The Ontario Small Claims Court provides individuals and corporations with an inexpensive and expeditious way to resolve their legal disputes. Although proceedings in the Small Claims Court are less formal than those in the Ontario Superior Court, they are not without their challenges.
While self-representation is common in this court, many parties choose to retain a lawyer or a paralegal as the procedures, requirements, and deadlines imposed by the Rules of the Small Claims Court can be complicated for those unfamiliar with the legal system.
The following discussion provides a brief overview of an action in the Small Claims Court.
An important aspect of the Small Claims Court is its monetary limitation. To bring an action in this court, the amount sought in the claim must be for $25,000 or less. For claims over this amount, an action must be commenced in the Superior Court. Alternatively, one may choose to forgo any amount over $25,000 to have the action proceed in the Small Claims Court.
The only remedies the Small Claims Court can provide are an award for damages or an award for money owed. The court can also order the return of personal property (the property must be valued at $25,000 or less). Any other remedies must be pursued in the Superior Court.
Once it is determined that a matter can proceed in the Small Claims Court, the plaintiff commences the action with a Plaintiff’s Claim (Form 7A). On this form, the plaintiff must list the parties to the action, the relevant facts of the matter, and the remedy sought. Essentially, this is where the plaintiff tells its story. If the claim relies on particular documents, they should be included in the Plaintiff’s Claim as well.
Once completed, the plaintiff must have the Plaintiff’s Claim filed and issued at the court office located in, or closest to, the location where the events that gave rise to the action took place. Filing simply means to hand a copy of the claim to the court clerk along with payment of the prescribed fee. The clerk will stamp and sign a copy of the claim and assign it a court file number before returning it to the plaintiff. At this point, the court has issued the claim. Typically, the plaintiff must have the Plaintiff’s Claim issued by the court within two years of discovering the claim.
Once the Plaintiff’s Claim has been filed and issued, the plaintiff’s next step is to serve the defendant(s) listed in the claim with the document that was issued. Serving a document means to provide the document to a party in order to formally bring it to their attention. Since service is governed by a number of rules, the plaintiff will often use a third party process server to complete this step. Typically, the Plaintiff’s Claim can be served by physically leaving a copy of the issued claim with the defendant. Service must be completed within six months of the claim being issued.
The individual who served the Plaintiff’s Claim must complete an Affidavit of Service (Form 16B) to detail how service was performed. This must be filed with the court. The plaintiff will have successfully initiated a claim once this has been done.
At the moment the defendant is served, a timer begins. Assuming the defendant wishes to dispute the claim(s) made by the plaintiff (which most do), a Defence (Form 9A) must be completed. The Defence is where the defendant has the opportunity to present its side of the story. The defendant should state the facts listed in the Plaintiff’s Claim that it agrees with, the facts that it disagrees with, and any new facts pertinent to the matter.
The Defence must be served on the plaintiff within twenty days of when the Plaintiff’s Claim was served. However, in contrast to the service of the Plaintiff’s Claim, the rules for the service of the Defence are less stringent. A defendant will often affect service by simply mailing or even faxing the Defence to the plaintiff’s address or the fax number that appears on the Plaintiff’s Claim.
Thereafter, a copy of the Defence, the prescribed fee, and an Affidavit of Service detailing how service was performed must be filed with the court.
In addition to preparing a Defence, the defendant has the option to also commence a Defendant’s Claim (Form 10A). As the name suggests, a Defendant’s Claim allows a defendant to seek its own remedy against the plaintiff or against any other party connected to the claim. This must be filed with the court within twenty days of the Defence being filed. If the plaintiff wishes to dispute the Defendant’s Claim, it must also complete a Defence.
The procedures and requirements of a Defendant’s Claim are similar to a Plaintiff’s Claim (including its stringent service rules) so reference can be made to the above for more detail.
In the circumstance where a defendant does not file a Defence, the plaintiff may note the defendant in default by filing a Request to Clerk (Form 9B). By doing so, the defendant can no longer file a Defence and is deemed to admit all of the facts contained in the Plaintiff’s Claim.
Once noted in default, the plaintiff can pursue default judgment against the defendant. This is often a proceeding before the court where the damages or the money owed are established by a deputy judge and awarded to the plaintiff in the form of a judgment.
Assuming that the defendant submits a Defence, a mandatory settlement conference will be set by the court that must be attended by the parties. Fourteen days before the conference, the parties must file and serve a List of Proposed Witnesses (Form 13A) and the documents they will seek to rely on at trial.
The purpose of the settlement conference is to promote settlement between the parties before a trial date is set by the court. This conference is held before a deputy judge who may provide a non-binding opinion on the matter or may comment on the strengths and weaknesses of each party’s position. With this in mind, the parties are encouraged to seek a resolution.
It should be noted that while settlements are usually reached during or after the settlement conference, the parties can choose to settle the matter at any time during the process up to the time of trial. It is also of note that an overwhelming majority of cases settle before reaching the trial stage. Quite often, the abundance of time, effort, and money one must put into preparing for trial outweighs any potential judgment that may be awarded. This makes settling an attractive option.
Any party may offer to settle the matter at any time by serving the opposing party with an Offer to Settle (Form 14A) outlining the terms of settlement. This offer can be accepted by the receiving party by serving an Acceptance of Offer to Settle (Form 14B). If a matter proceeds to trial, whether a reasonable offer was presented will have bearing on the legal costs a deputy judge may award.
Most often, the parties will arrive at a settlement through discussion and bargaining. Once an agreement is reached, both parties can formalize the settlement by executing a Terms of Settlement (Form 14D). What is agreed upon by the parties to resolve the matter will be outlined on the form and may include payment terms, the return of property, or an acknowledgment. Some form of a full and final release is often incorporated as well. Upon filing this form with the court, the matter will be withdrawn.
If the settlement conference does not result in a settlement, the deputy judge will order that the matter may proceed to trial. As few matters actually reach this stage, this discussion will not center on this part of the process.
The deputy judge will issue a judgment at the conclusion of the trial. This will be in the form of an order which will outline the terms of the judgment.
Even though a judgment has been awarded at a trial or through a default judgment proceeding, one cannot assume that the judgment debtor (the party that must pay) will cooperate. Collecting on a judgment is often the most difficult part of the process. Accordingly, the court provides several mechanisms to assist the judgment creditor (the party that is owed) with obtaining its award, including, without limitation, debtor examinations, garnishment, writs of seizure and sale and writs of delivery.
The foregoing is meant only to be a brief overview of the Small Claims Court process. Many important elements, such as motions and appeals, are also available. As a result, the above should not be treated as legal advice and is for informational purposes only.
If you require formal legal advice concerning a Small Claims Court matter or any other civil litigation matter, you are advised to contact a lawyer.