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4. Pre-Trial Disposition of the Proceedings

(a) Overview

There are several grounds upon which proceedings can be dealt with summarily by the court before trial, but they are a bit scattered in terms of their source authority so they bear some initial explaining.

Firstly the court has a broad authority to "stay" (suspend or cancel, depending on how long it lasts) a proceeding under s.106 of the Courts of Justice Act (CJA) [see sub-section (b) immediately below]. But the court also has authority to do this (along with some other remedies) under the Rules of the Small Claims Court [see sub-section (d) below].

Next the Superior Court (the main trial court in Ontario) has jurisdiction to make orders restricting and barring "vexatious" (ie. nuisance) proceedings, subject to permission from itself to continue them [see sub-section (c) below] [CJA s.140].

Lastly the Small Claims court has express jurisdiction to dismiss, grant judgment in, or stay proceedings (and, as of 01 July 2014, to stay or dismiss motions brought) under R12.02(2)(2.1), in conjunction with a motion to amend or strike pleadings under R12.02(1) [see Ch.8, s.7(d): Pleadings: Amendment: Motions for Dismissal, Judgment and Stay of Proceedings"]. The grounds for these orders are very similar to those for stays and for vexatious proceedings orders, and they include that the pleadings:
  • disclose no reasonable ground of Claim or Defence;

  • "may delay or make it difficult to have a fair trial";

  • are "inflammatory, a waste of time, a nuisance or an abuse of the court's process".
It is this last authority that is much more commonly relied upon for these purposes, though it should be noted that it's use requires a related "order striking out or amending a document under sub-rule [12.02(1)]". In any case where (and they would be few, if any) the stay or vexatious proceeding order is sought on grounds OTHER than those disclosed on the face of the pleadings, the earlier-mentioned CJA authorities should be relied upon.

Parties considering making a motion should consider using the mandatory settlement conference as oppourtunity to do so: see s.3(b.1) above.
Case Note:
In Kipiniak v. K. Dubiel (Div Ct, 2011) the appeal court allowed an appeal against a deputy-judge's dismissal of action under R12.02, where no formal motion had been made and the DJ was acting entirely at her own initiative:
[35] The jurisdiction of a Small Claims Court judge to dismiss an action for failing to disclose a cause of action, or because the claim is “inflammatory, a waste of time, a nuisance or an abuse of the court’s process” is found in Rule 12.02, as was noted by the Small Claims Court judge. That Rule clearly states that this jurisdiction arises in the context of a motion. In this case there was no motion. Because there was no motion, it follows that there was no notice to Mr. Kipiniak, no time for him to consider his position and no opportunity for him to file material or make submissions in support of his position. Indeed, the judge acted entirely on her own initiative, apparently as an administrative action. In doing so, she acted entirely without jurisdiction.
(b) Stay of Proceedings

A court had broad jurisdiction to "stay" (suspend) a lawsuit on terms it considers just [s.106 CJA]. This may be done either in response to a motion by a party or on the court's own initiative.

Examples of situations that might lead to a "stay" include:
  • lack of jurisdiction of the court (eg. monetary limit, geographic venue, subject matter, parties);

  • parallel non-court (ie. administrative) proceedings dealing with the same matters - see Ch.3 "Jurisdiction" (for parallel court proceedings see the discussion in this chapter on merger, joinder and transfer of proceedings;

  • res judicata (the matter had already been litigated and resolved);

  • abuse of process;

  • lack of authorization to commence proceeding (for example where an agent or lawyer does not have authority to represent the client, or where a party that has not followed steps necessary to maintain their proceeding: eg. Business Names Act registration (see the Ch.4: "Parties");

  • party's failure to comply with previous order of the court.
(c) Vexatious Proceedings

Courts over the last 20 years have been given special authority to deal with persistent unmeritorious proceedings, known as "vexatious proceedings". This authority is separate from (though similar to) the pre-existing authority of all courts to stay or dismiss a proceeding as an abuse of process or on any other ground [CJA s.140(5)].

While the small claims court is a "branch" of the Superior Court of Ontario [CJA, s.22], it does not have jurisdiction to make orders restricting "vexatious" proceedings. If such an order is sought with respect to a particular case in the Small Claims court, it must be obtained from the Superior Court of Ontario.

Vexatious proceedings tend to repeat the same issues, to be without legal merit, to ignore prior court rulings, and be motivated by personal animus rather than an honest or well-grounded desire for a court-available remedy. Sadly, they are often instituted by litigants with mental health problems.

If someone feels that another person is engaged in vexatious proceedings, they may apply to the Superior Court of Justice for an order discontinuing any proceeding by the person and/or barring them from commencing any further court proceedings, unless they get leave (permission, or "rescission" of the vexatious proceeding order) from the Superior Court of Ontario [CJA s.140].

Leave to continue or institute a proceeding which is covered by a vexatious proceeding order may only be granted if the court is satisfied that the proceeding is not an abuse of process and that there are reasonable grounds for the proceeding. Further, no other relief may be sought in such an application, the Attorney-General may be heard on the application, and no appeal lies from the court's disposition of the application.

If such a barring Order has been made against a party, and they nonetheless institute or continue proceedings in the Small Claims Court without first obtaining leave to do so or having first had that Order rescinded, then the court itself on it's own initiative, or on written request by any other party, shall issue an Order of the Small Claims Court staying or dismissing the subject action [R12.03(1,2]. Such an Order may be heard ex parte (without notice to the frivolous litigant) but once made shall be served by the clerk forthwith on all parties (including the frivolous litigant) by mail [R12.03(3)].

(d) Motion to Strike Pleadings and Non-Suit Orders

As mentioned in the "Overview" above, Ch.8, s.7(d): "Pleadings: Amendments: Motions for Dismissal, Judgment or Stay of Proceedings" discusses pre-trial (and even trial) procedures to amend or "strike out" part (or all) of the other side's documents (invariably, pleadings) on motion by other parties [R12.02]. The main purpose of this is to eliminate ill-conceived paragraphs of the other side's pleadings documents (ie. their Claim or Defence), so that evidence and argument on those issues will not be necessary at trial.

A typical basis for a motion to strike pleadings is that the pleadings - even if accepted (for the sake of arguing the motion) by the court as proven - do not provide the court with jurisdiction, or do not provide the party who filed them with a cause of action (or defence - as the case may be).

In rarer circumstances, such motions can also be based on the behaviour and motivation of the party who filed the documents. For example, in McGowan v Toronto (City) (Ont CA, 2010) an attempt to re-litigate fact findings already made in quasi-criminal proceedings under the Provincial Offences Act) was held to be an abuse of process.

In considering a Small Claims Court Rule 12.02 motion to dismiss a claim as 'inflammatory, a waste of time or as a nuisance', the Divisional Court in Vuong v Toronto East General & Orthopaedic Hospital (Ont Div Ct, 2010) held that the R12.02 standard to dismiss established a lower (ie. easier for the plaintiff) threshold to dismiss than the similar Rules of Civil Procedure R21.01(3)(d) 'frivolous, vexatious or abuse of court' standard. Here the court held that the plaintiff's use of a new legal theory of liability to litigate issues which could have been raised in earlier, limitation-barred proceedings, was an abuse of process. The court stated:
[15] Parties are not permitted to commit repeated litigation because of new views that they may entertain of the law of the case. If this were permitted, litigation would have no end, except when legal ingenuity is exhausted: Maynard v. Maynard, 1950 CanLII 3 (SCC), [1951] SCR 346 at 358-359. It is incumbent on litigants to raise all arguments in their litigation that they feel might support their case, and it is not open to them to raise such arguments in subsequent litigation: Ontario v. Bear Island Foundation, [1995] O.J. No. 1624 (Ont. Gen. Div.).
Here the new theory was based on suffering caused the plaintiff family members of the deceased by the defendant hospital's failure to adequately explain the events of the death to them.

If - after a motion to amend or strike has been made, and typically in the same motion - the pleadings are so weak that there is effectively no cause of action (or defence, as the case may be) left, then an opposing party may also move for dismissal - or judgment - of the action as the case may be. This is known as a "non-suit" motion.

In situations where the pleadings reveal problems that are solely jurisdictional in nature then court will likely order a "stay" (indefinite suspension) of proceedings instead [see above s.4(a)].

(d.1) Stay or Dismissal of the Action at the Initiative of the Court
Nearly identical provisions to the following are in place which allow the court to stay or dismiss motions. See Ch.12, s.6(b).
With amendments in force 01 July 2014, the court itself may make Orders staying or dismissing actions "if the action appears on its face to be inflammatory, a waste of time, a nuisance or an abuse of the court’s process" [R12.02(3)]. Additionally, the court clerk is under a duty to notify the court of cases that could be subject of such an order [R12.02(9)].

The procedure for the making of such Orders is as follows [R12.02(4)]:
  • notice that the court is considering such an Order shall be sent to the plaintiff;

  • the plaintiff has 20 days after receipt of the notice to file written submissions, which shall not exceed four pages in length;

  • if no acceptable written submissions are filed, then the court may make such Order as it sees fit without further notice;

  • however, if acceptable written submissions are filed, the court has discretion (ie. it may) direct that the submissions be mailed to any other parties that it designates;

  • if the plaintiff's written submissions are mailed to other parties, those other parties have 10 days from receipt to: (1) prepare and file responding written submissions with the court (again, not exceeding four pages in length), (2) to mail them to the plaintiff and (3) if requested by any other parties to mail them to those other parties;

  • any Order so made shall be mailed to all parties forthwith after it is made [R12.02(5)].
Note re Mailing of Written Submissions:
The references to 'mailing' of the written submissions above make it clear that this is not formal 'service', and as such an affidavit of service will not be required by the court to file the submissions with it. However such mailings are still subject to the standard 'fifth day after mailing' rule, which 'deems' when the documents are received [R12.02(6)]. As well, mailing shall be made to the last address of the person (or their representative) that is known to the sender [R8.07(1)].
Case Note:
In the case of Capital One Bank v Ramirez-Rodriguez (Div Ct, 2017) a deputy-judge who ordered dismissal without either dispensing with, or using, the R12.02(4) procedures was reversed on appeal. Additionally the court commented as follows on the narrow circumstances that R12.02 should be invoked:
[6] Rule 12.02 is a similar type of rule to r. 2.1 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 that permits this court to strike out a claim on its own initiative. However, r. 2.1 has similar notice requirements to those in r. 12.02 of the Rules of the Small Claims Court. The reason for notice is fundamental. The right to be heard before a person’s rights are determined is one of the most basic tenets of our legal system. If those rights are going to be dispensed with, there needs to be valid and articulated reasons for doing so.

[7] Further, in exercising the authority under these rules, the Court of Appeal has made it clear that they should only be used where it is plain and obvious that the claim is abusive. For example, in Scaduto v. Law Society of Upper Canada, [2015] O.J. No. 5692 (C.A.), the court said, at para. 8:
Under this line of authority, the court has recognized that the rule should be interpreted and applied robustly so that a motion judge can effectively exercise his or her gatekeeping function to weed out litigation that is clearly frivolous, vexatious, or an abuse of process. However, the use of the rule should be limited to the clearest of cases where the abusive nature of the proceeding is apparent on the face of the pleading and there is a basis in the pleadings to support the resort to the attenuated process.
. 620369 Ontario Inc. v. Borroto

In 620369 Ontario Inc. v. Borroto (Div Ct, 2020) the Divisional Court found procedural flaws with the deputy-judge's use of 12.02(4):
[32] I acknowledge that the first words in rule 12.02(4) permit a judge to order that the procedure set out in the rule does not apply, and one might argue that I should infer from the Endorsement that the motions judge indirectly made such an order in this case. However, I find that if the motions judge had intended to eliminate or circumscribe the appellant’s statutory rights, it was incumbent upon the motions judge to specifically state that he was making such an order and to provide cogent reasons for the order. He did neither in this case.

[33] Moreover, in the circumstances of this case, there does not appear to be any foundation for an order that the procedure set out in rule 12.02(4) should not apply. That is, the draconian remedy of a complete dismissal of an action in these circumstances should only be imposed after proper notice has been given to the alleged offending party and that party has had an opportunity to make submissions. To order otherwise would be to endorse a procedure that is not fair or just. The same analysis applies to an order to stay actions that are not before the court. Thus, I find that the motions judge was required to follow the steps set out in rule 12.02(4) in these circumstances before he stayed or dismissed any action.

[34] In summary, I find that Ms. Goerz appeared in Small Claims Court on November 26, 2019, intending to make submissions on a motion for default judgment. The motions judge did not receive her submissions on that motion; rather, the motions judge raised issues with respect to the manner in which the motion was brought and with respect to the jurisdiction for the action itself.

[35] Ms. Goerz had no notice that the motions judge would raise these issues in open court and had no notice that the motions judge intended to make rulings on these issues in respect of action 5252/19, or in respect of other actions brought by the appellant that were not before the court on that date. The confrontation of appellant’s counsel in a courtroom does not constitute sufficient notice or provide sufficient opportunity to make submissions.

[36] I find that the motions judge erred by failing to comply with the steps set out in rule 12.02(4), thereby depriving the appellant of notice of the contentious issues and the opportunity to make cogent submissions. I also find that this failure to follow the steps set out in rule 12.02(4) constitutes an error in law.

[37] In my view, this overarching error in law by the motions judge permeates the entire decision of the motions judge. Therefore, for this reason alone, the decision of the motions judge must be set aside.
(e) Summary Judgment Motion

. Overview

In the higher courts there is a procedure for motions for "summary judgment" under R20 of the "Rules of Civil Procedure". They can be used when the moving party feels that their case is so strong and easily ascertainable (ie. "no genuine issue for trial") that the court can decide it on affidavit evidence and legal argument alone. Essentially these are non-suit motions, differing only in that they have an additional - and usually small or uncontested - factual element. Such motions are unsuitable when issues of credibility exist with respect to important material facts, requiring a judge to hear and see the demeanour of witnesses.

. Kaur v Deopaul (Ont Div Ct, 2006)

This procedure was used to decide a relatively simple limitation period issue in Kaur v Deopaul (2006) QL #4170 (Div Ct). In so doing the court did not rely on R12.02 [discussed in (d) above] - which does not contain provisions for such a motion - but instead had recourse to the more general 'practice by analogy' authority of R1.03:
If these rules do not cover a matter adequately, the court may give directions and make any order that is just, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act governing the action and, if the court considers it appropriate, by reference to the Rules of Civil Procedure.
Use of such a procedure in a limitation period situation is quite sensible.

. Van de Vrande v Butkowsky (Ont CA, 2010)

In Van de Vrande v Butkowsky (Ont CA, 2010) the Court of Appeal directly considered whether the Small Claims Court had jurisdiction to hear a motion for summary judgment analogous to that expressly allowed for under the Rules of Civil Procedure (which govern the regular Superior Court). The appellant argued that it did have such jurisdiction based on a combined reading of R1.03(2), R12.02 and CJA s.25. The Court of Appeal concluded that while several RCP motions had been expressly imported into the Small Claims Rules, the absence of such express inclusion in the case of summary judgment motions reflected an intentional exclusion on the part of the legislature.

The Court of Appeal disagreed with the Divisional Court's view of the case before it that the Small Claims Court did not have such jurisdiction because it could not make findings of fact on a motion. The Court of Appeal reasoned rather that the absence of an exclusion from doing this - such as is expressly located in RCP R21 (motion to strike pleadings) - indicated a legislative intention that it had such authority.

However, noting the distinct wording of R12.02 (which varies from the similar authorities set out in the RCP) the court seemed to suggest that the issue was more one of form than substance, adding obliquely that "(t)he error may in part result from the appellant?s motion having been framed as seeking an order for ?summary judgment? rather than an order to ?strike out? the respondents claim pursuant to r. 12.02." In other words, given the Court of Appeal's express approval of the Small Claims Court 's ability to make fact findings on motions, a de facto motion for summary judgment may in many cases be available, but shouldn't be styled as such:
[19] Conceptually, I view r. 12.02 as being situated somewhere between the rules 20 and 21 of the Rules of Civil Procedure. It is not a summary judgment motion involving extensive affidavits and a requirement such as contemplated in r. 20 of the Rules of Civil Procedure where the responding party must put his ?best foot forward?. It is more akin to a r. 21 motion, although it is worded more broadly and does not have the same prohibition on the filing of affidavit evidence. It is a motion that is brought in the spirit of the summary nature of Small Claims Court proceedings and involves an analysis of whether a reasonable cause of action has been disclosed or whether the proceeding should be ended at an early stage because its continuation would be ?inflammatory?, a ?waste of time? or a ?nuisance.?

[20] In my view, the references to actions that are inflammatory, a waste of time, or a nuisance was intended to lower the very high threshold set by r. 21.01(3)(d)?s reference to actions that are frivolous, vexatious, or an abuse of process.
My conclusion from this is that some de facto motions for summary judgment may be brought if they are located and styled more directly within the Small Claims court's express jurisdiction as set out in s.4(d) above. This conclusion is bolstered by the fact that the Court of Appeal upheld the original motion order (to dismiss), despite it being 'erroneously' styled as one for summary judgment. In a subsequent case, O?Brien v. The Ottawa Hospital (Civic Campus), 2011 ONSC 231 (CanLII) (Ont Div ct, 2011), a dismissal made consequent to a similar 'erroneously' brought motion for summary judgment in the Small Claims Court was upheld on similar reasoning.

. Kelava v. Spadacini (Ont CA, 2021)

In Kelava v. Spadacini (Ont CA, 2021) the Court of Appeal engaged in an interesting discussion of when and how the Small Claims Court can reach out and 'extend' it's procedural jurisdiction when it's Rules don't specifically address what is sought [para 15-37].

(f) Discontinuance by Plaintiff Where No Defence Filed

Starting 01 January 2010 there is a new procedures available to a plaintiff to discontinue a proceeding against a defendant who has not filed a defence - in whole or part - to the claim [R11.3.01(1)]. The rule is ambiguously worded, but seems to mean that failure to file any part of a defence only entitles the plaintiff to discontinue the whole of the claim against the defaulting defendant. In fact the Form used for this purpose (linked below) presupposes that the discontinuance must be with respect to all of the individual claims against the defaulting defendant. If a plaintiff was faced with a partial defence to a claim and wished to dismissed the undefended parts of it, their remedy would appear to lie in amending the Claim [see Ch.8,s.7: Pleadings: Amendment to Pleadings and Motions to Dismiss].

This provision can be expected to be rarely used, but may have some application in tort cases where many speculative parties are sued at the beginning of a case, largely out of uncertainty as to their liability and to preserve claims against expiring limitation periods. In such situations, 'as the dust settles' after the Claims are served, the availability of such discontinuances makes it procedurally easier for the plaintiff to 'clean up' the case.

The discontinuance is achieved by serving a Form 11.3A: Notice of Discontinued Claim on all defendants so far served with the Claim, and filing that with the court with proof of service.

No discontinuance may be made against a 'person under disability'. The concept of 'persons with a disability' is explained in Ch.4, s.2: "Parties: Persons With a Disability".

If a claim is discontinued under this provision, the doctrine of res judicata does not apply to the claim as a result of the discontinuance, which means that - assuming no limitation periods have been missed, and barring a court order to the contrary - another action making the same claims against the discontinued defendants may be brought later [R11.3.01(2)].

(g) Abandonment by Plaintiff

. Overview

By amendments effective 01 July 2006 (Reg 78/06), and subsequently re-amended on 15 September 2015, the Small Claims Court Rules introduced provisions [R11.1 "Dismissal by Clerk"] regarding the failure of a plaintiff to prosecute the action promptly - sometimes referred to (prematurely in most cases) as 'abandonment'. These are analogous to traditional civil procedure "default" rules respecting non-responsive defendants, except that these plaintiiff rules typically result in the complete dismissal of the action against the plaintiff/s.

These provisions do not require any positive action by a party to be activated (such as a requisition of the court), just the specified inactivity by the plaintiff and the passage of time. The onus is on the court clerk to actually execute the dismissal.

Prior to 15 September 2015 there was a 'notice of pending dismissal' (author's term) requirement before such a dismissal could be ordered by the clerk. This notice set out what actions the plaintiff could engage in to avoid the dismissal (primarily: 'list it for trial ASAP'). However this notice requirement was abolished as of 15 September 2015, and any notices outstanding at that date were rendered void at that date [R11.1.01(4)] (this provision is now spent and repealed).

Case Note:
In Bohumil Janicek v OC Transpo, (Ont Div Ct, 2011) the court sets out the principles to be applied when dismissing an action for delay of the plaintiff in advancing it (under pre-R11.1.01 rules). While the current Small Claims Rules render this a near-'automated' process, these older principles may still have some application when the issue is actively litigated:
[9] The parties both cite the correct test on a motion to dismiss an action for delay, as follows:
The principle to be applied on a motion to dismiss for delay is that the action should not be dismissed unless: (1) the default is intentional and contumelious; or (2) the Plaintiff or his or her lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial might not now be possible. It is presumed that memories fade over time, and an inordinate delay after the cause of action arose or after the passage of limitation period gives rise to a presumption of prej udice. Where there is a presumption of prejudice, the Defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the Plaintiff rebuts the presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the law suit do not depend on the recollection of witnesses or that all necessary witnesses are available with detailed recollection of th e events. If the presumption is rebutted, then the ac tion may still be dismissed if the Defendant leads convincing evidence of actual prejudice.?: Armstrong v. McCall et al 2006 CanLII 17248 (ON CA), (2006), 213 O.A.C. 229 (C.A.) at paragraph 11, citing paragraph 4 in Woodheath Development Ltd. v. Goldman 2001 CanLII 28019 (ON SC), (2001), 56 O.R. (3d) 658.
. Criteria for Dismissal on Abandonment, Exceptions

The pre-15 September 2015 rules distinguished between dismissals for cases where a defence had, or had not, been filed. The present rules no longer make that distinction. The current criteria for dismissal are now straightforward [R11.1.01(1-3)] (though subject to the exceptions noted below). These criteria are that any unresolved action will be dismissed by Order of the clerk within two years of its commencement, or by 01 September 2017 - whichever is later, if:
  • the plaintiff has not taken any steps [under R11.03] to achieve default judgment with respect to 'unliquidated damages' [see Ch.9, s.3 for what constitutes 'liquidated damages'];

  • a trial date has not yet been requested.
Exceptions to dismissal, even where the above criteria have been met, are where any of the following apply:
  • an offer to settle the action has been accepted and filed (this is a bit redundant, since in this case the action has been resolved), and

  • where "the defence contains an admission of liability for the plaintiff’s claim in the action and a proposal of terms of payment under subrule 9.03 (1)" [see Ch.8, s.4(c)]; and

  • "the plaintiff is under disability" [for what constitutes 'disability' see Ch.4, s.2].
. Service of Dismissal Orders

The clerk's order of dismissal shall be served by the clerk on all parties [R11.1.01(3)].

. Reversing Dismissal on Abandonment

The Rules do not provide an express procedure for reversing a dismissal for abandonment, though they do provide for "restoring" an action to the trial list if the other parties consent [R11.2.01(iv)] (see Ch.11, s.12 "Motions and Procedural Changes: Procedural Changes on Consent").

Where the other parties do not consent, there is no express mention in the Rules of a right to seek this relief by way of motion. So parties will have to make a motion seeking the court's exercise of its broad "interests of justice" discretion under R2.02. (see Ch.1, s.4: "Overview: Judges") to restore the action to the trial list.

. Where Defendant's Claim

Where a defendant has made a defendant's claim within the main action, and the main action has been dismissed under these R11.1.01 provisions, then the defendant's claim shall be automatically dismissed by the clerk 60 days after the Order dismissing the main action is served, except where a court orders otherwise during that 60 day period [R11.1.02].

The intent of this rule appears to be to give the defendant 60 days to move before the court to maintain the Defendant's Claim. The requirement that this Order be obtained (and not just initiated by motion) within the 60 day period after dismissal of the main action seems unnecessarily short, and a defendant could still pursue this Order outside of that timeframe if they added a request to vary the Rules under R2.02 "in the interest of justice".

(h) Dismissal for Non-Payment of Interlocutory Cost or Other Monetary Orders

Sometimes courts are faced with an argument that the rights of a party (commonly their right to not have their pleadings struck) are jeopardized over their non-compliance with interlocutory orders to pay monies, typically costs. The courts have held that this is an extreme remedy:
[28] The other error of law made by the Deputy Judge was that he struck the appellant’s claim and defence to the respondents’ claim as a remedy of first resort without accepting the appellant’s offer to cure the default by payment of the costs. As stated by Epstein J.A. for the Court of Appeal for Ontario in Kooagstani v. Mahmood, 2015 ONCA 56:
[54] Notwithstanding the legitimate concerns raised before Spence J., my difficulty with his decision to strike the appellants’ defence is that he failed to apply the principles relevant to such a request, particularly those set out by this Court in Bell ExpressVu Limited Partnership v. Torroni (2009), 2009 ONCA 85 (CanLII), 94 O.R. (3d) 614 … [where] at para. 35, the majority identified striking out a defence as a severe remedy and made it clear that it should generally not be imposed as a remedy of first resort. The defaulting party should, at least, be provided with an opportunity to cure the default. [Emphasis added]

[55] Such was not done in this case.
[29] I agree with Mr. Gray that for orders of the court to have any meaning they must be enforced. The law, however, is clear that a decision to strike a claim or a defence to a claim is a severe remedy only available for repeated breaches and not to be imposed as a remedy of first resort and not without providing an opportunity to the defaulting party to cure.

5. Transfer, Merger and Joinder

(a) Overview

Properly structuring a lawsuit, naming all the right parties and locating it in the right court can be complicated and sometimes require correction. Sometimes parties are not sure which court the matter should be in (thus requiring "transfer" to another court), sometimes they bring the same case in more than one court (requiring "merger"), and sometimes they do not include all the correct parties or issues in a lawsuit (requiring "joinder" - the adding of parties or issues to the proceeding).

(b) Transfer to Another Court

The Superior Court Registrar may transfer a proceeding to the Small Claims Court if so required by a party and on consent of all parties filed before trial if the matter is within the Small Claims court remedial jurisdiction (see Ch.3: "Jurisdiction") [CJA s.23(2)]. Further, any court (ie. judge) may transfer a case to the proper court if it is started in the wrong court [CJA s.110], so a Small Claims case can also be trnsferred upwards to the Superior Court with it's unlimited monetary jurisdiction.
Case Note:
In Langenfeld v HMQ (Div Ct, 2015), the court commented as follows on the procedure to be used when transferring a Small Claims case to the Superior Court [other than by way or requisition and consent under CJA 23(2)]:
[4] I will say that it is not clear to me how the moving party was able to seek his relief by way of motion as opposed to by way of application. There was no existing proceeding in the Superior Court of Justice. Rather, as best as I can determine, it seems that the moving party simply brought a motion in the Superior Court of Justice using the Small Claims Court file number. Rightly or wrongly, I understand that this is the process that the court administrators permit for the purposes of seeking this form of relief.
Given the uncertainty on the issue, I would suggest that anyone considering such a transfer inquire of the Superior Court Registrar beforehand.
Once transferred the proceeding shall be treated and titled as though it were properly started in the new court [CJA s.23(3), 110].

Reasons for transferring a case to a higher court are not limited to monetary jurisdiction issues, but can include complexity of the case and the need for the procedures available in the higher court such as discovery, cross-examination on affidavits and medical examinations. In Vigna v. Toronto Stock Exchange [1998] OJ #4924 (QL) (Div Ct) the Divisional Court transferred a Small Claims proceeding to the (now) Superior Court without the consent of the plaintiff, who cited s.107(2) of the Courts of Justice Act. As discussed below, s.107(2) authorizes transfer of cases in different courts as part of a larger effort to merge separate proceedings with common issues. The court granted the transfer citing s.138 of the CJA (avoiding a multiplicity of proceedings; discussed below), the complexity of the issues, the need for procedures (ie. discovery) adequate to deal with the case - and that several other proceedings by other parties dealing the issues were already afoot in the Superior Court where certification as a class action was being sought. Section 107 was avoided as the particular plaintiff had only one case filed, thus avoiding the need for merger.

In the case of Autometric Autobody Inc. v. High Performance Coatings Inc. (Div Ct, 2014), the Divisional Court allowed an appeal of a transfer from Small Claims to Superior Court when the motion judge below didn't consider the appropriate Vigna factors for such a transfer:
[8] In Vigna this Court described the inquiry a motions judge must make when considering whether to exercise the Court’s inherent jurisdiction to transfer a Small Claims Court action to the Superior Court:
We do not mean it to be taken that a transfer should be made in every case where it is requested. It is important for the court to scrutinize the issues raised where such a request is made to determine whether those issues are capable of being justly and fairly resolved by the procedures available in Small Claims Court. In many if not most cases the Small Claims Court procedures will suffice. This particular case is, in our view, one of the exceptions where the issues raised are of such a nature and complexity that the available procedures are insufficient for their just and fair determination on the merits.[3]
[9] In the present case, the motions judge did not make the inquiry directed by this Court in the Vigna case. Instead, the motions judge focused only on whether the transfer of the SCC Claim would prejudice HPC. I conclude, with respect, that the motions judge exercised the discretion which she enjoyed as a matter of inherent jurisdiction on wrong principles and thereby committed a reviewable error. The motions judge failed to inquire whether the issues raised in the SCC Claim and Counterclaim were capable of being justly and fairly resolved by the procedures available in the Small Claims Court.
In Alexandrov v Csanyi (Ont Div Ct, 2009) the court noted that two factors relevant in allowing transfers to and from different court levels are whether the already-filed matter is now past a limitation period, and whether the request is based on circumstances changing due to the arising of new facts. Where a limitation period is missed, transfer is indicated, but otherwise it is practically easier and more affordable for all concerned for the party seeking the transfer to withdraw their action in the first court and recommence it in the second. The arising of new facts as well goes in favour of transfer if of course the new facts change the original basis of the claim and thereby indicate a different choice of court.

(c) Merger
Terminology Note:
The merging of two or more cases into one is often referred to as "consolidation". To avoid confusion with the 'consolidation' of judgments for the purposes of payment, discussed in the chapter: "Collection" - when referring to the combining of proceedings before judgment (as here) I use the term "merger".
It is a general principle of adjudication that multiple proceedings are discouraged [CJA s.138]. This is just efficient and common sense.

Thus if two or more cases in different courts involve common questions of law or fact, claim relief arising out of the same event/s, or for any other reason ought to be 'merged', the court - on motion of a party to the Superior Court of Ontario (NOT to the Small Claims Court) - may order the merger of the multiple proceedings [CJA s.107]. Practically this involves both a transfer of at least one proceeding to the proper court (which normally will be the one where all the matters can be heard and remedies granted), and a merging of the two or more cases which are now in that court.

A party who continues with more than one proceeding respecting the same damages may, even if successful, only receive an award of costs in the first successful proceeding, unless the court feels that the multiple proceedings were reasonable in the circumstances [CJA s.139(2)]. One situation in which multiple proceedings may be justified (at least for a while) is where there are uncertainties as to which forum has full jurisdiction over the subject-matter and remedies involved. This problem arises most often with competing administrative tribunals (see the Ch.3

Merged cases may be ordered by the motions judge to be heard together, or one after another (though this may be reversed by the trial judge [CJA s.107(7)]. Sometimes merging claims requires an order asserting a counter-claim within the merged proceeding. For example, assume A sues B in Superior Court for $50,000, and B sues A in Small Claims Court for $25,000 on the basis of the same events. A logical merger of this situation would be to transfer the Small Claims case to the Superior Court action (which has jurisdiction to hear claims for over $25,000), and an order asserting the $25,000 claim as a counter-claim within the Superior Court action.

Note though that when an order for merger of cases is involved - a Small Claims Court claim may not be transferred to the higher court, nor may it be converted to a counterclaim in the higher court - without the consent of the Small Claims court claimant [CJA s.107(2)(3)]. Compare this to the Vigna case discussed above, which ordered transfer over the wishes of the plaintiff, but only where there was no merger involved.

Another way for courts to deal with multiple proceedings involving similar facts and law is to stay (suspend) one or more of them until the other case is resolved. This would likely be used when the outcome of the stayed case/s would be effected by the outcome of the case that is allowed to go ahead. An example of this would be where a jurisdictional issue over the subject matter has arisen in a higher court or a tribunal, and the Small Claims court needs to know the outcome of that issue to determine its own jurisdiction. Generally courts will not order stays simply for the convenience of the parties, but will wait until they are necessary.

Notice that by s.107 merger is only initiated by motion of a party, and not by the court's own motion [though arguably such authority may be found in the general authority of R1.03(2)]. However, failure of a plaintiff to seek to merge actions where appropriate may result in the plaintiff - even if successful - being denied a costs award in the excess actions [CJA s.139(2)].

Court orders of merger may include terms and directions from the Superior Court to the "new" court regarding procedure, such as dispensing with any superflous notice requirements, listing the "new" case for trial, or accelerating the trial date [CJA

(d) Joinder

Another aspect of the general principle that multiple proceedings are discouraged CJA s.138], is that of "joinder". The concept of "joinder" is related to that of merger, but while merger relates to combining related "proceedings" between different courts, "joinder" relates to adding parties (and less often claims) to a proceeding already in the court.

While the Small Claims rules - unlike the more extensive "Rules of Civil Procedure" which apply to the higher courts - do not set out detailed rules for joinder, the Small Claims court is given express discretion in a settlement conference to order "joinder of parties" [R13.03(3)]. Similarly, while the Small Claims Rules are silent as to joinder of claims, the "Rules of Civil Procedure" which govern the procedure in the Superior Court do expressly consider this. As such it would appear that the general jurisdiction provisions of the Small Claims court are broad enough to encompass authority to join unpleaded claims and issues to a proceeding [R1.03(2)].
There are now extensive new (01 July 2006) rules governing "adding, deleting or substituting a party" "on consent" (see Ch.11, s.11 "Motions and Procedural Changes: Procedural Changes on Consent").
Joinder is a very flexible concept. Basically whenever the court is of a mind to have all parties (and issues) involved in related transactions present in the court, they can "join" them. The court when joining parties will "locate" them as to what kind of party they are - typically as a defendant, but the court can even make them a plaintiff. Any joinder motion should of course involve service of the motion on the prospective new parties.

A typical example of necessary joinder would be where one co-owner of property sues someone for damages to the property. The court would want the other co-owner to be joined as a plaintiff to ensure that the legal interests of all involved are properly heard. Similarly, a person not presently a party to a proceeding who may be liable (jointly or otherwise) may be joined as a defendant or "third party" (see the chapter: "Parties") [Negligence Act, s.5]. "Joint" liability is where two or more defendants are found liable for the assessed damages, and the plaintiff may collect any part - or all - of the award from EITHER joint defendant (basically, from whoever they can catch).

The chapter on "Parties" addresses some situations where parties may be "jointly" liable for damages. These can include partners within a partnership, situations where two or more parties are responsible for harm caused to a plaintiff, and others. Obviously these are prime situations where joinder should be considered.

Note that judgment or settlement against one joint defendant does not bar continued pursuit against any other joint defendants in the same or separate proceedings [CJA s.139(1)].

The 'flip side' of the need to join a party or an issue is where a party or issue is improperly added to a proceeding, sometimes called "misjoinder". In such a case it is usually left to the parties "mis-joined" to move for dismissal of the case against them. In the case of "mis-joined" issues the court will normally either strike these as irrelevant (if they do not constitute a cause of action), or order that unrelated claim issues be split into a separate proceeding.

There are numerous situations in which the issue of joinder may arise - just understand that the goal is to allocate liability fairly and fully (ie. finally without further proceedings), and to allow all involved parties to participate fully. Use common sense.

The rule governing joinder in the "Rules of Civil Procedure", which governs procedure in the Superior Court of Ontario, may be instructive as to the circumstances in which joinder can arise and how courts treat it. I link it here for reference:

Rules of Civil Procedure, R.5

6. Constitutional Questions

(a) Overview

Although unusual in civil actions, and more unusual in small claims court, it sometimes happens that constitutional issues arise in a lawsuit. Where this happens the party raising the constitutional issue must provide special "Notice of Constitutional Question" to the other parties, and to the Attorney-Generals of both Canada and Ontario ("A-Gs").

The A-G's may then, if they choose, participate in the proceeding as a party, calling evidence and making legal submissions on the constitutional questions (alone). While Notice of Constituional Question is always required, practically the AG will only actively intervene if important constitutional issues or governmental interests are involved. They will advise you if they plan to participate or not.

(b) Examples of Constitutional Issues

Canada, as a federal country, divides governmental responsibility between the federal and provincial governments ("division of powers"). There are further legal allocations relating to natives, some individual provinces, language rights and numerous other issues. Where a lawsuit involves an allegation that a particular Act or regulation, or the application of the Act or regulation, is invalid on "division of powers" or any other constitutional grounds, then Notice of Constitutional Question may be required [CJA s.109].

As well, the Canadian Charter of Rights and Freedoms is also part of the Canadian constitution, granting individual rights and freedoms to citizens against government authority and actions. A lawsuit alleging Charter violations is also known as a "Charter tort", usually for monetary damages and it is allowed for under s.24(1) of the Charter:
Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.
On rarer occasions the application of "common law" (ie. judge-made law) may also invoke constitutional issues. Challenges to the common law also require Notice of Constitutional Question.

Just because an issue in Small Claims court is constitutional it does not expand the remedial jurisdiction of the court. Practically, the only constitutional remedies available in small claims court are damages for acts or omissions of an arm of the executive government. Rarely an order of recovery of possession of personal property might be available as well (see the chapter "Jurisdiction").

While it is beyond the scope of the present work to fully explore what types of alleged Charter violations may justify a Charter tort, generally it is acts or omissions of the executive government (eg. the bureaucracy or police), not legislative Acts of the Parliament or provincial legislature, that will successfully ground a Charter damages claim. This does not mean that unconstitutional laws are immune from court review, just that they should be advanced by way of "applications" (rarely not actions) for "declarations" of invalidity. Such remedies are not available in small claims court, and must be pursued in the Superior Court of Ontario. In very unusual circumstances Charter injunctions (court orders effecting behaviour) may be available, but they are also beyond the jurisdiction of the small claims court.

(c) Notice of Constitutional Question

Notice of Constitutional Question shall be served on all parties and the A-Gs, and filed with the court, "as soon as the circumstances requiring it become known and, in any event, at least fifteen days before the day on which the question is to be argued, unless the court orders otherwise". If Notice is served late, you should expect the court to be both annoyed (which can result in negative cost awards) and to either adjourn the proceeding to give the A-Gs time to consider the matter - OR in some cases to bar the late a party from raising constitutional issues at all. In the case of a bar on constitutional issue the court would still continue to hear the case on non-constitutional issues, if any [CJA s.109(2)].

RCP Form 4F: Notice of Constitutional Question

7. Money Paid Into and Out of Court

(a) Overview

. General

In various circumstances either the court may order a party to pay money into court, or a party may be required to do so by some statute or rule. Later on the court may order such monies paid out as it sees fit. This section explains the procedures for such payments.

For example, any money payable to a "party under disability" [see Ch.4, s.2: "Parties: Persons Under a Disability"] under an order or a settlement shall be paid into court, unless the court orders otherwise, and shall afterwards be paid out or otherwise disposed of as ordered by the court [R4.08]. As well, payment into court of settlement funds is authorized under R14.05(2).

There are other cases where this may be required as well, as the Small Claims Court has a general jurisdiction to order monies paid into court where circumstances warrant [R1.03(2)].

In any case where money is paid into or out of court, either under a court order or under some statutory or rule authority, readers should pay close attention to any specific requirements that those authorities establish with respect to such transactions. That is, read the statute, rule or court order closely for any terms or conditions that may apply in addition to those that are set out in this section.

Where the money paid into court is in the nature of security for an obligation, it appears that the bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance is sufficient substitute for a money payment, unless the court orders otherwise [CJA 115]. The insurance company effectively guarantees the payment of the money if it is required, just as in the case of a criminal bail bond.

. Request Form

All references in this section to "Request" refer to this form:

Request to Pay Money Into or Out of Court

. Exceptions

The rules explained in this section apply to payments into and out of court, except where money is paid or is to be paid into court under the following circumstances [R22.02(a-c)]:
  • Admission and Terms of Payment 'Defence'

    These are admissions of liability in a Defence, and in a related proposal or Order for terms of payment [see Ch.8, s.4(c)]. This exception is apparently to prevent the use of these procedures for numerous small 'term payment' transactions.

  • Settlements

    This refers to offers to settle a claim in return for the payment of money.

    I find this a problematic exception. Compare it with the provisions of R14.05(2,3) [addressed in Ch.13, s.2], which expressly allows for payment into court where the settlement offer expressly stipulates that as a term. I am unaware of how this apparent conflict is resolved, and welcome anyone's comments on it. The most rational interpretation that occurs to me is that these procedures do apply where the offer made expressly requires payment into court, but not otherwise (ie. as an after-the-fact convenience to the parties).

  • Collection proceedings.

    This provision is to prevent the use of these procedures as an aspect of collection [see Ch.16].
    Note 1 re Exceptions:
    If a situation comes under one of these exceptions, it would appear to preclude use of these procedures even if the payment requirement is made under a court order (that is, it would prohibit the making of such a court order). However the court does have a general jurisdiction under R2.02 to "dispense with compliance with any rule at any time", and so can avoid this result.
    Note 2 re Exceptions:
    Rule 22.02(a-c) only states that the payment into/out of court procedures explained in this section do not apply in these excepted circumstances, but they do not expressly prohibit payment into or out of court in those circumstances. This suggest that other, older practices regarding payment into court are preserved and continue. However the 'Request' form (linked above) does not accomodate payment into or out of court except under express statutory or rule authority, or under a court order. Therefore the best conclusion seems to be that the court's policy is that money may not be paid into court in these excepted circumstances, unless of course the court exercises it's R2.02 discretion to dispense with Rule compliance (as per Note 1).
    (b) Payment Into Court

    . Documents to be Filed

    Where payment into court is required under a statute or rule, a written Request (see Section A of the linked form above) to do so may be filed either with the court clerk where the case is filed, or with the Accountant of the Superior Court of Justice (hereafter "Accountant"). The Request must cite the statutory provision or rule which requires it [R22.03(2)1].

    On receipt of the Request, the court clerk or Accountant, as the case may be, shall issue to the party a 'Direction' to a bank (specifying an account number) which directs the bank to receive the money required to be paid [R22.03(3)]. Thereafter though, if the request was filed with the court clerk, the clerk shall forward the request to the Accountant [R22.03(4)].

    The party shall take the Direction to the specified bank and pay funds into it in accordance with the Direction [R22.03(5)]. The bank shall issue the party a receipt for the payment, and immediately send a copy of the receipt to the Accountant [R22.03(6)].

    Where payment is required under a court order, the procedures are the same as above except that the Request will refer to the terms of the court order, and a sealed (by the court) copy of the court order must be included with the Request [R22.03(2)2].

    . By Mail to the Accountant of the Superior Court

    Alternatively, the party may mail the Request (being sure to include their name and mailing address, and with a copy of the court order if applicable) to the Accountant, with funds (payable to the "Accountant of the Superior Court of Justice") enclosed. The Accountant shall then forward a receipt back to the party [R22.03(7,8)].

    The Accountant's address is:
    The Accountant of the Superior Court of Justice
    595 Bay St, 8th Floor
    Toronto ON M5G2M6

    Litigant Inquiries: 416-314-8692
    . Receipt to be Filed and Served on All Parties

    On receiving the receipt for the payment (either from the bank or from the Accountant as referred to above) the party shall send all other parties a copy and file a copy with the court. Note that the term used in this rule is "send" rather than "serve", so any method of sending that achieves delivery should suffice and no affidavit of service should be required to file the receipt with the court [R22.03(9)].

    (c) Payment Out of Court

    . Court Order Required

    Money held by the court may only be paid out after a court order has been issued to do so [R22.04(1)]. Such orders are normally obtained on formal motion to the court and must be supported by an affidavit in Form 4B [R4.08(3)]:

    Form 4B
    Otherwise procedures for such motions are addressed in Ch.12: "Motions and Procedural Changes".


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Last modified: 12-01-23
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