Small Claims Court — defending a claim

A Small Claims Court action reaches a defendant as a Plaintiff's Claim, Form 7A. From the day it is served, the defendant has 20 days to deliver a defence. Karb Law acts for defendants in those actions — the defence, any claim the defendant brings in return, the settlement conference and, where the matter does not settle, trial.

Angelina Shuster is a paralegal licensed by the Law Society of Ontario, and representation in the Small Claims Court is within a licensed paralegal's scope of practice under By-Law 4. This page is general information about procedure and is not legal advice; reading it creates no paralegal-client relationship.

How long does a defendant have to respond?

Rule 9.01 of the Rules of the Small Claims Court, O. Reg. 258/98, sets the period: a defendant who disputes a claim serves a defence in Form 9A on every other party and files it, with proof of service, with the clerk — within 20 days of being served with the claim. The defence must state the reasons the claim is disputed and attach the documents the defendant relies on, the same way the claim itself must attach the plaintiff's documents.

A defendant who agrees that part of the money is owed does not have to choose between conceding everything and disputing everything. Under rule 9.03 the defence can admit liability for all or part of the claim and propose terms of payment — an amount each month, for example. If the plaintiff does not dispute the proposal within the time the rule allows, it is treated as accepted; if the plaintiff disputes it, the terms are decided at a terms of payment hearing.

What happens if no defence is filed

Rule 11.01 allows the clerk, on proof of service, to note the defendant in default once the 20 days have passed. Under rule 11.05, a defendant noted in default cannot then file a defence or take any other step in the action without leave of the court or the plaintiff's consent — except a motion to set the default aside.

Where the claim is for a debt or a fixed sum of money, the clerk may sign default judgment without a hearing. Where the amount has to be proved, the plaintiff obtains judgment by motion or at an assessment hearing — and the defendant, having been noted in default, has no part in deciding the figure.

A default is not always final. Under rule 11.06 the court may set aside a noting in default or a default judgment, on terms, if it is satisfied that the defendant has a meritorious defence and a reasonable explanation for the default, and that the motion was brought as soon as was reasonably possible. The longer a default judgment stands, the harder the last of those conditions is to meet.

What a defence can rest on

A defence may dispute the facts — that the work was done, the goods delivered, or the agreement what the plaintiff says it was. It may dispute the amount while accepting that something is owed. And it may rest on the law:

• The limitation period. Section 4 of the Limitations Act, 2002 bars a proceeding started after the second anniversary of the day the claim was discovered. A claim issued too late can be defended on that ground alone.
• Jurisdiction. The court hears money claims up to 50,000 dollars, exclusive of interest and costs. Rule 6.02 forbids dividing one cause of action into several actions to bring it under that limit.
• The wrong defendant. A claim against an individual for a debt of a corporation, or against a business name rather than the person or company behind it, names someone who may not be liable at all.

Where a claim discloses no reasonable cause of action, or is inflammatory, a waste of time, a nuisance or an abuse of the court's process, rule 12.02 allows a motion to have it struck out or amended.

A defendant's claim

A defendant who is owed something arising out of the same events can bring a defendant's claim in Form 10A under rule 10.01 — against the plaintiff, against another defendant, or against a person not yet in the action, such as a subcontractor or a supplier who is responsible for the loss. It must be issued within 20 days after the defence is filed, or later with leave of the court. It is ordinarily tried together with the main action, and the person it is brought against has 20 days to defend it in the same way.

The settlement conference

Every defended action has a settlement conference, which rule 13.01 requires within 90 days after the first defence is filed; the only exception is a defence that admits the whole claim and proposes terms of payment. At least 14 days before it, each party serves and files the documents it will rely on at trial and a list of proposed witnesses. The conference is held before a judge or deputy judge; no evidence is given under oath, and what is said there cannot be used at trial.

The judge tries to resolve the action or narrow the issues, and may give a non-binding view of each side's position. Many defended actions end here.

Offers to settle, and what they do to costs

A defendant may serve a written offer to settle at any time. Rule 14.07 gives it a consequence if it is served at least seven days before trial: where the defendant's offer is not accepted and the plaintiff then obtains a judgment as favourable as the offer or less favourable, the court may award the defendant up to twice the costs awardable to a successful party, from the date the offer was served. Costs are otherwise limited in this court. Section 29 of the Courts of Justice Act caps an award of costs, other than disbursements, at 15 per cent of the amount claimed, unless the court considers a higher award necessary to penalize a party or a representative for unreasonable behaviour.

Trial

An action that does not resolve goes to trial before a judge or deputy judge. The plaintiff carries the burden of proving both that the defendant is liable and how much is owed. Witnesses give evidence under oath or affirmation and are cross-examined.

What representation involves

• Reading the claim against the deadline — the date of service, the 20 days that follow, and whether the claim was issued inside its limitation period.
• Drafting the defence with the reasons stated and the documents attached, or an admission with a proposal of terms of payment where part of the claim is not disputed.
• Bringing a defendant's claim against the plaintiff or a third party where the same events give rise to one.
• Moving to set aside a default where a defendant was noted in default or a default judgment was signed.
• Preparing the settlement conference — the document exchange, the witness list and a clear account of what is actually in dispute — and appearing at it.
• Serving offers to settle and appearing at trial where the action does not resolve.

Who this service is for

Enquiries generally come from a small business or a contractor sued by a customer over work or goods; from a landlord or tenant sued over a deposit or damage after a tenancy has ended; from someone served with a claim they had not expected. What is most useful at a first call is the claim itself, the date it was served, and the documents that show the other side of the story.

Where the firm is acting for the party bringing the action, the process is set out under filing a Small Claims Court claim. Disputes over the terms of an agreement are covered under contracts, civil claims within this court's limit under civil law and damages, and everything the firm takes on under practice areas.

Speaking to us

Karb Law is in Richmond Hill and acts in Small Claims Court matters across the Greater Toronto Area. Because the 20 days run from service and not from the day the claim is read, the date of service is the first thing established. You can contact the office, request a free assessment, or read about the firm and its licensed paralegal.