The Small Claims Court Process in Ontario
The Small Claims Court Process in Ontario
The Small Claims Court process in Ontario comes with a variety of rules, procedures and forms that are necessary to understand in order to successfully navigate your claim and to avoid default proceedings. Below you will find an overview of the Small Claims Court process, answers to some common questions regarding small claims in Ontario, and the various responsibilities for Plaintiffs and Defendants at each step of the claim.
What are the Rules of Small Claims Court?
The Small Claims Court in Ontario is governed by the Rules of the Small Claims Court, O Reg 258/98. Each rule is numbered so that they are easier to follow. In this overview, you will see frequent references to these numbered rules in order to provide context for the forms that need to be filed with the court or the actions that need to be taken at each step of the Small Claims Court process.
What are the monetary limits for Small Claims Court?
Small Claims Court in Ontario will hear claims for money or personal property at a value of $35,000 or less (not including interest or costs). If you are looking to sue for an amount higher than $35,000 you will need to file your claim with the Superior Court of Justice and follow the civil litigation process instead.
What can I sue for in Small Claims Court?
In Ontario, the Small Claims Court hears claims for money owed under a variety of agreements, including unpaid accounts for goods or services, unpaid rent, and loans. Damages can also be claimed, including property damage, personal injuries, and damages for breaches of contract.
What are costs?
If you are the successful party in Small Claims Court, generally you are entitled to what are known as costs. Costs include amounts paid by you during the Small Claims Court process, including fees paid for legal advice and representation, court filing, printing, and serving documents.
There is a cap on legal fees recoverable against the other party – capped at 15% of the amount claimed, with the possibility of increasing this to 30% if a party makes an Offer to Settle which complies with Rule 14. It is very important to remember that costs are always within the discretion of the court and that their decision with respect to costs may be based on any Offers to Settle, the conduct of the parties, the complexity of the proceeding, etc. The court may ultimately decide not to order costs, or order costs of a different percentage.
Costs will only be awarded in an amount exceeding 30% of the amount claimed if the court considers it necessary in the interests of justice to penalize a party or a party’s representative for unreasonable behaviour in the proceeding.
What kind of paperwork is required?
Almost every step in Small Claims Court is associated with a particular form. Some of the forms you may be required to use in the Small Claims Court process include: Plaintiff’s Claim, Defendant’s Claim, List of Proposed Witnesses, Offer to Settle, Terms of Settlement, Summons to Witness andNotice of Default of Payment. To view a complete list of fillable electronic forms that can be printed, visit Rules of the Small Claims Court Forms.
The documents which set out the facts of the case from the perspectives of the parties are called Pleadings. Pleadings in a Small Claims Court action come in a variety of forms: Plaintiff’s Claim, Defence, Defendant’s Claim, Defence to Defendant’s Claim.
To start a case in Small Claims Court, you must draft and issue a Plaintiff’s Claim (Rule 7.01)
If the Plaintiff’s Claim is based in whole or in part on a document, a copy of the document shall be attached to each copy of the claim, unless it is unavailable, in which case the claim shall state the reason why the document is not attached. The Plaintiff’s Claim needs to include the following:
- The full names of the parties to the proceeding and, if relevant, the capacity in which they sue or are sued
- The nature of the claim, with reasonable certainty and detail, including the date, place and nature of the occurrences on which the claim is based
- The amount of the claim and the relief requested
- The name, address, telephone number, fax number (if any), and Law Society of Upper Canada registration number (if any) of the representative representing the Plaintiff or, if the Plaintiff is self-represented, the Plaintiff’s address, telephone number and fax number (if any)
- The address where the Plaintiff believes the Defendant or Defendants may be served
Plaintiff’s Claims can be filed electronically with ServiceOntario at their File small claims onlinewebsite and a fee of $95.00 is charged to issue the claim, payable to the Minister of Finance.
If a claim is issued and filed online, a paper copy must also be filed with the appropriate courthouse at least 14 days before the scheduled Settlement Conference.
Serving a Plaintiff’s Claim
After the Plaintiff’s Claim is issued, it must be served, personally or by an alternative to personal service, on each of the Defendants within 6 months of the date that the Plaintiff’s Claim was issued (Rule 8.01). The precise meaning of “personal service” depends on the nature of the entity being served. For example, an individual can be “personally served” by physically handing the Plaintiff’s Claim to them, whereas a corporation may be “personally served” by physically handing a copy to an officer or director of the corporation.
The specific requirements for effecting personal service are set out in Rule 8.02, while the alternatives to personal service are set out in Rule 8.03.
If the Plaintiff is having trouble serving one or more of the Defendants within the 6-month period, they can get permission from the court to extend the time for service by bringing a motion. The fee to bring a motion is $60.
The Plaintiff can also bring a motion for asking the court for permission to serve the Plaintiff’s Claimin a different way than the options provided for in the Rules if it is shown that it is impractical to effect prompt service of a claim by personal service or an alternative to personal service. This is called Substituted Service (Rule 8.04).
For example, if you have not been able to hand a copy of the Plaintiff’s Claim to the Defendant, but you have been corresponding with the Defendant by email or via social media, you can ask the court for permission to effect service by email or direct message. In order to bring this kind of motion, a form called Notice of Motion and Supporting Affidavit must be filled out. This is a two-part form that requires the following:
- Notice of Motion portion – tell the court what you are asking for (i.e. permission to serve the Plaintiff’s Claim by email or an extension of time to serve the Plaintiff’s Claim)
- Affidavit portion – evidence demonstrating efforts to serve and the reasons why you think that service by another method will be likely to bring the Plaintiff’s Claim to the attention of the Defendant (i.e. a copy of a recent email thread showing that the Defendant uses and responds to emails at a particular email address). This affidavit must be sworn in front of a lawyer or commissioner of oaths.
Once the Plaintiff’s Claim is served, proof of service is provided through an Affidavit of Service (Rule 8.06) and it indicates the manner and timing of service, must be sworn in front of a lawyer or commissioner of oaths, and must be filed with the court.
Filing a Defence in Small Claims Court
Once a Defendant is served with the Plaintiff’s Claim, they have 20 days to serve and file their Defence with proof of service (Rule 9.01). The Defence must state the reasons why the Defendant disputes the Plaintiff’s Claim. If a document is involved as part of the Defence, then a copy of the document shall be attached to each copy of the Defence, unless it is unavailable, in which case the Defence shall state the reason why the document is not attached.
If a Defendant does not deliver their Defence within 20 days of being served, then the Plaintiff can note that Defendant in default and commence what are known as “default proceedings” (Rule 11). Once a party is noted in default, they are no longer entitled to notice of any other step in the case.
You can note a party in default online or at the courthouse using the Request to Clerk form. If the claim is for a debt or liquidated demand (i.e. unpaid invoice, loan etc.), the clerk of the court can sign Default Judgment (Form 11B).
If the claim is for an unliquidated demand, then the matter will proceed to an Assessment of Damages hearing, which is essentially an undefended trial. The purpose of this hearing is to determine questions of fact and law, including the entitlement to and value of damages that cannot be quantified or established by receipts or invoices. This type of hearing generally occurs in cases where the Plaintiff’s case is based on work done under an oral contract. Often, expert evidence is required to prove the value of the work done.
Can the Defendant also file a claim?
If the Defendant believes that they have a claim against the Plaintiff or against another person arising out of the same transaction/occurrence relied on by the Plaintiff, they can file a Defendant’s Claim (Rule 10) within 20 days after the day the Defence is filed with the court.
The Defendant’s Claim must be issued by the court in the same way as a Plaintiff’s Claim and must also be served personally or by an alternative to personal service.
A party who wishes to dispute a Defendant’s Claim shall serve and file a Defence to the Defendant’s Claim (Rule 10.03) within 20 days of being served with the Defendant’s Claim.
The Plaintiff’s Claim and the Defendant’s Claim will be heard by the court at the same trial.
If a party does not serve and file a Defence to a Defendant’s Claim within 20 days of being served, they can be noted in default and default judgment can be sought in accordance with Rule 11.
What is a Settlement Conference?
Settlement Conferences (Rule 13) are mandatory and are automatically scheduled by the courthouse for every defended action within 90 days after the first Defence filed. They take place before a deputy judge and are designed to provide an opportunity for both parties to explain their case and to receive an opinion from that deputy judge regarding the strengths and weaknesses of their respective cases. This exercise is aimed at encouraging the parties to recognize the realities of the case, to narrow the issues in dispute, and ultimately to fully settle the matter, thereby avoiding the need to proceed to a full trial.
If the matter does not settle, a different judge than the one present at the Settlement Conference presides over the trial. Attendance at the Settlement Conference is mandatory for all parties. Furthermore, all parties are required to file a List of Proposed Witnesses, witness statements (concise summaries of the evidence that each witness is expected to give at trial) and copies of any documents that were not attached to the pleadings upon which the parties intend to rely at trial. These documents must be served on the opposing party or parties and filed with the court at least 14 days before the Settlement Conference.
If a party cannot attend in person, they can file a request to attend by teleconference by filing a Request for Telephone or Video Conference.
If a party fails to attend or fails to adequately prepare or file the necessary documents, the court can order costs against the offending party. For these reasons, it is best to talk to an experienced disputes and litigation lawyer for advice on how to ensure that you are adequately prepared. If the case does not settle at the Settlement Conference, the Deputy Judge will set a schedule for next steps which may include (Rule 13.05):
- Deadline for disclosure of further materials
- Deadline for matter to be set down for trial
- An order directing that another Settlement Conference take place
Offering to settle before trial in Small Claims Court
It is often advantageous to make an Offer to Settle (Rule 14) because it can trigger attractive costs consequences (Rule 14.07). Specifically, if a Plaintiff makes an Offer to Settle that is not accepted by the Defendant, the court may double their costs to 30% of the amount claimed if the following conditions are met:
- The Plaintiff obtains a judgment as favourable as, or more favourable, than the terms of the offer;
- The offer was made at least seven days before the trial;
- The offer was not withdrawn and did not expire before the trial
If a Defendant makes and Offer to Settle that is not accepted by the Plaintiff, inverse of the above applies.
These rules are aimed at encouraging reasonable Offers to Settle and the early resolution of disputes so that they do not have to be heard in court.
Trial (Rule 17)
If the matter does not settle at the Settlement Conference and proceeds to trial, one of the parties (usually the Plaintiff) must “set the matter down for trial.” This means that a Request to Clerk must first be filed with the court and the “set down” fee of $145.00 must be paid. The court will then send out a Notice of Trial to the parties which will state the time and date of the trial.
An action will be dismissed for delay if, by the second anniversary of the commencement of the action (i.e. when the Plaintiff’s Claim was issued):
- the action has not been disposed of by an order;
- no step has been taken by the Plaintiff to obtain default judgment; or
- a trial date has not been requested.
This means you must request default judgment (if applicable), set your matter down for trial, or request an assessment of damages hearing within 2 years of the date the Plaintiff’s Claim was issued, otherwise the court will automatically dismiss the action.
The action can be reinstated by motion, but only in very specific circumstances.
At the trial itself, evidence can come from live witnesses, documents, or a combination of both. Rule 18.02 – Written Statements, Documents, Records, states that evidence is presumptively admissible if served on opposing parties at least 30 days before the trial date. If relying on written statement or documents, you must provide opposing parties with contact information of the author. If the other parties want to cross-examine the witness, they may do so by serving a Summons to Witness (Form 18A).
When the trial is over, the court may make their decision and explain their reasoning orally the very same day that the trial takes place. Often, however, the judge will “reserve” their decision which means that they will make their decision at a later date and send it to the parties once they have done so. The decision of the trial judge is binding on the parties and must be complied with. Generally, the successful party is entitled to having a portion of their costs paid by the losing party in addition to the damages that are ordered.
Appealing a Small Claims Court decision
Appeals from a final order of the Small Claims Court are filed with the Divisional Court as long as the value of damages/property is at least $3,500 (excluding costs). If the value of the judgment is less than $3,500, there is no right to appeal. Generally, you can only appeal questions of law (i.e. when the judge makes a mistake applying the law), whereas questions of fact (i.e. who did what, when events happened, whether an event happened or not etc.) are usually not appealable.
If a party files a Notice of Appeal, then the order of the trial judge is “stayed” while the appeal is underway. This means that if the trial judge ordered the Defendant to pay the Plaintiff, they do not need to do so until the appeal is complete.
For more information on the Small Claims Court Process in Ontario, contact our litigation lawyers.
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