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Litigation Opinions
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Small Claims Court - Monetary Jurisdiction

. Sloane Capital Corp. v. Beacon Holdings Ltd.

In Sloane Capital Corp. v. Beacon Holdings Ltd. (Div Court, 2023) the Divisional Court held that the $35k jurisdictional limit of the Small Claims Court turned on contracts, not invoices - and that "(p)laintiffs are not allowed to litigate in installments":
[36] In this case, the question that I have to determine is whether each invoice triggers a separate cause of action, which is a question of contractual interpretation. If the answer to that question is yes, then the Deputy Judge did not exceed his jurisdiction. If the answer to that question is no, then I must consider whether the Respondent waived its right to enforce the remaining invoices. These are questions of mixed fact and law and, as a result, some deference is owed to the Deputy Judge’s findings. Creston Moly Corp. v. Sattva Capital Corp, 2014 SCC 53, [[2014] 2 S.C.R. 633.

[37] However, as a matter of law, there is no dispute that the jurisdiction of the Small Claims Court is limited to $35,000.00. Section 23(1) of the Courts of Justice Act, R.S.O. 1990 c. C.43 states that the jurisdiction of the Court to provide monetary relief is limited to the prescribed amounts. Section 1 of Regulation 626/00 states that the maximum amount of a claim in the Small Claims Court is $35,000.00 and the maximum amount of a claim over which a Deputy Judge may preside is $35,000.00. These statutory provisions must inform my determinations in respect of this appeal.

[38] The Respondent relies on the Annex Publishing decision to support its argument that the Deputy Judge was only adjudicating the question of three invoices and was acting within his jurisdiction. In my view, Annex Publishing is distinguishable and does not support the Respondent’s position in this case.

[39] In Annex Publishing, the Defendant, L&W, published a quarterly magazine and the Plaintiff, Annex, printed it. L&W failed to pay for two separate printings of the magazine and Annex brought two claims for $10,000.00 in the Small Claims Court. One claim was brought in Toronto and the other in Simcoe County. Annex successfully argued that these claims were separate actions as there were separate contracts for each printing of the magazine. That conclusion fits the facts in Annex Publishing, as there was no requirement for L&W to use Annex for the next printing of the magazine simply because they had been used for the last printing. Similarly, there was no requirement for Annex to print the next printing of the magazine simply because they had printed the last one. The two printings that gave rise to the two actions were separate events resulting in s separate contracts. The failure to pay each invoice was a separate cause of action.

[40] The contract in this case is different. There is clearly only one agreement between the parties. The rights to trailer fees arise out of the one agreement, and the trailer fees are calculated based on the terms of the one agreement. The fact that there are separate invoices does not matter. The contractual right to the payments in this case flows from the terms of the contract, which had been entered into years previously. It does not matter that the payments were periodic payments that were not all due at the time that the action was commenced. The payments all arose under the same contract.

[41] Put another way, so long as the Notes were outstanding, the rights of the Respondent to collect trailer fees continued to exist. Unlike the Annex Publishing case, here neither party had to take any further steps to create contractual rights or obligations. The corollary of that fact is the fact that the Respondent must be limited to only one action to enforce its’ rights against the Appellant. Any other conclusion would be both unreasonable and unsupportable.

[42] Rule 6.02 of the Rules states that “a cause of action shall not be divided into two or more actions for the purpose of bringing it within the court’s jurisdiction.” Similarly, at law the Plaintiff must sue for all applicable damages in a single proceeding. Athanassiades v. Lee, [2010] O.J. No. 4605 (Small Claims Ct.) at para. 35. Plaintiffs are not allowed to litigate in installments. Williams v. Kameka, 2009 NSCA 107 at para. 44.

[43] Having determined that all of the Respondent’s rights flow from one contract, it follows that the Respondent was obligated to bring one action to enforce those rights. As a result, either the Respondent waived the entirety of the excess amounts over $35,000.00 that were otherwise owing or the Deputy Judge had no jurisdiction to hear and decide the case.

[44] It was also not open to the Deputy Judge to grant judgment on three invoices and provide declaratory relief that the contract had been breached. Hradecky, supra. See also section 97 of the Courts of Justice Act. The Deputy Judge’s jurisdiction in this case was limited to no more than $35,000.00 for the entirety of the Respondent’s claims for trailer fees.
. Sloane Capital Corp. v. Beacon Holdings Ltd.

In Sloane Capital Corp. v. Beacon Holdings Ltd. (Div Court, 2023) the Divisional Court considered 'waiver' in the context of the Small Claims Court monetary jurisdiction:
[45] This brings me to the issue of waiver. There is no basis in either fact or law to conclude that the Respondent’s intended to waive the excess trailer fees. Mr. Freedman’s statements at trial (as described at paragraph 16, above) should have made it clear that the Respondent was not waiving the amounts payable under the invoices. Even if those statements were not clear, the Deputy Judge had an obligation to determine the intentions of the Respondent and make it clear that the claim was limited to $35,000.00 before he proceeded with the case.

[46] In any event, however, the Deputy Judge’s own findings suggest that he was permitting the Respondent to split its’ case. For example, at the outset of his analysis, the Deputy Judge states, “the claim is for payments due at the time that this claim was commenced.” This statement strongly suggests that the Deputy Judge was treating separate invoices as being separate causes of action. For the reasons set out at paragraph 40, they were not.

[47] As a result, the decision of the Deputy Judge is a nullity and must be set aside. As noted in Annex Publishing (at para. 32):
32 "Cause of action" is an expression that refers to all of the facts necessary to give rise to a claim: see Royal Bank v. Metcalfe (1985), 3 C.P.C. (2d) 228. Where a single cause of action is split in order to bring it to Small Claims Court in parts, the court has no jurisdiction to deal with any of the parts. All of the split-up claims are nullities. A judgment obtained in such a split up claim is also a nullity: Traditional Air Systems Inc. v. Custom Gas Heating Ltd. (1995). 86 O.A.C. 72; [1995) O.J. No. 3039; Maple Lodge Farms Ltd. v. Penny Lane Fruit Market Inc ., [1997] O.J. No. 4401. A claim for the unpaid balance on a running account could be viewed as a single cause of action: see Maple Lodge Farms, above, and Bartor Developments Inc. v. Leon's Furniture Ltd. (1997), 1997 CanLII 997 (ON CA), 103 O.A.C. 314; [1997) O.J. No. 3763.
[48] In this case, the single cause of action was split into two claims to bring it within the jurisdiction of the Small Claims Court. That makes it a nullity, and the decision of the Deputy Judge must be set aside.


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Last modified: 24-05-23
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