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The Small Claims Court Process in Ontario

There are a number of rules that guide how the Small Claims Court process on Ontario works. This Court presents an assortment of rules, procedures and forms that are crucial in order to be successful in pursuing your claim. This will greatly reduce enduring any costly default proceedings. Listed below is an overview of the Small Claims Court process, including answers to some commonly asked questions concerning small claims in Ontario, and the various responsibilities for Plaintiffs and Defendants at each stage of the claim filed.

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 to allow a better understanding and make them easier to follow. There are frequent references to these numbered rules in the summary below. This will offer a framework for the forms needed to be filed with the court and the activities that need to be taken at each step of the Small Claims Court process.

The Monetary Limits for the Small Claims Court

Claims at the Small Claims Court in Ontario can be heard for money or personal assets at a value of $35,000 or less (not including interest or costs). If the claim you are seeking in your suit is higher than $35,000, the claim must be filed with the Superior Court of Justice and follow the civil litigation process instead. Paralegals, like myself, cannot represent any action at the Superior Court of Justice and a lawyer may need to be consulted at that point.

Suing in Small Claims Court

The Small Claims Court of Ontario rules on 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.

For Employment-related dismissals, terminations and constructive dismissal, you can present your case to be heard at the Small Claims Court of Ontario as long as the claim does not exceed $35,000.00. In cases like this, a trained and licensed paralegal like myself is a much more affordable option to pursue claims in this court. There are not usually numerous days of hearings and the evidence needed is less complicated than at higher courts.

The other alternative to seeking relief from the Small Claims Court is to file a claim in regards to the Employment Standards Act of Ontario. This claim is filed through the Ministry of Labour. There are advantages and disadvantages either to pursuing the Small Claims Court or through the ESA. It is best to consult a professional before initiating either option. Please contact me for legal advice.

An employee covered by the ESA, cannot file a claim with the Ministry of Labour in two situations:

1. When an employee is represented by a trade union

2. When an employee has filed a claim in a court of law

Awarded Costs

As the successful litigant in Small Claims Court, you may qualify for what is referred to as costs. Costs can include expenses paid by you during the Small Claims Court process, comprising of fees paid for legal advice and representation, court filing, printing, and serving documents.

Costs for legal fees recovered from the other party are capped at 15% of the amount claimed. As well, there is the chance that this cap increased to 30% if a party makes an Offer to Settle which fulfils the terms in Rule 14. Awarded costs are at all times within the discretion of the court and that decision may be based on a number of things including Offers to Settle, the conduct of the parties, the complexity of the proceeding, and other criteria laid out in the rules and guidelines. In the end, the court may eventually choose not to order costs, or order costs of a different percentage.

Paperwork Required

At almost every step in Small Claims Court, a particular form is needed to be processed to keep the claim in effect. Some of the mandatory forms you will use in the Small Claims Court process include:

1. Plaintiff’s Claim

2. Defendant’s Claim

3. List of Proposed Witnesses

4. Offer to Settle

5. Terms of Settlement

6. Summons to Witness

7. Notice of Default of Payment.

Contact me to see a comprehensive list of fillable electronic forms that can be printed, check out.

Pleadings

Pleadings are the documents that lay out the facts of the legal proceedings from the perspectives of each of the parties involved in the case. These pleadings in a Small Claims Court action arise in a variety of forms:

1. Plaintiff’s Claim

2. Defence

3. Defendant’s Claim

4. Defence to Defendant’s Claim.

1. Plaintiff’s Claim

A plaintiff must draft and issue a Plaintiff’s Claim (Rule 7.01) to start a case in Small Claims Court.

When filing, the Plaintiff’s Claim must include all relevant documents completely or in part, and a copy of the document shall be attached to each copy of the claim. If it is unavailable, the claim must declare the reason why the document has not been attached. The Plaintiff’s Claim needs to include the following:

1. The full names of the parties to the legal action and, if applicable, the scope in which they sue or are sued

2. The nature of the claim, including all necessary and relevant details, highlighting the date, place and essence of the events on which the claim is founded

3. The sum of the claim and the relief demanded

4. The Plaintiff’s Representative’s name, address, telephone number, fax number (if any), and Law Society of Ontario registration number. 

5. The last known address where the Plaintiff believes the Defendant or Defendants may be served.

Plaintiff’s Claims can be filed electronically with Service Ontario at their File small claims online website and a fee of $95.00 is charged to issue the claim, payable to the Minister of Finance.

When a claim is issued and filed online, you are obliged to file a paper copy with the applicable courthouse at least 14 days before the scheduled Settlement Conference.

a. Serving a Plaintiff’s Claim

Once a Plaintiff’s Claim is issued by the courts, it must be served, personally or by a substitute to personal service, separately to each of the Defendants within 6 months of the date when the Plaintiff’s Claim was issued (Rule 8.01). The detailed significance of “personal service” is contingent on who or what is being severed. An individual can be “personally served” by actually handing the Plaintiff’s Claim to them. On the other hand, a corporation can be “personally served” by physically handing a copy to an officer or director of the corporation

There are very specific requirements for implementing personal service and are set out in Rule 8.02, while the alternatives to personal service are set out in Rule 8.03. It is important that these, like all the rules listed, be followed or it can negate your case.

b. Motions in Serving the Claim

The Plaintiff may need to bring a motion asking the court for authorization to serve the Plaintiff’s Claim that differs from the options laid out the Rules, especially if it is unrealistic to effect prompt service of a claim by personal service or an alternative to personal service. This is referred to as Substituted Service (Rule 8.04). This may result in you having to fill out and file a Notice of Motion and Supporting Affidavit. This is a two-part form that requires the following:

1. Notice of Motion portion alerts the court as to what you are asking for

2. Affidavit portion is evidence that demonstrates your efforts to serve and the reasons why you believe service by another method will be more successful in brining the Plaintiff’s Claim to the attention of the Defendant.

As with all affidavits, this affidavit must be sworn in front of a lawyer or commissioner of oaths. As a licensed paralegal and notary public, I am authorized to take attestations.

It is imperative that proof of service is provided through an Affidavit of Service (Rule 8.06) and it specifies the method and timing of service, must be sworn in front of a lawyer or commissioner of oaths, and must be filed with the court.

2. Filing a Defence in Small Claims Court

After a Defendant is legally served the Plaintiff’s Claim, they have 20 days to serve and file their Defence with proof of service (Rule 9.01). The Defence must declare the details why the Defendant disagrees with the Plaintiff’s Claim. If there is a document involved as part of the Defence, a copy of the document shall be attached to each copy of the Defence, unless unavailable. In that case, the Defence will list the reason(s) why the document is not attached.

If the Defendant does not provide their Defence within 20 days of being served, then the Plaintiff may note that Defendant is in default and start “default proceedings” (Rule 11). After a party is noted in default, they are no longer entitled to and will not receive notice of any other step in the case.

Noting a party in default can be done online or at the courthouse using the Request to Clerk form. When 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).

Claims for unliquidated demands proceed to an Assessment of Damages hearing. This is referred to as an undefended trial. This hearing will determine questions of fact and law, including the right to and value of damages that, for whatever reason, cannot be computed or established by receipts or invoices. These hearing usually occur in cases where the Plaintiff’s case is based on work done under the guise of an oral contract. In these situations, expert evidence is often required to demonstrate the value of the work completed.

3. The Defendant may also File a Claim

When the Defendant ascertains they have a claim against the Plaintiff or against another party stemming 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 be served personally or by an alternative to personal service.

4. Defence to the Defendant’s Claim

In the event that a party wishes to challenge a Defendant’s Claim, they 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.

When a party does not serve and file a Defence to a Defendant’s Claim within 20 days of being served, they most likely will be noted in default and default judgment can be pursued in accordance with Rule 11.

Settlement Conference

Settlement Conferences (Rule 13) are a very vital part of the small claims process. They are mandatory and are automatically booked by the courthouse for every contested action within 90 days after the first Defence filed. This process takes place in front of a deputy judge and are intended to offer a chance for all parties to explain their case and to obtain an opinion from that deputy judge concerning the strengths and weaknesses of their particular cases. This will encourage the participants to be aware of the actualities of the case, to narrow the issues in dispute, and eventually to fully resolve the matter, thus avoiding the need to continue with a full and sometimes costly trial.

If no settlement is reached, a different judge, other than the one who chaired over the Settlement Conference, presides over the trial. Mandatory attendance for all parties is required at the Settlement Conference. Additionally, all parties are obligated to present the following:

1. List of Proposed Witnesses

2. Witness statements that contain detailed and accurate summaries of the evidence that each witness is anticipated to give at trial)

3. Copies of any documents that were not provided and attached to the pleadings upon which the parties intend to rely at trial.

All of these documents are required to be served on the opposing party or parties and submitted to the court at least 14 days before the commencement of the Settlement Conference.

If one of the parties fails to attend, sufficiently prepare, or submit the required documents, the court may order costs against the offending party. It is critically important that you discuss these matters with a qualified representative. This will ensure that you sufficiently prepare for the case, including meeting all forms, documents and evidentiary requirements while meeting the rules and procedures. If there is no resolve to the case or it does not settle at the Settlement Conference, the Deputy Judge will set a schedule for next steps that may include (Rule 13.05):

1. Deadline for disclosure of further materials

2. Deadline for matter to be set down for trial

3. An order directing that another Settlement Conference take place

4. Offering to settle before trial in Small Claims Court

Each party is encouraged to make an Offer to Settle (Rule 14). This offer can elicit attractive costs consequences (Rule 14.07). If a Plaintiff makes an Offer to Settle that is not agreed to by the Defendant, the court can double their costs to 30% of the amount claimed if the following conditions are met:

1. The Plaintiff obtains a judgment as favourable as, or more favourable, than the terms of the offer;

2. The offer was made at least seven days before the trial;

3. The offer was not withdrawn and did not expire before the trial

4. If a Defendant makes and Offer to Settle that is not accepted by the Plaintiff, inverse of the above applies.

These rules are designed to encourage reasonable Offers to Settle and lead to the early resolution of claims filed so that the parties do not have to proceed to trial, causing increased costs and time on both parties and the court system.

Trial (Rule 17)

If the parties are not able to settle the dispute at the Settlement Conference, they will proceed to trial. One of the parties (usually the Plaintiff) must “set the matter down for trial.” This involves initiating a Request to Clerk to be filed with the court and the “set down” fee of $145.00 must be paid. The court will then follows this up by sending out a Notice of Trial to the parties. This notice will include the time and date of the trial.

This Request to Clerk must be filed by the second anniversary of the instigation of the action (i.e. when the Plaintiff’s Claim was issued) if:

1. The action has not been disposed of by an order;

2. No step has been taken by the Plaintiff to obtain default judgment; or

3. A trial date has not been requested.

You must either 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 is a costly and difficult task based on very specific circumstances.

Once at the trial, evidence can be presented in the form of live witnesses, documents, or a combination of both. Rule 18.02. Any Written Statements, Documents, and/or Records, must be served on opposing parties at least 30 days before the trial date in order for that evidence to be notionally admissible. When depending on written statement or documents, you must afford opposing parties the contact information of the author. This will allow the other parties to cross-examine the witness, if the chose. They may do this by serving a Summons to Witness (Form 18A).

At the conclusion of the trial, the court could render their decision and explain their reasoning orally the very same day. Typically, though, the judge will “reserve” their verdict, 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 made by the trial judge is binding on the parties and must be fulfilled. Normally, the wining party is eligible for a portion of their costs paid by the losing party in addition to any damages that have been awarded.

Appealing a Small Claims Court decision

If not satisfied by the decision, any party to a matter may appeal a final order of the Small Claims Court. These appeals are filed with the Divisional Court. The matter must have a value of damages/property of at least $3,500 (not including costs). When that value less than $3,500, there is no right to appeal. Typically, you may 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.

When a party files a Notice of Appeal, the order of the trial judge is “stayed” while the appeal is underway. Subsequently any orders by the trial judge for the Defendant to pay the Plaintiff are not in force until the appeal is complete.

For more information on the Small Claims Court Process in Ontario, please contact me.

Disclaimer - nothing contained in this document is intended to establish Paralegal-Client Relationship/Confidential Information.