Letter of Demand Before NCAT or the NSW Local Court: What to Do First

Last updated 21 October 2026 · Reviewed by the Claim Done team · Not legal advice

Short answer: in New South Wales, nothing makes a letter of demand compulsory before an NCAT consumer claim or a Local Court debt claim. But the Local Court itself suggests “sending a letter of demand”, Legal Aid NSW says it is a good idea to try to resolve the dispute before going to court, and the letter becomes evidence that you asked for your money. It often gets you paid without a filing fee. Home building, strata and retail lease disputes are different: each has a required first step.

First: is it NCAT or the Local Court?

This is the most common mistake in New South Wales. NCAT does not hear ordinary debts.

• NCAT consumer claims: a problem with goods or services you bought from a business, supplied in New South Wales, up to $100,000. The claim must be against a supplier carrying on a business, not a private person. Apply within 3 years of when the problem arose.
• NSW Local Court: money you are owed, such as an unpaid invoice, a loan, or a claim against a private person. The Small Claims Division hears claims up to $20,000; the General Division hears claims over $20,000 up to $100,000. Larger claims go to the District or Supreme Court. A debt claim must generally be started within six years of when the money became owed.

Our sample letter of demand is a New South Wales unpaid invoice, so it names the Local Court, not NCAT.

What the official guidance says before you apply

• NSW Local Court: if someone owes you money, “you can try talking to the person that owes you money or sending a letter of demand”. It encourages all parties in civil cases to try to reach an agreement without going to court.
• Legal Aid NSW: it is a good idea to try to resolve your dispute with the other party before going to court, and a letter of demand is evidence of you asking for your money back.
• Consumer claims: Legal Aid NSW says it is important to first try to resolve the dispute directly with the business. NSW Fair Trading will only take a complaint further if you have tried to resolve the problem with the business first; a Fair Trading complaint is optional before NCAT.

None of this makes a letter of demand a legal requirement for a consumer claim or a debt. It is the practical way to show you asked, in writing, for a specific amount by a specific date.

When a different first step is required

• Home building: before NCAT can accept your application, a home building dispute must first go to the government’s building dispute service (now run by Building Commission NSW, previously NSW Fair Trading), with some exceptions, for example when the time to lodge a claim runs out within 3 months.
• Strata and community schemes: mediation through NSW Fair Trading is compulsory for most disputes, and you attach the mediation certificate to your application.
• Retail leases: mediation through the NSW Small Business Commissioner is compulsory for most claims before applying to NCAT.
• Residential tenancy: a landlord or tenant can apply directly to NCAT. Most tenancy applications have short time limits, so do not delay.

What it costs if you have to apply

Fees from 1 July 2026 (standard rate for an individual):

• NCAT consumer claim: $64 for a claim of $10,000 or less, $133 for over $10,000 up to $30,000, $344 for more than $30,000. Reduced fees apply for eligible pensioners and people helped by Legal Aid or a community legal centre.
• Local Court statement of claim: $179 in the Small Claims Division, $370 in the General Division, plus a fee for each address if the court serves it by post.

Fees change each July; check before you lodge. More detail: NCAT fees 2026.

What the letter should say

Legal Aid NSW suggests the letter set out:

• the amount owed and why;
• the date by which it must be paid (14 days is usual) and how to pay;
• that you may take legal action if it is not paid, naming NCAT or the Local Court;
• that they may be liable for costs and interest.

Keep a copy, and a record of where, when and how you delivered it. Keep it calm and factual. If an apprehended violence order (AVO) protects the other person, get legal advice before you send anything.

If they ignore it

Apply to NCAT (consumer claim) or file a statement of claim in the Local Court (debt). The letter and any reply show what you asked for and when. For a debt over $10,000, the Local Court says it is best to get legal advice before starting proceedings.

When not to send another letter

• You have already sent a clear written demand with an amount and a deadline: go to the next step.
• The dispute is a home building, strata or retail lease matter: take the required first step above.
• A time limit is close, the matter is already before NCAT or a court, an AVO is involved, or there is a complex question of who is legally responsible: get advice from Legal Aid NSW, LawAccess NSW, a community legal centre or a lawyer.

Have it drafted for you

You can write the letter yourself. Or Claim Done drafts it from your answers under New South Wales law, names the right forum (NCAT or the Local Court), checks it, and emails it to the other party after you approve it. If they still do not pay, Claim Done can draft the NCAT application or the Local Court statement of claim from the same answers.

Letter of Demand: $49. NCAT application or Local Court statement of claim: $97. Nothing is sent until you approve it.

Start my letter of demand →

How your letter is drafted and checked: how Claim Done checks your document. Other states: Victoria, Queensland, and the national guide.

Questions

Do I have to send a letter of demand before NCAT or the Local Court?
No, it is not a legal requirement for a consumer claim or a debt. The Local Court suggests sending one, Legal Aid NSW recommends trying to resolve the dispute first, and the letter is evidence that you asked. Home building, strata and retail lease disputes have their own required first steps.

Can NCAT hear an unpaid invoice or a personal loan?
No. Those are debts and go to the NSW Local Court (up to $20,000 in the Small Claims Division, up to $100,000 in the General Division). NCAT consumer claims are about goods or services bought from a business.

Can I make an NCAT consumer claim against a private seller?
No. An NCAT consumer claim must be against a supplier carrying on a business. A claim against a private person goes to the Local Court.

How long should I give them to pay?
Fourteen days is usual. If nothing happens by the date in your letter, apply.

Is Claim Done a law firm?
No. Claim Done drafts documents from your answers. It does not give legal advice and does not guarantee that you will be paid.

Sources

Checked against the official pages on 21 October 2026. Fees and limits change; check the tribunal or court before you apply.

• NCAT: consumer claims
• NCAT: motor vehicle claims (claims against a business, not a private person)
• NSW Local Court: civil jurisdiction
• NSW Local Court: fees
• NCAT: fees
• Legal Aid NSW: letter of demand
• Legal Aid NSW: making a claim in NCAT
• NSW Fair Trading: talk it over
• NCAT: home building
• NCAT: strata schemes
• NCAT: retail leases