issued by a court requiring an individual’s presence to address a legal matter. It must be served on the defendant not less than 10 days before the date of the hearing. The clerk at the SCC will guide you through the whole process. As detailed in section 16 of the SCC Rules, on the date of the hearing, you and (hopefully) your friend will have to furnish the court with proof that the summons was served on the defendant.

Remember I mentioned that you can apply for a review if you are unsatisfied with the outcome? Well, should you wish to do so, you would need to apply to the High Court. The review of the proceedings referred will only be made on one or more of the following grounds:

(a) absence of jurisdiction of the court;
(b) interest in the cause, bias, malice, or the commission of an offence referred to in section 46(b) of the SCC Act by the commissioner; or
(c) gross irregularity with regard to the proceedings.

I hope I have given you some direction to enable you to get started. The SCC is usually located in your local magistrate’s office. If you need to find the SCC in your area, you can check the website of the Department of Justice and Constitutional Development. All the best.

Written by Theo Tembo