|
Small Claims Court (Ontario) Legal Guide
(20 June 2021)
Chapter 8 - Pleadings- Overview
(a) Overview
(b) Standard of Pleadings and Mungo Bear
- Principles of Pleading
(a) Overview
(b) Style of Cause
(c) Sample Claim
(d) Plead in Simple Sentences
(e) Plead Allegations as Though They are Facts
(f) Plead Only "Material" Facts
(g) Plead Law Briefly
(h) Do Not Anticipate Things Not Yet Raised
(i) Pleading "in the Alternative"
(j) Do Not Plead Details of Evidence Unless Material
(k) Plead Chronologically
(l) Pleading Bad Faith Behaviour
(m) Citing Statutory Law
(n) Pleading Damages
. Types of Damages
. Structuring Damage Pleadings
(o) Identity Parties by Their Full Names
(p) Plead Facts Supporting Venue
- Claim
(a) Issuance, Filing and Service of Claim
(b) Contents of Claim
(c) Electronic Issuance of Claim
- Defence
(a) Filing and Service of Defence
(b) Contents of Defence
(c) Admission of Liability and Proposal for Payment
(d) Debt Set-off as Defence to Debt Claim
(e) "Contribution" as a Defence in Negligence
- Defendant's Claim
(a) Overview
(b) Issuing, Filing and Serving a Defendant's Claim
(c) Contents of a Defendant's Claim
(d) Defence to a Defendant's Claim
(e) Where Main Action Dismissed for Delay
- Replies
- Amendment of Pleadings and Motions to Dismiss
(a) Overview
(b) Amendment of Party's Own Pleadings
(c) Motions to Amend or Strike Pleadings for Cause
(d) Motions for Dismiss, Judgment or Stay of
Proceedings
(e) "Repair" When Pleadings Struck or Dismissed
- Pleadings Publically Available
________________________________________
1. Overview
(a) Overview
"Pleadings" are the main documents, particularly the Claim and the Defence, that identify the parties and define the issues at stake in a lawsuit. Their primary purpose is to set out the factual allegations that the party hopes to prove (or defeat), to briefly state the legal basis of the claim (or defence), and to set out the remedy sought (typically, monetary damages). They are exchanged between the parties by way of "service" (see Ch.6 "Service of Documents").
The Rules of Small Claims Court identify the following main forms of pleadings:- Plaintiff's Claim
- Defence
- Defendant's Claim
- Defence to Defendant's Claim
These are a simplified version of the forms of pleadings that are used in the main Ontario trial court, the Superior Court of Ontario. For those familiar with higher court practice, a "Defendant's Claim" includes what are otherwise known as counter-claims, cross-claims and third party claims. These terms are discussed below as they are useful for understanding the function of Defendant's Claims.
Of course, pleadings (especially Claims) must name the correct parti/es and in the correct manner in the "style of cause" (the heading on most lawsuit documents). Issues of distinguishing "legal" versus "business" names, and obtaining judgments which name the people behind sole proprietorships and partnerships can be confusing (see Ch.4: "Parties").
Pleadings may be filed jointly (ie. in one document) by multiple plaintiffs or multiple defendants, but this should only be done where the interests of the parties are not likely to conflict.
Where and how to serve documents on parties (ie. addresses, etc) is covered in the chapter: "Service".
(b) Standard of Pleadings and Mungo Bear
The standard applied to the form of pleadings in Small Claims court is very forgiving. The Divisional Court [936464 Ontario Limited cob as Plumbhouse Plumbing & Heating v Mungo Bear Limited 74 OR (3d) 45 (Ont Div Ct, 2003], which hears appeals from Small Claims cases, stated the following when dealing with a case where a plaintiff had not "pleaded" (ie. set out in their Claim) a legal remedy which was required in the case: The higher standards of pleading in the Superior Court are simply unworkable in the Small Claims Court, where litigants are routinely unrepresented, and where legal concepts such as the many varieties of causes of action are completely foreign to the parties. Essentially, the litigants present a set of facts to the deputy judge, and it is left to the deputy judge to determine the legal issues that emerge from those facts and bring his or her legal expertise to bear in resolving those issues. This passage was quoted with approval by the Divisional Court in Dhillon v. PM Management Systems Inc. (Div Ct, 2014).
The court in Mungo Bear continued to adopt the following passage from Judge Green of the Newfoundland Court of Appeal in Popular Shoe Store Ltd v Simoni, [1998] NJ #57 (QL): A Small Claims Court judge has a duty, on being presented with facts that fall broadly within the umbrella of the circumstances described in the Statement of Claim, to determine whether those facts constitute a cause of action known to the law, regardless of whether it can be said that the claimant, as a [page57] matter of pleading, has asserted that or any other particular cause of action. Subject to considerations of fairness and surprise to the other side, if a cause of action has been established, the appropriate remedy, within the subject-matter jurisdiction of the court, ought to be granted. Since Mungo Bear there have been several additional higher court considerations of the same issue in various circumstances and with varying results:- Hydro One Networks v Yakeley (Ont Div Ct, 2010) was an interesting case where the small claims deputy-judge, later supported by the Divisional Court on appeal, applied a defence of set-off in favour of the defendant even though it was not pleaded. The defendant was sued by the hydro company for a contractual fee (apparently for inspection) in relation to ensuring that the defendant's house could be moved without risk to hydro lines that it had to pass under. Due to neglect on the part of the plaintiff to advise the defendant that such a move would not be possible during warmer weather (when wires sag), the defendant incurred $80,000 in additional expenses in removing and replacing the building's roof to accomodate the lower clearance. The Divisional Court cited CJA s.25 and Mungo Bear case in support of the lower court's decision to wipe out the plaintiff's $8,763 claim on the basis of this much higher loss. At the time of the lower court decision the court's monetary jurisdiction was only $10,000.
- In Jogendra v Campbell (Ont Div Ct, 2011), the court allowed the defendant to argue the expiration of a limitation period in defence, despite it's not having been pleaded, when the facts on which it was based were pleaded:
[39] This defence is available even though it was not pleaded in the statement of defence, because the statement of claim is such that it is clear from the statement of claim that the limitation period has expired. - In Kulman v Elio (Ont Div Ct, 2009). where the Small Claims trial court awarded more than was claimed by the plaintiffs in their pleadings, the court lowered the damages award to the amount claimed.
- In Martinek v Dojc (Ont Div Ct, 2011) the court allowed an appeal in a defamation case where the trial deputy-judge had applied the principle of qualified privilege despite it's not having been pleaded or argued. The court cited this passage from Brighton Heating (below) with approval:
[15] In Brighton Heating & Air Conditioning Ltd. v. Savoia et al. 2006 CanLII 1667 (ON SCDC), (2006), 79 O.R. (3d) 386 (Div. Ct.), Quinn J. concluded that the trial judge had unfairly awarded a form of relief that had not been pleaded. In that case, the deputy judge raised the applicability of a particular statute for the first time during closing arguments at trial. Although the agent for the appellant objected, the deputy judge concluded that legal obligations arose from the statute ?regardless whether or not it is pleaded? and on this basis the deputy judge awarded judgment against the appellant.
[16] Justice Quinn made the following observations at para. 40:I agree with the proposition that, in the Small Claims Court, a liberal, non-technical approach should be taken to pleadings. Therefore, unpled relief may be granted (and an unpled defence allowed) so long as supporting evidence is not needed beyond what was adduced at trial, or what reasonably should have been adduced, in support of the relief (or defence) that was pled; and, of course, provided that, in all of the circumstances, it is not unfair to grant such relief (or allow such a defence). [17] The Divisional Court allowed the appeal as the defendant had not had an opportunity to respond to issues raised by the trial judge. Quinn J. concluded on the facts of that case that the unfairness raised to the level of a ?substantial wrong of miscarriage of justice? (para. 45), and a new trial was ordered to provide the appellant the opportunity to properly respond to the argument.
[18] I conclude that the Brighton principles apply to the facts of this case. The trial judge disposed of the case on the basis of the defence of qualified privilege, which was not pleaded or raised by the defence and was not discussed during submissions. The appellant had no opportunity to call evidence of malice to rebut the defence, if it in fact applied. - In Elliott v Ritins International Inc (Ont Div Ct, 2008) judgment was overturned on appeal despite the relaxed approach to pleadings in small claims court proceedings, were judgment was issued against a person who was not named as a formal party to the litigation - even though they were the principle of the defendant corporation.
- In Ha et all v Arista Homes (Ont Div Ct, 2011) [paras 19-26] the court dismissed the appellant's argument that the judgment was in error by including grounds and relief not pleaded in the Claim, reasoning that the relaxed approach to Small Claims Court pleadings and (in this case) appended evidence documentation which made it clear that the grounds and relief were plainly at issue in the trial, combined to defeat the appellant's argument.
- Welch v Quast (Div Ct, 2021)
That said, the Divisional Court in Brighton Heating & Air v Savoia (Ont Div Ct, 2006) has tempered this robust pleadings approach where the evidence adduced at trial did not fully explore the issues relating to an unpleaded cause of action (there a trust claim) which the trial court had applied against the defendant. The higher court, in reversing the trial judgment, found a "substantial wrong or miscarriage of justice" in the fact that the defendant was effectively denied the right to call evidence on the 'new' issue. The court stated: I agree with the proposition that, in the Small Claims Court, a liberal, non-technical approach should be taken to pleadings ... Therefore, unpled relief may be granted (and an unpled defence allowed) so long as supporting evidence is not needed beyond what was adduced trial, or what reasonably should have been adduced, in support of the relief (or defence) that was pled; and, of course, provided that, in all of the circumstances, it is not unfair to grant such relief (or allow such a defence). Similarly in Discount et al v Griffiths (Ont Div Ct, 2010) the plaintiff car rental company, on learning that the defendant renter had allowed a third party to drive the rented vehicle in violation of the lease terms, sought to rely on that fact at trial. The trial deputy-judge refused to allow them to do so, saying that such a fact should have been pleaded. The Divisional Court commented that not allowing the plaintiff to argue this newly-discovered fact are trial was holding small claims court pleadings to an 'unworkable' standard.
In the case of Cresswell-Jones v. Segouin (About the House Home Inspection) (Div Ct, 2013), the court restated what seems to be the dominant theme in the case law:[57] Based on a reading of Respondents’ Statement of Claim, the Deputy Judge was correct in finding that there were sufficient material facts pleaded to put the Appellant on notice that the tort of negligent misrepresentation was a live issue to the Respondents. In Small Claims Court it is not necessary to specifically plead specific legal principles to put the Appellant on notice. ... In Potter v Double H. Construction Ltd. (Div Ct, 2015), the court stated as follows on these issues:[21] In Small Claims Court (where claimants are often unrepresented) a liberal, non-technical approach should be taken to the pleadings to ensure that access to proper adjudication of claims is not prevented on a technicality. The court has a duty, on being presented with facts that fall broadly within the umbrella of the circumstances described in the Statement of Claim, to determine whether those facts constitute a cause of action. However, if the case takes a turn completely different from that disclosed or inferentially referenced in the Statement of Claim, thereby causing prejudice to the other side in being able to properly prepare for or respond, the court may decline to give relief or allow further time to respond (Popular Shoe Store Ltd. v. Simoni (1998), 1998 CanLII 18099 (NL CA), 24 C.P.C. (4th) 10 (Nfld.C.A.)).
[22] The Small Claims Court can grant relief that was not pleaded, but they should do so only if supporting evidence is not needed beyond what was adduced at trial in support of the relief, and, in all of the circumstances, it is not unfair to grant such relief (Salamon v. Toronto, [2011] O.J. No.6251 (Ont.Div.Ct.) and Brighton Heating & Air Conditioning Ltd. v. Savoie, 2006 CanLII 1667 (ON SCDC), [2006] O.J. No.250 (Ont.Div.Ct.)).
2. Principles of Pleading
(a) Overview
The content and purposes of the different types of pleadings are discussed below. However there are some unstated general principles of pleading that the courts have evolved and adopted as useful in the tricky and demanding task of resolving disputes.
While compliance with these principles will improve the quality of your claim and case, the court (as noted above re: Mungo Bear) is quite lenient and forgiving as to what it will accept as a filed Claim document. However, poorly drafted documents will add to everyone's confusion and may require the party to correct or clarify things later - which will increase cost and delay - and in some cases jeopardize rights.
The actual forms used for the various types of pleadings are linked from the main menu, and print-outs of those are accepted by the court. Most local courts will allow printing or typographical errors in filling out forms to be corrected by hand (ie. deletion, addition and initialling) by the party submitting the form. If you need more room than is provided on the form, simply add pages, refer to them from the form, and staple them to the back of the form - on all copies.
(b) Style of Cause
The "style of cause" of any court document is a fancy name for the statement of the parties, so that the court knows who they are, and in what capacity they are parties. This is an early consideration in commencing a legal proceeding.
If there are so many parties that additional pages are required to list them all, Form 1A: Additional Parties may be used [R1.06(3)].
Below are examples of how various parties are named in court documents. Unfamiliar terms are explained more fully in Ch.4: "Parties". The parties named before the "v" (for "versus" are always the plaintiffs, although in the case of a Defendant's Claim (see below) this is reversed.
(i) Simple:
John Harris Doe
v
Jane Melissa Smith
(ii) Plaintiff under Disability represented by litigation guardian:
John Harris Doe,
a person under disability, by their litigation
guardian, Harry Simpson Knowles
v
Jane Melissa Smith
(iii) Defendant under Disability unrepresented by litigation guardian
John Harris Doe
v
Jane Melissa Smith, a person under disability
(iv) Sole Proprietor Not Using Business Name
John Hartley Doe
v
Jane Melissa Smith, sole proprietor
(v) Sole Proprietor Using Business Name
John Hartley Doe
v
Jane Melissa Smith, Sole Proprietor
cob Jane's Metal Fabrication
(* "cob" stands for "carrying on business as")
(vi) Partnership Not Using Business Name
Smith Bradly and Smiley,
a partnership
(OR a limited partnership)
(OR a limited liability partnership)
v
Jane Melissa Smith
(vii) Partnership Using Business Name
Smith Bradly and Smiley,
a partnership
(OR a limited partnership)
(OR a limited liability partnership)
cob Jenkin's Bakery Products
v
Jane Melissa Smith
(viii) Corporation
Doe Bakery Products Inc.
v
Jane Melissa Smith
(ix) Corporation Using Business Name
Doe Bakery Products Inc.
cob Jenkin's Bakery Products
v
Jane Melissa Smith
(x) Trusts
John Harris Doe
v
Jane Melissa Smith,
in her capacity as trustee of the Nancy
Mayfield Support Trust
(xi) Trustee Named in both Trust and Personal Capacities
Nancy Mayfield
v
Jane Melissa Smith,
in her capacity as trustee of the Nancy
Mayfield Support Trust
and
Jane Melissa Smith, in her personal
capacity
(xii) Multiple Plaintiffs/Defendants
John Harris Doe, Helen Constance Bruce, Keith
Zeus Magnusson and Ferdinand Carlos Fidel
Cortez
v
Jane Melissa Smith
(xiii) Defendant's Claim
Jane Melissa Smith, plaintiff by way of
Defendant's Claim
v
John Doe,
defendant by Defendant's Claim
Other situations may arise, and sometimes you don't have all the information you might like to have. Don't obsess about following these examples exactly - particularly if you are up against a time limit or a limitation period (these are different things) (see Ch.7: "Time Limits") or some other practical time pressure. Just do the best you can (and review Ch.4: "Parties" carefully). The key is that the part/ies' names should be set out as fully as possible and that the capacit/ies in which they are made party to the proceeding should be specified clearly. The purpose here is to inform the court as best you can as to who is involved, how - and to get a judgment that is enforceable.
There are also procedures useful to compel a partnership and proprietorship to provide information about who is behind the firm or business names [R5.04,R5.06(2)]. As well, government registries exist which may be searched to determine who or what is behind a business name, a firm name, a corporation, etc - these are all discussed in the chapter: "Parties".
(c) Sample Claim
Here's an example of a simple Claim pleading which illustrates some basic principles:
Joe's Wholesale Inc., Plaintiff
v
Sally Gordon, cob Sally's Market Garden, Defendent
CLAIM
- Joe's Wholesale Inc. (hereinafter "JW") is an Ontario business corporation operating as a retail food wholesaler in the City of Toronto.
- Sally's Market Garden (hereinafter "SMG") is the business name of Sally Gordon, a sole proprietor operating a fruit and vegetable market garden operation based in Newmarket.
- JW and SMG at all material times were parties to a contract between themselves for the supply of good quality fruit and vegetable produce from SMG to JW.
- On or about the middle of May 2005, JW:
(a) purchased,
(b) paid for, and
(c) took delivery of,
1000 cartons of pre-crated tomatoes from SMG at a price of $20.00 per carton.
- At the time of purchase, the tomatoes where spoiled and unmarketable.
- JW unknowingly re-sold and delivered the 1000 cartons of spoiled pre-crated tomatoes to it's customers at a price of $30.00 per carton.
- JW's customers returned the product, requiring JW to refund the purchase price to them in full, which was done.
- This caused JW a loss of $20,000 for the purchase of the spoiled produce, loss of profit of $10,000 on the lost sale, and damage to JW's commercial reputation amongst these and other customers in the community, resulting in future loss of profit.
- By supplying the spoiled produce to JW, SMG breached the terms of the contract between them.
- SMG should have known, or in the alternative did know, that the produce was spoiled and should not have sold it to JW, and by so doing was negligent.
- JW claims against SMG for breach of contract.
- JW claims against SMG for negligence.
- JW claims against SMG in the amount of:
(a) $20,000 general pecuniary damages for monies paid for spoiled product;
(b) $10,000 general pecuniary damages for loss of profit on sale of spoiled product,
(c) $20,000 general pecuniary damages for future loss of profit,
(d) $634.17 special and liquidated (past pecuniary) damages for expenses incurred,
(e) pre-judgment interest,
(f) legal costs and disbursements,
(g) such other remedy as the court sees as just.
- The events and transactions which constitute the cause of action predominantly took place within the territorial division of this Honourable Court.
- JW abandons the amount of any resultant damage award over $25,000.
(d) Plead in Simple Sentences
Sentences in a pleading that are likely to be disputed should be so simple that they cannot be split into further sentences. Paragraph 2 above could be further split, but the subject of the sentence is probably uncontentious and as such may be tolerated. Paragraphs 3-7 and 9 are important pivotal fact allegations and should be stated as simple as possible so any disagreement with them is plain. Clause 4, using (a), (b) and (c) separators, is an example of another way of breaking statements up into separate statements, allowing agreement with one but not the others.
In the Superior Court, a first part of a Defence would be three paragraphs listing (by numbers) which Claim allegations the Defendant agrees with, which are denied, and which the defendant has "no knowledge" of. While this style of pleading is not required in Small Claims court, it can be used and if done properly makes life easier for everyone.
As well, once you are in court the simple-sentence rule allows the court and parties to refer to "para. X", with all parties knowing exactly what is being referred to and not having to clarify "what part of para. X?". Use your judgment and common sense.
(e) Plead Allegations as Though They are Facts
The most important purpose of pleadings is to set out what facts the parties intends to prove at trial. However it is not necessary to preface every para. with "the plaintiff will prove at trial that ...." - this is assumed.
For example: para. 9 reads as though the case had been argued and the judge concluded that "By supplying the spoiled produce to JW, SMG breached the contract between them". In pleadings this is fine and is the accepted style.
(f) Plead Only "Material" Facts
"Material" is a term that lawyers use to identify things that are essential to the case, so as to cut down on excess information. "Material facts" are those that - if accepted as true by the court - are alone sufficient to establish the cause of action. "Cause of action" is the legal basis of a claim, for example "breach of contract", "negligence", "assault", etc.
Review the sample pleading above - see how stripped down and stark this style is. It doesn't state that the SMG delivery driver was named "Fred", that he arrived at 2:30pm, that the crates weighed 30 lbs each, that payment was made by cheque, or that the latin name of the fungus that spoiled the tomatoes was "alternaria solani" - these are all peripheral matters most of which are unlikely to be contentious at trial. Some of these unmentioned facts will be proven (for instance the payment by cheque when the cancelled cheques are put into evidence, or maybe photos of the spoiled tomatoes), but at the pleading stage we just want a concise overview of the case which is sufficient - if accepted as true - to establish the cause of action claimed.
Use your common sense. What really causes judges to shake their heads in frustration are excessive pleadings which are disorganized, unchronological, include evidence ("Fred said that ..."), argument ("he lied then and he's lying now") and irrelevant character attacks ("and two years before he kicked my dog"). Your time for all this - IF it's relevant - is at trial.
(g) Plead Law Briefly
Plead only conclusions of law and pertinent legal points - and even then only briefly.
Note para. 9 above: "By supplying the spoiled produce to JW, SMG breached the contract between them." If the material facts leading up to that statement are included already, that is a perfectly acceptable legal pleading.
In unusual cases you might want to refer to a specific legal principle that applies. For instance, SMG may argue that this unfortunate matter is already settled between the parties, and may allege in their Defence that:- JW, as a condition of SMG re-commencing commercial dealings with SMG, has agreed to waive any claims relating to the transactions set out in the Claim.
- JW and SMG have since re-commenced commercial dealings as before.
- JW is now therefore barred from advancing such claims (* this is called an "estoppel").
(h) Do Not Anticipate Things Not Yet Raised
If you are a plaintiff and expect the defendant to raise a specific defence, for example: limitations or a missed notice of some kind - wait for them to do it. Do not argue in your Claim against something you think might come in a Defence.
Lawyers call this "negativing exceptions" or pleading "conditions precedent". It wastes judicial time and it risks giving the other side ideas that they might not have come up with themselves.
If the other side makes such allegations in their Defence it will be assumed that you deny them at trial. (see the discussion of "Replies" below). Be ready to dispute them at that time.
(i) Pleading "in the Alternative"
In para. 10 the plaintiff is asserting two inconsistent things: firstly that SMG "should have known" that the produce was bad, and then that they "did know" -which is it?
At the commencement of the action the plaintiff JW doesn't know what SMG knew and when they knew it, but they want to cover all possibilities that assist their case. It is alright to plead inconsistent facts as long as they are done "in the alternative" like this. If the plaintiff is unable to prove the first alternative allegation, they can fall back on the other.
Pleading in the alternative is fine when the party doing it has no way of clarifying the uncertainty. However if the defendant pleads "I didn't know the tomatoes where bad, but - in the alternative - if I did know, there was still no loss of profit" - is going to look silly and lose credibility.
(j) Do Not Plead Details of Evidence Unless Material
This is similar to the material fact rule (above).
Inexperienced litigators, anxious to justify themselves, often feel a strong need to over-explain or "argue" all their evidence in the written pleadings. It's like their trying to convince the judge with the pleading itself. Someone doing this might quote from letters, contracts and statements which they expect to be able to prove at trial.
This is not the purpose of pleadings, which are just to set the framework of the issues in the case. Do not plead details of evidence unless they are key to the case. For instance, in a defamation action it would be alright to plead that "The Defendant employer repeatedly called me a "shithead" in front of my co-workers."
That said, note the Small Claims Court requirement (see below) to include -separately - with the Claim, a copy of any document upon which the claim is based [R7.01(2)(2)]. The most common example of this would be a copy of any written contract, which can simply be stapled to the Claim.
(k) Plead Chronologically
You are telling a story. Don't confuse your audience by jumping around in time. Start at the beginning and finish at the end.
(l) Pleading Bad Faith Behaviour
An exception to the rule about sparse pleadings is when allegations of "fraud, misrepresentation, breach of trust, malice or intent" are made. In these unusual cases you are expected to give more detail.
However, when you make such allegations, these must be more to them than just "not liking" the other side or viewing them as unethical (which would probably include all cases). There must be an actual cause of action involving these allegations (such as "fraud" or "conspiracy to injury", and they must be supported by material allegations. You are expected to be more detailed when making such claims. But even when faced with this sort of situation you shouldn't psychoanalyse the other side on paper. Just address times, places, statements and events with more detail.
(m) Citing Statutory Law
It is common (and useful) practice when a party intends to rely on specific legal provisions contained in a statute or regulation to expressly cite these in the pleading. This informs the court and the other parties so that they can review the law.
A typical such reference might read: eg. 7. The defendant pleads and relies on s.111 of the Courts of Justice Act, as amended. This is telling the court that the defendant intends to reduce the amount of any debt award against it by debts the plaintiff owes it, which is allowed under s.111 "by way of ... set-off".)
Statutes and regulations are linked from the Home page under "Source Law".
(n) Pleading Damages
. Overview
Pleading "damages" (almost always the remedy sought in Small Claims court - see Ch.3: "Jurisdiction"), is trickier than it should be. The terminology used to categorize damages types is surprisingly unclear. Luckily in Small Claims court judges are quite forgiving on the issue given that the parties are often self-represented.
Properly though, damage pleadings should structure the Claim optimally in light of the court's monetary limit (see below), and keep in mind the way in which court calculates interest (especially pre-judgment interest) on any eventual judgment (discussed in the chapter "Trial"). Both of these issues require a good understanding of the way the law categorizes different types of damage.
. Types of "Damages"
Lawyers tend to speak in terms of "general", "special", punitive and "pain and suffering" damages (though there are many other terms used as well). These are terms drawn from the common law and used as accepted terms of practice. However, the categories discussed in the legislation [Courts of Justice Act, s.128] for the purposes of pre-judgment interest calculation are: "pecuniary", "past pecuniary" and "non-pecuniary". Thankfully the terms "exemplary" or "punitive" damages are the same in both areas of discussion.
The problems arise from the unfortunate use of the term "pecuniary" in the legislation - literally: "relating to money". Obviously, this degree of generality is unhelpful as damages claims are always measured as and resolved into money. The term provides no obvious internal distinction at all between the types of damages.
While not claiming to be the final word on the issue, the most consistent and coherent practical resolution of this uncertainty that I can suggest is set out in the following definitions: 1. Past Pecuniary Damages (which include "special damages", "liquidated damages" or "expenses", and easily-calculable debt):
"Special damages" are goods or services purchased (normally after the wrong-doing) by a plaintiff in a reasonable effort to reduce and reverse the effects of the defendant's wrong-doing. Typically these are easily calculated by means of receipts.
Loan debt also falls into this category, as it is typically easily ascertainable by reference to documentation alone. If the determination of the loan amount requires anything more than arithmetic then you are likely looking at non-liquidated amounts which, in the event of a default judgment, will require adjudication by a deputy-judge.
Such amounts should be pleaded in as precise an amount as possible, and should be characterized in the pleadings as (1) "special damages" or "debt" (as the case may be) and also (2) as "liquidated damages", the latter in order to facilitate obtaining default judgment over the counter (see the chapter: "Default Proceedings") should it become available.
While it is common for additional special damages to accrue between the time of filing the Claim and trial, you can expect the court to be open to them -especially if you have advised the court and the other side by letter beforehand of any additional such amounts (with copies of receipts) before trial. Note that para 13(g) of the sample Claim requests the court to grant "such other remedy as the court sees as just".
2. General Damages (also "pecuniary loss"):
These are losses - NOT after-the-fact expenses - calculated by deductive reasoning from such things as contract and sales amounts, prior trends of profit or income, and by valuation of lost property. These are subject to alteration up or down by external intervening factors: eg. "the market cooled down just when the cause of action arose, so damages for loss of profit are less."
General damages may not be assessed by a court clerk in the event of default judgment (ie. they are not 'liquidated') - they require assessment by a judge.
3. Non-Pecuniary Damages (also "pain and suffering"):
Damages assessed to compensate for physical and mental pain and suffering. Incapable of determination from any application of arithmetic or deductive reasoning as they lack any inherent relationship to money.
Such damages definitely require a judge's assessment re quantum, which they will base largely on similar other cases that have been decided by the courts (ie. precedents). While quantifying pain and suffering damages is always difficult for the court, it is a principle of law that the inherent difficulty of quantifying damages will not prevent a judge from doing so (but it is the plaintiff's job to do the best they can to prove and explain their injury).
4. Exemplary or Punitive Damages:
These are not actually "damages" in the conventional sense. They are not ordered to compensate for loss or expense, but are ordered to "punish" egregious behaviour by the defendant. They in essence a "fine" which just happens to be made payable to the plaintiff. The law of punitive damages is extensive and will not be covered here other than to note that they are awarded far less frequently than most Small Claims plaintiffs hope. The standard for punitive damages is quite high and usually requires intentional malicious harm, fraud or gross negligence. . Structuring Damage Pleadings
You have almost certainly heard on the news something like: "X Corporation was sued today for $50 million". The media likes to lead with these huge figures which are invariably drawn from the Claim documents filed with the court. As the following will explain, you should take such figures with a grain of salt.
The damage amounts pleaded in a Claim are only meant to "reserve the right" to argue up to that maximum. Further, a total Claim for $50 million may be made up of $10 million for "loss of profit", $20 million for "pain and suffering", and $20 million punitive damages - for example. Lawyers pleading this way want to ensure that the maximum possible award for each of these "heads" of damage is reserved, for if they don't do it in the Claim at the beginning, they might not be allowed the higher amount if their case goes really well.Note: An exception to this is when the claim includes amounts for "debt" (see the definition of debt in the discussion of the "debt set-off defence", below). Then the pleading should be as exact as possible to facilitate default judgment should that become available (see Ch.9: "Default by Defendant"). So, given that the maximum amount of a claim in Small Claims court is $25,000 - how are damages best structured to optimize the damage award?
The method is ilustrated in para.15 of the sample Claim above. Plead damages by each "head" freely using your best judgment of the maximum you might possibly get - even if the total is over the court's monetary limit ($25,000). Then "abandon" the excess of any total amount of damages (not interest or costs) over the court's $25,000 monetary jurisdiction. The court may then assess all of the heads of claim fully so that if the plaintiff does poorly on one head, another might be successful to utilize unused portions of the court's monetary limit.
If after realistically examining the case you are convinced that you have a reasonable chance for judgment significantly over $25,000, you may want to re-consider whether the case should be in Small Claims Court after all.
Note however that a cause of action may not be "split" into two or more proceedings in order to bring it within the court's jurisdiction [R6.02]. For example, you can't take a loss of $50,000 stemming from one contract breach and sue for $25,000 in two separate Small Claims proceedings. It has however been held by a higher court that where two parties on one side of a contract join to sue the other side in one proceeding then the combined total claimed may exceed the Small Claims limit (though not of course twice that limit), and does not thereby offend R6.02 [Kent v Conquest Vacations (Div Ct, 2005)].
(o) Identity Parties by Their Full Names
Both for purposes of clarity as to the identity of the parties and to reduce confusion in collection efforts, parties should - wherever possible - identify and name each other by their full names (not initials) in pleadings. For example: "John Henry Doe".
Do not use honorifics such as "Mr.", "Mrs." or "Dr.".
(p) Plead Facts Supporting Venue
As discussed in the chapter "Jurisdiction", a proceeding is properly brought in a specific local court by virtue of a geographical relationship of the events and the parties with the local court's territorial division. This is the issue of "venue".
It is useful to assert the facts which justify the selected venue by citing them in the pleadings. The following are some typical phrases which might reflect these facts:- The events and transactions which constitute the cause of action predominantly took place within the territorial division of this Honourable Court, OR
- The defendant/s resides (or carries on business) within the territorial division of this Honourable Court.
A defendant who disagrees that the chosen court is the correct venue may state this in their Defence. If they are unable to attend the trial the court should consider the issue in their absence.
3. Claim
(a) Issuance, Filing and Service of Claim
An action is "commenced" by the filing of the Plaintiff' Claim with the court, along with the required filing fee. The Plaintiff should file an original copy of the Claim for the court - and have copies available for each defendant [R7.01], unless it is done electronically where extras are not required [R7.01(1.1))]. Of course you should keep at least one copy for yourself.
Form 7A: Plaintiff's Claim
If satisfied that the document is acceptable as to form, the court clerk will then "issue" the Claim by dating, signing, and "sealing" it (with the court's seal [CJA s.147]) and by assigning it a court file number [R7.02(1)].
The original Claim will be filed with the court and "issued" copies will be given back to the plaintiff for the plaintiff to serve on the defendant/s [R7.02(4)] (service is not done by the court). After service the plaintiff must file an "affidavit of service" for the proceeding to continue (see Ch.6: "Service of Documents").Note: There are special rules and Notices that apply when suing sole proprietors and partnerships. These are covered in Ch.4: "Parties" and should be reviewed carefully. (b) Contents of Claim
The Rules of the Small Claims Court state that a Plaintiff's Claim "shall contain the following information, in concise and non-technical language" [R7.01(2)]:- The full names of the parties to the proceeding and, if relevant, the capacity in which they sue or are sued.
- The nature of the claim, with reasonable certainty and detail, including the date, place and nature of the occurrences on which the claim is based.
- The amount of the claim and the relief requested.
- If the plaintiff is self-represented, the plaintiff’s address, telephone number and email address (if any).
- If the plaintiff is represented by a representative, the representative’s name, address, telephone number, email address (if any) and Law Society of Ontario registration number (if any).
- The address where the plaintiff believes the defendant may be served.
- If the plaintiff's claim is based in whole or in part on a document, a copy of the document shall be attached to each copy of the claim, unless it is unavailable, in which case the claim shall state the reason why the document is not attached.
Note the discussion on "Principle of Pleading" above regarding the detailed drafting of a Claim.
(c) Electronic Issuance of Claim
Where "(a) plaintiff’s claim that is filed electronically shall be issued electronically [R7.02(2)]. "(T)he clerk shall save a copy of the issued claim in the court’s case tracking system' and "the issued claim shall be provided to the plaintiff in electronic format" [R7.02(3)].
4. Defence
(a) Filing and Service of Defence
With changes brought about on 01 July 2014 by Reg 44/14, the prior practice - whereby the defendant would file their Defence with the court and the clerk would serve it on the other parties - was ended. Now Defences must be served first by the defendant, and then filed with the court with proof of service. Both service and filing must be performed within 20 days of the defendant having been served with the Claim [R9.01].
Form 9A: Defence
Failure to file a Defence in time may result in default proceedings against the defendant. However a Defence may still be filed anytime before the defendant is "noted in default" by the court (see Ch.9: "Default by Defendant").
(b) Contents of Defence
A Defence should contain the following [R9.02]:- The reasons why the defendant disputes the plaintiff's claim, expressed in concise non-technical language with a reasonable amount of detail.
- If the defendant is self-represented, their name, address, telephone number, and email address if any.
- If the defendant is represented, the representative's name, address and telephone number, email address if any, and their Law Society of Ontario registration number if any.
- If the defence is based in whole or in part on a document, a copy of the document shall be attached to each copy of the defence, unless it is unavailable, in which case the defence shall state the reason why the document is not attached.
In higher courts it is the practice for a Statement of Defence to review each paragraph in the Claim one by one stating whether the defendant admits, disputes, or want to clarifies (which they then do). For instance:- The defendant admits paras.1,2,3,8 and 11 of the Claim.
- The defendant disputes paras. 4,5 and 10 of the Claim.
- The defendant has no knowledge of paras.6 and 7 of the Claim.
- With respect to para.9 the defendant alleges he did not call the plaintiff a "shithead", but rather called him a "bad employee".
- etc...
While the Claim may not come to you in this form, it is nonetheless useful to isolate out each statement in the Claim and admit or dispute it expressly.
As well, "affirmative defences" by defendant (eg. plaintiff missed a limitation period, plaintiff is estopped from suing by his actions, plaintiff failed to give contractual notice, etc) should be pleaded in a Defence and not raised for the first time at trial as a surprise the other side and the court. Introducing defences at the last minute may result in the defence being excluded, or a last minute argument over amending pleadings, which you may lose - or at any rate could be expensive and delay the proceedings when the other side says it wants an adjournment to prepare to meet this "new" issue. Judges hate surprises.
Note the discussion on "Principle of Pleading" above regarding the detailed drafting of a Defence.
(c) Admission of Liability and Proposal for Payment
. Overview
As an alternative to disputing the Claim, a defendant may also file a Defence which admits full or partial liability and proposes terms of payment (called a "Proposal") [R9.03(1)]. This may be done for part of a Claim only, with the Defence then continuing to set out the defence for the remainder of the Claim.
The defendant may then be bound to the terms of this Proposal, or the plaintiff may dispute the Proposal (below).
. Default on Terms of Proposal
If the plaintiff does not dispute the Proposal (as below) within the 20 days allowed, and if the defendant defaults on its terms, the plaintiff may serve them with a Form 20L: Notice of Default of Payment [R9.03(2)(b)].
If the default continues for 15 days after the service then the plaintiff may obtain over-the-counter judgment for the unpaid balance of the Proposal from the clerk by filing with the clerk an Form 20M: Affidavit in Default of Payment setting out [R9.03(2)(c)]:- the failure to abide by the Proposal;
- amounts paid and unpaid;
- that 15 days have passed since the "Notice of Default of Payment" was served on the defendant [be sure to allow time for any service delay (see Ch.6 "Service of
Documents")].Note: To avoid the occurence of default on the Proposal within the 20 day period that the plaintiff has to dispute the proposal, any performance under the proposal required to be done in that time should either be performed (typically, a cheque enclosed) - or, alternatively, any initial performance under the proposal should be scheduled to start after the 20 days.
Note that default cancels any favourable repayment terms (eg. instalments) in the Proposal.
. Disputed Proposals
The Plaintiff may dispute a Proposal by filing with the court, and serving on the defendant - within 20 days of service of the Proposal - a request to the clerk for a "terms of payment hearing" [R9.03(3)].
Form 9B: Request to Clerk
. Terms of Payment Hearing
The court will then schedule a "Terms of Payment" hearing, giving notice to the parties by fax or mail. If the defendant is an individual (ie. not a corporation or partnership: see Ch.4 "Parties") the clerk shall also send to the defendant a Form 20I: Financial Information Form [R9.03(4.2)], which the defendant shall complete and serve on the creditor (ie. the plaintiff in the claim which has been admitted) plaintiff before the hearing - BUT NOT file with the court [R9.03(4.3)].
Terms of Payment hearings may be heard and orders issued by a referee [R21.01(2)] (see Ch.2, s.4: "The Court: Referees"). Terms of payment orders will usually set out a schedule for payments, interest terms (if any), etc.
Unless the order specifies otherwise, default on its terms can result in an over-the-counter court order that the balance of the undisputed amount be made payable immediately [R9.03(7)]. This frees the creditor to seek the monies in whatever legal fashion they can: see Ch.15: "Collection". The Plaintiff obtains this order by filing with the court their "affidavit ... swearing to the default and stating the amount paid and the unpaid balance." [R9.03(7)].
. Failure to Attend Hearing
If the defendant fails to appear at the Terms of Payment hearing, the clerk may issue default judgment for the part of the claim that has been admitted [R9.03(6)]. This will be served on all parties named in the claim by the clerk by mail or fax
[R8.01(4)].
Form 11B: Default Judgment
(d) Debt "Set-off" as Defence to Debt Claim
If the defendant, being sued for a debt, alleges that the plaintiff owes them a debt (this only works debt v debt), then the defendant may allege this in "set-off" (reduction) of the plaintiff's claim.
A "debt", typically, is a fixed amount owed by reason of an contract or agreement between the parties. If the amount requires anything other than an arithmetic determination, OR if it is not based in a contract or agreement, then it is likely not a debt, but a claim for damages which must be assessed by the court. Common debts include loan repayments, accounts payable, unpaid invoices, etc.
The principle at work here is simple arithmetic deduction. If the amount of the Defendant's set-off eventually proven is larger than the plaintiff's debt claim proven then the balance will be ordered payable to the defendant. The debts need not be of the same nature or stemming from the same transactions [CJA s.111].
(e) "Contribution" as a Defence in Negligence
As is discussed Ch.4: "Parties", sometimes defendants may be held jointly liable for damages caused by their negligence. In such cases the court will apportion liability for damages by percentages and the plaintiff may collect fully from any such defendant.
A variation on this principle, called "contribution", can cut against a plaintiff. Sometimes a defendant will argue in Defence that the plaintiff was themself partly (or even entirely) at fault. In such a case the court will assign a percentage degree of fault against the plaintiff, and reduce the award to them accordingly. For instance, if A sues B and A (the plaintiff) is found to be 40% liable on damages of $10,000, then A can only collect 60%, or $6000 [Negligence Act, s.3].
Continue to Rest of Chapter
|
