The Small Claims Court
This court is frequently referred to as the people's court. Measured by unit volume of business, it is the busiest civil court in Ontario. In 2005-2006, 75,041 new proceedings were commenced in the Small Claims Court. By comparison, in the same time frame 63,251 new proceedings were commenced in the Superior Court of Justice. 10 Considering its volume of work, I heard few complaints about the Small Claims Court, including its judges and their decisions.
The Small Claims Court is hospitable to litigants who are not represented by counsel. Its procedures are straightforward. Twenty-one rules govern an action from commencement to trial and enforcement. Costs related to Small Claims Court matters are significantly lower than is the case in the Superior Court. The court is geared to, and does, dispense justice quickly.
There are limits in the Small Claims Court on the quantum of costs that may be recovered by a successful party, generally 15% of the value of the claim. In light of the court's existing monetary jurisdiction ($10,000), this means that the maximum cost exposure of an unsuccessful party to a successful party is $1,500, excluding disbursements and absent exceptional circumstances.
With four exceptions, Small Claims Court adjudicators are deputy judges. Deputy judges are lawyers appointed by the Regional Senior Judges in each region, subject to the approval of the Attorney General. There are approximately 400 deputy judges. They are paid a per diem of $232. Ontario has recently established a Deputy Judges' Remuneration Commission. I expect it will report by the end of this year and that deputy judges' remuneration will increase.
In addition to the 400 deputy judges, there are currently two full-time Small Claims Court provincial judges (both in Toronto). They are expected to retire from full-time service in September 2007 and November 2009, respectively. These two judges play an active role in the administration of the Small Claims Court. As well, there are two supernumerary provincial judges who sit on a per diem basis in Small Claims Court (one in Toronto and one in Ottawa).
The Courts of Justice Act has no provision for the appointment of provincial judges to the Small Claims Court. Thus, within a relatively short time, absent structural change, adjudication in Small Claims Court matters will all be by members of the Ontario bar – deputy judges.
The monetary jurisdiction of the Small Claims Court is prescribed by regulation under the Courts of Justice Act. 11 As of April 1, 2001, the jurisdiction of the court increased from $6,000 to its current level of $10,000.
The principal issues relating to the Small Claims Court are:
- Whether the court's monetary jurisdiction should increase and, if so, by how much.
- Whether rights of appeal from decisions of the Small Claims Court should be changed.
- Whether the on-the ground administration of the Small Claims Court can be improved.
On purely practical grounds, I have left the issue whether the Small Claims Court should be comprised exclusively of provincially appointed judges off the issues list. This is among the issues that I expect will be addressed by Ian Holloway who, at the request of the Attorney General, has conducted a review of the Small Claims Court. I understand that Mr. Holloway's report has been submitted to the ministry. It has not been released pending completion of this Review. Beyond that, as I noted in the introduction to this summary, I have tried to craft recommendations that, among other things, are implementable within a reasonable time. Thus I make no recommendation on whether the Small Claims Court bench should be provincially appointed full-time judges. I do, however, note that Ontario is not alone in having part-time, independent, non-judge Small Claims Court adjudicators.
Monetary Jurisdiction of the Small Claims Court
I think it is fair to say that there was a general consensus that the monetary jurisdiction of the Small Claims Court should be increased. To the extent that there was meaningful disagreement, it focused on the quantum of the increase. Most with whom I consulted supported an increase of the court's jurisdiction to $25,000. This is consistent with British Columbia, Alberta, the Yukon and Nova Scotia, which all have a $25,000 Small Claims Court limit. In addition, Saskatchewan has set in motion a process that will result in staged Small Claims Court limit increases to $25,000.
If the Small Claims Court monetary jurisdiction were increased to $25,000, the additional volume of cases resulting from the increase can be roughly estimated. In 2005-2006, 6,555 civil proceedings were commenced in the Superior Court of Justice for monetary amounts between $10,001 and $25,000 (1,756 between $10,001-$15,000, and another 4,799 were between $15,001-$25,000). 12 I accept that this may not fully reflect possible additional case activity. Some cases that have not been commenced in the Superior Court – due to higher court fees, the complexity of procedural rules, and the inability to be represented by an agent or paralegal in that court – may be commenced in the Small Claims Court upon an increase in its monetary jurisdiction, given the simpler and cheaper process it offers.
Significant practical problems would arise if the court's jurisdiction were increased to $25,000 immediately. Facilities would have to be expanded. Additional court staff and registrars would need to be hired. The cost of additional deputy judge per diems would have to be factored into the ministry's budget allocation, which could not be done accurately until the Deputy Judges' Remuneration Commission reports. More deputy judges would have to be appointed or the existing complement would have to allocate more of their time to Small Claims Court work. In the result, it seems clear to me that any meaningful increase in the monetary jurisdiction of the Small Claims Court should be staged.
Accompanying any monetary increase, deputy judges should also be given limited jurisdiction to grant equitable relief in relation to matters heard by the Small Claims Court. Equitable relief is different from money damages. Types of equitable relief includes court orders requiring parties to do or refrain from doing certain acts, or a court declaring the rights or duties of a party under a contract or law. Section 96(3) of the Courts of Justice Act currently precludes the granting of equitable relief by the Small Claims Court, requiring litigants to obtain such relief from the Superior Court. While this may make sense for significant equitable orders, it does not make sense in cases where the equitable relief relates to matters within the monetary jurisdiction of the court. I note that in Alberta, under its Provincial Court Act, provincial judges who preside over Small Claims Court matters have a limited power to grant equitable remedies in respect of a claim for debt, damages, return of personal property and specific performance where the value of the claim is within the monetary jurisdiction of the court. 13
Small Claims Appeal Rights
The Courts of Justice Act provides that there is no right of appeal from a Small Claims Court judgment for the payment of money less than $500 or the return of an item valued at less than $500.
If the jurisdiction of the Small Claims Court is increased to $25,000, should the monetary limit restricting appeals be raised? I think that the answer to that question is, yes.
The restriction on the right to appeal serves to provide finality for comparatively minor claims that would not be economically efficient to appeal. It also prevents an excess of lower value claims from creating caseload pressures on the Divisional Court (the appellate forum). Although no statistics are available on the monetary value of appeals from the Small Claims Court to the Divisional Court, we do know that there are relatively few appeals from the Small Claims Court (186 in 2005-06).
If the appeal restriction had been increased proportionately with the monetary jurisdiction of the Small Claims Court (currently $10,000), there would now be no right of appeal from judgments of less than $5,000. In my view, a restriction on the right of appeal from judgment less than $5,000 is excessive. However, some restriction is justified. My recommendation is that there should be no appeal from judgments less than $1,500.
Small Claims Court Administration
On the third issue, several said that the Small Claims Court could benefit from improved oversight in its on-the-ground administration. Without a judge or deputy judge administrator to oversee the scheduling of motions, trials and settlement conferences, lists are frequently open-ended and matters may not be reached. This can result in adjournments and unnecessary cost and inconvenience to litigants, those representing litigants and witnesses. When the current provincially appointed judges who assist with the administration of the Small Claims Court retire, this problem can be expected to be more acute, especially in the higher volume court locations. It seems to me that new provincially appointed Small Claims Court administrative judges or deputy judge administrators ought to play a role in greater hands-on administration of the court.
Some identified person (my preference is that that person be a deputy judge) should be in charge from an administrative standpoint. Regional Senior Judges cannot reasonably be expected to be involved in that level of administration. If appointing administrative judges or deputy judge administrators is impractical, administrative officials should be put in place to ensure that all aspects of the on-the-ground operation of the Small Claims Court run efficiently. Over time, this would result in standardized procedures for filing claims and defences, avoiding delay at that point. It would also control the length of court lists and perhaps lead to morning and afternoon lists at least for short cases.
Recommendations (Small Claims Court)
- The monetary jurisdiction of the Small Claims Court should be increased to $25,000. The increase should be staged. The court's monetary jurisdiction should be increased immediately to $15,000 with a further increase to $25,000 within two years.
- Deputy judges should also be given limited jurisdiction to grant equitable remedies in relation to matters heard by the Small Claims Court.
- If the court's monetary jurisdiction is increased to $25,000, there should be no right to appeal from a judgment of less than $1,500.
- I would make no change in the Small Claims Court costs model.
- I would urge the Office of the Chief Justice of the Superior Court, the Civil Rules Committee and the ministry, in consultation with the Law Society of Upper Canada, to consider whether a litigant should be able to be represented by an agent in Small Claims Court appeals and enforcement (contempt) matters in the Superior Court or the Divisional Court. This prospect is more palatable now that paralegals will be regulated by the Law Society. This requires an amendment to the Courts of Justice Act (s. 26), which references the Law Society Act. Amendment of Law Society by-laws may also be required.
- I recommend that Small Claims Court administrative judges be appointed by the province either on a regional basis or on a basis determined by the volume of Small Claims Court business in particular geographic areas. Short of new judicial appointments, designated Small Claims Court deputy judge administrators should be made part of the Small Claims Court picture. These judges or deputy judge administrators would be responsible for ensuring, among other things, that Small Claims Court trial and settlement conference lists were manageable, i.e., not open-ended.