Ethical debt collecting procedures for the small business

[Citizen X]

Key terms

Action, defendant, plaintiff, Liquidated amount, letter of demand, simple summons, Issue of summons, service of summons, ‘Dies indutia,’ declaration, application for default judgment, application for summary judgment, section 65 enquiry, clerk of courts, sheriff, warrant of execution


The following example will be used for illustration purposes:

TZ (Pty) Ltd, is a small business, that specializes in manufacturing paint. It serves as a wholesaler of paint to other small businesses. TZ (Pty)Ltd also offers a painting service.

1. Action: There are many actions that can be brought. The focus is on the simple summons and a liquidated amount and no other action.
2. Defendant: The individual or juristic person against who the action is brought
3. Plaintiff: Person bringing the action
4. Clerk of court: The individual to whom court documents need to be filed
5. Liquidated amount: This is an amount which can be easily determined by means of simple arithmetic (If the defendant owes you R10 000 and 15 % is added as interest, this can be easily calculated). The emphasis is that the demand is described in a clear manner. This clear manner must be established by simple mathematical calculation.
6. Letter of demand: This is the first step of the action, ideally a good letter of demand should be clear and concise without any legalese, pointing to the simple fact that there will be consequences in practice should the defendant fail to comply with the demand.
7. Simple summons: This form of summons is used when the Plaintiff has a claim which can be classified as a debt or liquidated amount.(This summons is actually directed ,in writing on the summons, to the sheriff to do a particular thing)
8. Dies indutia: This means time allowed for both the plaintiff and defendant to do certain things in practice, failing which, there are potential consequences for both parties.[In particular for the benefit of the plaintiff the defendant is required to serve a notice of intention to defend within 10 working days after service of summons.
9. Issue of summons: After the summons is prepared, it must be ‘issued,’ this simply means that it must be endorsed by the clerk of courts by stamp, without which the summons has no authority whatsoever. So before the issue of the summons, the summons itself must be prepared,
10. Declaration(This is necessary where the defendant has filed a notice of intention to defend) This is the particulars of claim of the plaintiff, where it is required, by means of several averments or paragraphs, to set out the claim against the defendant
11. The Sheriff: Only the sheriff can serve the summons, this does not apply to subsequent pleadings. After the summons has been issued, this original must be taken to the sheriff, copies are made and kept for the plaintiff
12. Letter to the Sheriff: A letter addresses to the sheriff pertaining to the summons is required
13. Warrant of execution: This is a procedure that the plaintiff takes after judgment has been granted
14. Where no notice of intention is served: The option of default judgment is usually used;
15. Where a notice of intention to defend has been served but the defendant has no defence, the application for summary judgment is usually used.