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Small Claims Court Choice: Preferred Venue Selection Principles
Question: What advantages does the Small Claims Court offer for Plaintiffs compared to the Superior Court?
Answer: The Small Claims Court provides a streamlined and cost-effective process for resolving disputes involving claims up to $35,000. This forum allows for quicker resolutions without the complexities associated with higher courts. Denali Paralegal Services understands these benefits and is here to assist you in navigating the Small Claims Court process efficiently. Contact us today to streamline your legal journey.
Choice of Small Claims Court as Forum
Choosing to proceed in the Small Claims Court is a strategic decision available to a Plaintiffs when bringing claims that fall within the jurisdiction of the Small Claims Court. Generally, this choice allows for a simplified process, reduced costs, and faster resolution, compared to the civil litigation process for proceedings in the full Superior Court of Justice. In some circumstances, a Defendant may seek to challenge the choice of the Small Claims Court as a proper venue for the litigation. While legislation does provide a mechanism for transferring of a Small Claims Court case to the full Superior Court, such transfers are exceptional and require the moving party to meet a high onus of demonstrating that the matter is incapable of being justly resolved using Small Claims Court procedures. Understanding the principles that govern preferred venue selection, and the rarity of successful transfer motions, enables Plaintiffs to make informed decisions about forum choice at the outset of litigation.
The Law
In Ontario, the Courts of Justice Act, R.S.O. 1990, c. C.43, at section 23(1) grants the Small Claims Court with jurisdiction in cases where the monetary amount claimed is within the prescribed limit set by regulation. Furthermore, section 107(2) prescribes that a Small Claims Court proceeding shall remain in the Small Claims Court without transfer to the full Superior Court of Justice unless approved by the Plaintiff. Specifically, the Courts of Justice Act states:
Jurisdiction
23 (1) The Small Claims Court,
(a) has jurisdiction in any action for the payment of money where the amount claimed does not exceed the prescribed amount exclusive of interest and costs; and
(b) has jurisdiction in any action for the recovery of possession of personal property where the value of the property does not exceed the prescribed amount.
Transfer from Small Claims Court
107 (2) A proceeding in the Small Claims Court shall not be transferred ... to the Superior Court of Justice without the consent of the plaintiff in the proceeding in the Small Claims Court.
The case of Autometric Autobody Inc. v. High Performance Coatings Inc., 2014 ONSC 6073, emphasized the legislative intent behind the Small Claims Court as a forum for resolving civil disputes in a streamlined and accessible manner. In outlining the statutory framework, the court highlighted that the Courts of Justice Act gives significant deference to the decision of Plaintiff to proceed within the Small Claims Court, and that transfers to the Superior Court require exceptional justification. Specifically, the court said:
[6] The Small Claims Court exists to provide claimants with a forum in which claims for the payment of money or the recovery of possession of personal property which do not exceed $25,000 may be heard and determined in a “summary way” and where the court “may make such order as is considered just and agreeable to good conscience.”[1] The importance placed by the Legislature on the availability of such a summary adjudicative process for civil claims of modest amounts finds reflection in s. 107 of the Courts of Justice Act which gives great weight to the decision of the plaintiff to commence a claim within the monetary jurisdiction of the Small Claims Court. Sections 107(2) and (3) of the Courts of Justice Act provide that a Small Claims Court proceeding shall not be transferred to the Superior Court of Justice “without the consent of the plaintiff in the proceeding in the Small Claims Court” nor may a proceeding in the Small Claims Court be required to be asserted by way of counterclaim in a Superior Court proceeding “without the consent of the plaintiff in the proceeding in the Small Claims Court”.
Despite the general right held by a Plaintiff to choose the Small Claims Court forum, a Defendant may seek to transfer a Small Claims Court case to the full Superior Court of Justice for reasons such as the anticipated need for evidence discovery, the involvement of multiple or complex legal issues, or the requirement for expert evidence that is better accommodated under the procedures of the higher court. With this said, and as above, such transfers are exceptional and a Defendant who seeks to do so bears a high onus to establish that the matter is incapable of being justly and fairly resolved within the procedural framework of the Small Claims Court. In the Court of Appeal decision of Segura Mosquera v. Rogers Communications Inc., 2021 ONCA 876, the view is clearly expressed that the onus lies squarely on the moving party to justify a transfer. Specifically, the Court of Appeal said:
[12] The application judge carefully outlined the principles governing the transfer of cases from the Small Claims Court to the Superior Court. She noted that transfers are permitted only where a claim is not capable of being justly and fairly resolved using the procedures available in the Small Claims Court: Autometric Autobody Inc. v. High Performance Coatings Inc., 2014 ONSC 6073 (Div. Ct.), 328 O.A.C. 197, at paras. 9-10. She noted that the discretion to transfer should be exercised rarely: Crane Canada Co. v. Montis Sorgic Associates Inc., [2006] O.J. No. 1999 (Ont. C.A.), at para. 2. She noted that the onus is on the party seeking a transfer. Considerations in such cases include:
a) the complexity of the litigation,
b) the role and importance of pre-trial discovery and expert evidence,
c) whether the case raises issues of general importance, and
d) the desire for a just and fair determination.
Farlow v. Hospital for Sick Children, 2009 CanLII 63602 (ON SC), 100 O.R. (3d) 213 (S.C.), at para. 20, citing Crane, at para. 8, Vigna v. Toronto Stock Exchange (1998), 115 O.A.C. 393 (C.J.), and Livingston v. Ould, 2 C.P.C. 41 (Ont. S.C.).
[13] The application judge explained that the court’s discretion to transfer should be exercised sparingly because Superior Court actions expose the parties to higher costs of pre-trial discovery and trial. Further, if the application is made just before trial, it may result in duplication of work. Absent compelling reasons for a transfer, permitting a transfer may undermine the jurisdictional legitimacy of the Small Claims Court.
Conclusion
The legislative framework and case law governing transfers from the Small Claims Court to the Superior Court make clear that the choice of the Plaintiff carries substantial weight. While defendants may seek to move a proceeding to the higher court, such applications are exceptional and succeed only where the moving party meets a high onus of proving that the matter is incapable of being fairly resolved within the streamlined procedures of the Small Claims Court. By understanding the principles that protect the venue selected by the Plaintiff, parties can better assess strategic options, manage litigation costs, and ensure that the chosen forum aligns with the complexity and demands of the dispute.