What is the monetary limit of the Ontario Small Claims Court?

 

On January 1, 2020, the monetary limit of the Ontario Small Claims Court was raised to $35,000.

 

HISTORY AND EXPLANATION OF THE MONETARY LIMIT

When Justice Matters opened for business in January 2001 the monetary jurisdiction of the Ontario Small Claims Court was $6,000.  It has since seen several dramatic increases over the years.  In April 2001 it was increased to $10,000, then to $25,000 on January 1, 2010 and then finally to $35,000 on January 1, 2020.  This has been a six-fold increase in under twenty years – well above the rate of inflation.

As the Small Claims Court is less expensive and less complex than the Superior Court the monetary increases have improved access to the justice system to many in the Province of Ontario.

The monetary jurisdiction of the Small Claims Court originates in section 23 of the Courts of Justice Act and from there by way of a regulation to the statute.  The corresponding appeal limit of the court is $3,500 meaning that only cases from that amount onward can be appealed.  Appeals of a Small Claims Court decision are heard in the Ontario Divisional Court.

 

COSTS AND INTEREST

The monetary limit of the Ontario Small Claims Court is for principal damages only.  It does not include court costs, disbursements, legal fees and interest.  For example, a person represented by a paralegal could sue for a $35,000 debt and on top of the that be awarded $392 in court costs, $100 in disbursements, $5,250 in legal fees and interest on the $35,000 at either a contract rate or the Courts of Justice Act rate.  Consequently, and especially with loans that involve a high rate of interest, a total judgment could be well in excess of $50,000.

 

CLAIMS FOR MORE THAN $35,000

If one finds themself with a claim for more than $35,000 they have two choices:

1.  They can reduce the claim to bring it within the monetary limit of the Ontario Small Claims Court. For example, if a business had $40,000 in unpaid invoices involving a single customer the $5,000 over and above the court’s limit can be waived to bring the claim down to $35,000.  The excess of $5,000 is lost and cannot be recovered in another lawsuit.

2.  The alternative is to bring the claim in the Superior Court of Justice for the full $40,000, however, given the complexities, costs and time associated with Superior Court actions it would probably be more cost effective to bring the action in the Small Claims Court for $35,000.

One thing that cannot be down, is the invoices, which represent a single cause of action based on a single account history, cannot be split into two more lawsuits for the purpose of bringing them all within the court’s monetary jurisdiction.  This is referred to as “claim splitting” and it is not allowed (see Rule 6.02 of the Rules of the Small Claims Court).

With that being said, the notion of individual causes of action can be nuanced.  For example, if a person had loaned money to a debtor by way of four separate promissory notes, each for $10,000, then the lender could bring four separate lawsuits since each promissory note represents a unique cause of action (i.e. each promissory note is a stand alone contract).

If you are uncertain as to whether you have the basis for one claim or many you may want to discuss the matter with an Ontario paralegal.