2146100 Ontario Ltd. v. 2052750 Ontario Inc. et al.

[Indexed as: 2146100 Ontario Ltd. v. 2052750 Ontario Inc.]

Ontario Reports

Ontario Superior Court of Justice, Divisional Court,

Boswell J.

April 26, 2013

115 O.R. (3d) 636 | 2013 ONSC 2483

Case Summary

Courts — Jurisdiction — Small claims court — Trial judge in Small Claims Court action finding that plaintiff owed defendant amount in excess of court's monetary jurisdiction of $25,000 and that defendant owed plaintiff lesser amount — Trial judge setting those amounts off and awarding judgment to defendant in amount of $21,538.85 — Trial judge not exceeding monetary jurisdiction of Small Claims Court — Monetary limits being restriction on amount recoverable by judgment and not on reasoning process utilized to arrive at that amount.

The plaintiff in a Small Claims Court action sought $25,000 (the monetary limit of the court's jurisdiction), and the defendant counterclaimed for the same amount. The trial judge found that the plaintiff owed the defendant $42,633.57 and that the defendant owed the plaintiff $21,094.72. The trial judge set off those amounts and awarded judgment to the defendant in the amount of $21,538.85. The plaintiff appealed, arguing that the trial judge exceeded his jurisdiction when he assessed an amount owing by the plaintiff to the defendant at greater than $25,000.

Held, the appeal should be dismissed.

Monetary limits are a restriction on the amount recoverable by judgment and not on the reasoning process utilized to arrive at that amount. It is the net judgment that matters. The net judgment in this case was within the monetary jurisdiction of the Small Claims Court.

Burkhardt Estate v. Beder, 1962 18 (SCC), [1963] S.C.R. 86, [1962] S.C.J. No. 73, 36 D.L.R. (2d) 313, 1962 CasrwellOnt 78, consd

Other cases referred to

ARS Trucking & Welding Ltd. v. Greco (c.o.b. Lo-Cost Moving & Storage), [1987] A.J. No. 931, 23 C.P.C. (2d) 95, 7 A.C.W.S. (3d) 122, 1987 CarswellAlta 354 (Q.B.); Caldwell v. Hughes, 1913 594 (ON SC), [1913] O.J. No. 929, 10 D.L.R. 788, 4 O.W.N. 1192 (S.C.); Dunbar v. Helicon Properties Ltd., 2006 25262 (ON SCDC), [2006] O.J. No. 2992, 213 O.A.C. 296, 2006 CarswellOnt 4580, 150 A.C.W.S. (3d) 375 (Div. Ct.)

Statutes referred to

Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 23, (1) (a), 111, (3) [page637]

Rules and regulations referred to

O. Reg. 626/00 (Courts of Justice Act), s. 1

APPEAL from a judgment in a Small Claims Court action.

Justin Papazian, for appellant.

Ben Hanuka, for respondent.

BOSWELL J.: —

Overview

[1] The appellant appeals from the judgment of Deputy Judge R.G. Sparks dated August 22, 2012, made in the Small Claims Court at Newmarket, Ontario.

[2] In Ontario, the Small Claims Court has jurisdiction to adjudicate claims of $25,000 or less. In this case, following a trial, the presiding deputy judge gave judgment in favour of the respondents (defendants) for $21,538.85. The appellant asserts that in the process of doing so, he exceeded the monetary jurisdiction of the court.

[3] The parties were, at one time, in business with one another. The respondents purchased a retail bedding business from the appellant and they had ongoing obligations to one another. The business relationship broke down and litigation ensued. The appellant (plaintiff) claimed $25,000 in liquidated damages. The respondents counterclaimed for liquidated damages of $25,000. The trial judge essentially took accounts between the parties. He made a factual determination that the respondents owed the appellant $21,094.72. On the other hand, he made a determination that appellant owed the respondents the sum of $42,633.57. He set the two figures off and arrived at the net judgment in favour of the respondents.

[4] The appellant asserts that the trial judge exceeded his jurisdiction when he assessed an amount owing by the appellant to the respondents at greater than $25,000. The appellant argues that the trial judge's decision effectively adjudicated the appellant's claim at $21,538.85, and adjudicated the respondents' separate claim at $42,633.57, thereby exceeding the monetary jurisdiction of the court. The appellant argues that the maximum amount the trial judge could have considered as owing to the respondents, even for set off purposes, is $25,000 and not $42,633.57.

[5] The respondents argue that the route the trial judge took to his ultimate determination is not relevant. All that matters, in terms of the court's jurisdiction, is that the net judgment be for $25,000 or less. [page638]

[6] For the reasons that follow, I agree with the position of the respondents and would dismiss the appeal.

Applicable Legislation

[7] The jurisdiction of the Small Claims Court is established by s. 23 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which provides, in part, as follows:

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.

[8] The prescribed amount referred to in s. 23(1)(a) is currently $25,000, in accordance with O. Reg. 626/00 (Courts of Justice Act). Section 1 of the Regulation provides as follows:

1(1) The maximum amount of a claim in the Small Claims Court is $25,000.

(2) The maximum amount of a claim over which a deputy judge may preside is $25,000.

Discussion

[9] The parties referred to a number of authorities in support of their respective positions.

[10] The appellant places heavy reliance on a 1987 decision from the Alberta Court of Queen's Bench, namely, ARS Trucking & Welding Ltd. v. Greco (c.o.b. Lo-Cost Moving & Storage), [1987] A.J. No. 931, 1987 CarswellAlta 354, 23 C.P.C. (2d) 95 (Q.B.). In that case, the plaintiff sued in the small claims court division of the Provincial Court of Alberta for the sum of $2,000. He claimed that he had hired the defendant to repair his vehicle. The defendant's work was defective. The plaintiff asserted that he incurred out-of-pocket expenses of $2,708 in consequence of the defective work. The monetary jurisdiction of the court was $2,000 at the time and the plaintiff accordingly limited his claim to that amount. The defendant counterclaimed for $850 for work performed on the plaintiff's vehicle.

[11] The trial judge found that the plaintiff was owed $2,708 and that the defendant was owed $850. He set off the $850 from the $2,708 and issued a net judgment in favour of the plaintiff for $1,858. On appeal to the Court of Queen's Bench, Berger J. held that the trial judge had erred in setting off the value of the counterclaim against the total charges of $2,708 instead of the claim of $2,000.

[12] Berger J. relied on a 1913 decision of the Superior Court of Ontario, Caldwell v. Hughes, 1913 594 (ON SC), [1913] O.J. No. 929, 4 O.W.N. 1192, 10 D.L.R. 788 (S.C.), [page639] where Middleton J. held that the small claims court does not have jurisdiction to set off an amount in excess of the monetary jurisdiction of the court, unless the set off has been assented to by both parties such that it constitutes, in law, a payment.

[13] The respondent pointed out that s. 111 of the Courts of Justice Act, as above, now expressly provides that a defendant may, by way of defence, claim the right to set off against the plaintiff's claim a debt owed by the plaintiff to the defendant. Subsection 111(3) expressly provides that if the court finds that a larger sum is due from the plaintiff to the defendant, than is found due from the defendant to the plaintiff, the defendant is entitled to judgment for the balance. Courts in Ontario now have the jurisdiction to calculate set-offs whether or not the parties assent.

[14] The respondents cited a number of cases in support of their position, most notably the Supreme Court's decision in Burkhardt Estate v. Beder, 1962 18 (SCC), [1963] S.C.R. 86, [1962] S.C.J. No. 73, 36 D.L.R. (2d) 313, 1962 CarswellOnt 78. In Burkhardt, the plaintiffs sued for $20,000 in damages arising from a fatal car accident involving a pedestrian. The jury assessed damages at $26,000 but found the deceased to have been 50 per cent at fault. In dispute was whether the plaintiffs were limited to 50 per cent of the amount claimed -- in other words, half of $20,000 -- or whether they were entitled to judgment for 50 per cent of $26,000 (the damages assessed by the jury).

[15] Cartwright J. found that the plaintiffs were entitled to half of the damages assessed by the jury. He held, at paras. 21-23:

. . . I wish to adopt the following passage from the reasons of Orde J.A. [from Anderson v. Parney (1930), 1930 410 (ON CA), 66 O.L.R. 112] at pp. 120 and 121:

The limit of $120 placed upon the Division Court jurisdiction in personal actions is a limit upon the amount recoverable by the judgment of that court. It is immaterial by what steps the amount due the plaintiff in respect of a single cause of action is ascertained and fixed. When so ascertained, judgment may be given thereon, but not in excess of the court's limited jurisdiction.

Rule 147 of the Ontario Rules of Practice requires that when damages are claimed the amount shall be named in the statement of claim, and the authorities are clear that judgment cannot be given for an amount greater than that claimed unless an amendment is allowed.

Adapting the words of Orde J.A. to the circumstances of the case at bar I would say: "The limit of $20,000 placed upon the general damages claimed by the plaintiff in this action is a limit upon the amount recoverable by the judgment of the Court. It is immaterial by what steps the amount due the plaintiff in respect of her cause of action is ascertained and fixed. When so ascertained, judgment may be given thereon but not in excess of the limit fixed by the amount claimed in the prayer for relief". [page640]

[16] The appellants argue that the reasoning in Burkhardt must be limited to negligence cases involving an allocation of liability through contributory negligence and that it ought not to apply to set offs or counterclaims. I do not read the decision so narrowly. In my view, it stands for the broader proposition that monetary limits are a restriction on the amount recoverable by judgment, and not on the reasoning process utilized to arrive at that amount. I consider it binding authority. Even if not binding, it is sufficiently persuasive that I conclude that ARS Trucking was wrongly decided.

[17] In terms of the case at bar, the respondents expressly set out in their defendants' claim that they were owed over $42,000 from the appellants. They limited their ultimate recovery, however, to $25,000. Whether that limit is arrived at through set-off or abandonment of any sum over and above the monetary jurisdiction of the court is immaterial in my view: see Dunbar v. Helicon Properties Ltd., 2006 25262 (ON SCDC), [2006] O.J. No. 2992, 2006 CarswellOnt 4580, 213 O.A.C. 296 (Div. Ct.).

[18] The respondents claimed a judgment of $25,000. They were awarded a judgment of $21,538.85. In my view, the process amounted to nothing more than the trial judge starting at $42,633 and making deductions for amounts owed to the plaintiff, to arrive at a net figure within the monetary jurisdiction of the court. This process is logically no different than assessing the value of a contract at $50,000, determining that $30,000 had been paid under the contract, leaving a balance owing of $20,000. There could be no doubt, in those circumstances, that the deputy judge had the jurisdiction to make a finding that the initial value of the contract was an amount in excess of the monetary limit of the court. But at the end of the day, it is the net judgment that matters. Here, the amount awarded was within the monetary jurisdiction of the Small Claims Court and did not exceed the amount claimed in the defendants' claim.

[19] In the result, the appeal is dismissed.

[20] Having said that, the parties agree that the trial judge made an error when calculating the amount owing to the appellants. By agreement, that amount is revised to $24,087.72. After adjusting for the amount found due to the respondents, the judgment is varied to provide that the respondents are owed $18,545.85.

[21] Costs are fixed, by agreement of the parties, in the sum of $7,500 and payable by the appellant.

Appeal dismissed.

End of Document