No Costs for You!

One consequence of the increase to the jurisdiction of the Ontario Small Claims Court, from $10,000 to $25,000, is that some litigants – especially those commencing wrongful dismissal actions – are now being told that they are in the ‘wrong place, at the wrong time.’

In a decision released March 16, 2012, Shakur v. Mitchell Plastics, 2012 ONSC 1780, (the facts of which I earlier canvassed in my post titled "No finding of just cause notwithstanding workplace assault") the Honourable Justice David A. Broad held that a plaintiff who won $12,514.00 in a Superior Court action should be denied his costs because he received an amount within the jurisdiction of the Small Claims Court, notwithstanding the fact that when he commenced his case the limit of the Small Claims Court was only $10,000.

Justice Broad reasoned as follows:

Rule 57.05(1) [of the Ontario Rules of Civil Procedure] provides that if a Plaintiff recovers an amount within the monetary jurisdiction of the Small Claims Court, the court may order that the Plaintiff shall not recover any costs.

Commenting on the issue that the plaintiff had commenced the claim prior to the change in the Rules, Justice Broad held that, “There does not appear to be any exception for cases which were commenced prior to the increase in the jurisdiction of the Small Claims Court.” (Para. 3)

In reaching his decision Justice Broad cited the following passage from the decision of Justice Gray in The Toronto-Dominion Bank v Thind,2010 ONSC 6974:

The Superior Court of Justice is currently overburdened with cases. Parties should not be rewarded with costs in matters that should have been properly brought in another forum designed to handle claims of a specific magnitude or monetary value, such as the Ontario Small Claims Court.

As Justice Broad noted:

[7] As stated by Justice Gray in Toronto-Dominion Bank v Thind at para. 25, “if the plaintiff has made a deliberate decision to bring the proceedings in the Superior Court where it is clear that the Small Claims Court has jurisdiction, then, save in exceptional circumstances, the plaintiff should recover no costs.” To that statement I would add “bring or continue the proceedings.”

The implications of Justice Broad’s decision are clear: if one has a case near the borderline of $25,000, one would be prudent to commence that action in the Small Claims Court. If one has a claim that was commenced in before the 2010 Rules changes in the Superior Court for less than $25,000, then moving that case to Small Claims may also make sense.

What to do about an action commenced before 2010 that may not meet the threshold of $25,000 is a decision that should only be taken on legal advice specific to one’s actual situation.

Contact Me

To reach the author of this blog, Sean Bawden, email sbawden@kellysantini.com or call 613.238.6321 x260.

Sean P. Bawden is a partner with Kelly Santini LLP, located in Ottawa, Ontario, Canada. He practices in the areas of employment law and civil litigation. He has also taught Trial Advocacy for Paralegals and Small Claims Court Practice at Algonquin College in Ottawa.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.