Small Claims Court - $25,000 Limits

On January 1, 2010, the monetary jurisdiction of Small Claims Court in Ontario will be raised from $10,000 to $25,000. The limit had not changed since 2001 when it was increased from $6,000 to $10,000.

The question I have been wondering is, what will happen to cases started prior to January 1, 2010, but which claim between $10,000 and $25,000? If you start a case before Jan. 1 for $25,000, will it automatically be transferred to Small Claims Court after that date?

The answer seems to be no.

Section 23(2) of the Courts of Justice Act states:

"An action in the Superior Court of Justice may be transferred to the Small Claims Court by the local registrar of the Superior Court of Justice on requisition with the consent of all parties filed before the trial commences if,

(a) the only claim is for the payment of money or the recovery of possession of personal property; and

(b) the claim is within the jurisdiction of the Small Claims Court."

It seems that this rule will apply for transfers after January 1, 2010.

In the absence of consent among the parties, a change will require a motion to the Superior Court of Justice.

Why would a party prefer the Superior Court of Justice to the Small Claims Court? One reason would be the discovery procedures available to the parties in Superior Court which are not available in Small Claims Court, such as examinations for discovery and affidavits of documents. Small Claims Court only requires parties to produce documents upon which it intends to rely at trial and a list of proposed witnesses and other persons with information about the matter at issue. This is a significant difference.

Another reason might be the costs rules which are limited in Small Claims Court to 15% of a claim (this can be doubled if a party beats at trial its own offer to settle, in certain circumstances). Of course this is more restrictive than the costs that are available to a successful party in a Superior Court action.

The consequence to a plaintiff however for failing to transfer a proper case to the Small Claims Court may be an order that the plaintiff not receive any costs. See Rule 57.05 of the Rules of Civil Procedure.