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Small Claims Court - Monetary Jurisdiction. RW Stick Holdings Inc. v. Canadian Flatbeds Ltd [IMPORTANT re nature of declarations]
In RW Stick Holdings Inc. v. Canadian Flatbeds Ltd (Ont Div Ct, 2026) the Ontario Divisional Court dismissed a Small Claims Court appeal, this brought against a judgment "for $35,000 plus interest and costs, for breach of a lease agreement between the parties".
The court considers the (accepted) law that the Small Claims Court cannot grant declarations, here while attempting to explain how the appellant's argument may have misperceived the underlying issue as one of normal fact-finding:Issue No. 2: Did the Deputy Judge exceed her jurisdiction by granting declaratory relief, or in the alternative, by granting relief in a matter concerning real property rights?
Jurisdiction of the Small Claims Court
[37] The jurisdiction of the Small Claims Court is set out in s. 23(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as follows:Jurisdiction
23(1) The Small Claims Court,
(a) has jurisdiction in any action for the payment of money where the amount claimed does not exceed the prescribed amount exclusive of interest and costs; and
(b) has jurisdiction in any action for the recovery of possession of personal property where the value of the property does not exceed the prescribed amount. [38] There is no question that a deputy judge of the Small Claims Court lacks the jurisdiction to grant declaratory relief. Nor does a deputy judge have the jurisdiction to grant relief regarding an interest in real property, other than monetary damages.
[39] However, RW’s Small Claims Court Claim did not seek declaratory relief or relief in regard to an interest in real property. Nor did the reasons of the Deputy Judge purport to grant such relief. Rather, RW claimed and the Deputy Judge granted relief in the form of monetary damages only. As set out below, that relief came within the jurisdictional bounds of the Small Claims Court.
The Deputy Judge Did Not Grant Declaratory Relief
[40] The reasons of the Deputy Judge do not even mention the words “declare” or “declaration”. Rather, the Deputy Judge granted judgment in favour of RW for the Small Claims Court’s $35,000 limit, plus interest and costs.
[41] Nonetheless, CFL appears to conflate the idea of a declaration with a finding of fact. In Harrison v. Antonopoulos, 2002 CanLII 28725 (ON SC), 62 O.R. (3d) 463 (S.C.J.), at paras. 25-28, Lang J. (as she then was) points out that every civil proceeding requires findings of fact, which she describes as factual declarations. Those findings are not a form a declaratory relief.
[42] Lang J. writes:25 When the court exercises its original jurisdiction between private parties, a "declaration" usually refers to declarations or findings of fact naturally arising in the course of a fact-finding exercise. It would appear that courts have been increasingly willing to incorporate factual declarations into judgments to assist parties with respect to issues of continuing liability and to give them the right to execution with respect to an ongoing right. The original jurisdiction of the court to make declarations of fact appears to have been accepted in Coombe.
26 It is important to know the purpose of the question because law and equity provide different types of declarations. Every action, by its nature, requires factual declarations. In a tort action, such as the one accompanying this claim for accident benefits, the plaintiff seeks factual findings to establish the defendant's liability. She wants the court to hold that the defendant breached the applicable standard of care by making findings that he drove his motor vehicle into the plaintiff while she was crossing the street at a marked crosswalk. While these findings might be phrased as "declarations", they are more familiarly known as findings of fact. That findings of fact are required does not, however, mean that "declaratory relief" is necessarily being requested. The distinction between declarations of fact and declaratory relief was noted by Reilly J. in Ramm v. Sun Life Assurance Co. of Canada (1999), 1999 CanLII 14784 (ON SC), 43 O.R. (3d) 652 (Gen. Div.), where he stated that declarations of fact "will form part of the judgment in any civil case: the defendant was (or was not) negligent, the statement was (or was not) libelous. What then is the difference between a declaration of fact and declaratory relief?" (p. 656 O.R.)
27 In the recently released Zamir & Woolf: The Declaratory Judgment, 3rd ed. (London: Sweet & Maxwell, 2002), authors Lord Woolf and Jeremy Woolf provide a useful description of declaratory judgments. In accordance with the various authorities dealing with this issue, the authors note that such a judgment "is a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs" (para. 1.01). They helpfully go on to contrast a declaratory judgment with an executory or coercive one. A declaratory judgment is restricted to a declaration of the parties' rights. It contains no provision ordering any party to do anything. In a coercive judgment, "the courts determine the respective rights of the parties and then order the defendant to act in a certain way, for example, by an order to pay damages or to refrain from interfering with the claimant's rights ...". A coercive judgment, if ignored, may be enforced through levying execution (para. 1.02). Declaratory judgments are also distinguished from "divestive" judgments, which establish new rights rather than determine existing ones, for example, divorce judgments. Finally, and also distinct from declaratory judgments, are those declarations which "declare not only the rights of the plaintiff, but also the remedy to which he [or she] is entitled" (para. 1.03). Although remedial entitlement is a component of this last type of judgment, such a declaration lacks an enforcement mechanism.
28 Declaratory relief, being only a declaration of parties' rights, is mainly sought in commercial matters to help parties define their rights, and as a means to settle matters amicably where reasonable people would otherwise disagree on their mutual obligations and wish to resolve the matter in order to avoid future disputes. In other words, a cause of action need not be extant at the time a party requests declaratory relief. Because declaratory relief is in essence a request for an advance ruling, courts have discretion to refuse such relief. This is the type of relief contemplated by s. 108(2) of the CJA - a declaration of parties' rights with no coercive effect or remedial entitlement. [43] Put simply, the Small Claims Court cannot make any determination regarding any claim before it, whether in tort or breach of contract, or otherwise, unless it makes findings of fact. There is a no difference between the findings of fact in this case and those in, for example, innumerable other Small Claims Court breach of contract decisions over the years.
The Deputy Judge Granted No Relief in a Matter Concerning Real Property Rights
[44] In addition, the Deputy Judge made no order granting relief regarding real property rights. Rather, she granted damages for CFL’s breach of contract; in this case, the Final Lease. Nothing in the reasons or order of the Deputy Judge purported to grant either party any real property rights or change any such rights. Rather, the Deputy Judge property considered the real property rights of the parties in determining that CFL owed money to RW arising out of its breach of contract.
[45] The point was made some time ago in the British Columbia Provincial Court decision, Lou Guidi Construction Ltd. V. Fedick, [1994] B.C.J. No. 2409, 1994 CarswellBC 2818 (P.C.). There, Stansfield J. faced a jurisdictional argument similar to the one propounded by CFL, in a suit regarding a breach of an agreement of purchase and sale for real property.
[46] At para. 18, Stansfield J. found that “the focus of the jurisdictional inquiry is the nature of the relief sought, not whether the matter touches upon certain issues.” Then at para. 22, Stansfield J. determined:In my view there now is nothing precluding a judge of this court considering interests in land in determining whether a claimant should succeed in a claim for debt or damages so long as no remedy purports in any way to affect title to or other interest in land, and so long as no statute precludes the particular consideration .... [47] At para. 23, Stansfield J. concluded:In this case the property in issue has been sold to a third party, and title conveyed to that person. I cannot imagine any determination which might be undertaken in the course of deciding whether the claimant is entitled to retain the deposit, or to be awarded damages in respect of the alleged deficiency, which could affect the title to land. [48] While that decision was based on the jurisdiction granted to the British Columbia Small Claims Court by that province’s Small Claims Act, R.S.B.C. 1996, c 430, s. 3, that provision’s grant of jurisdiction is similar to that granted by s. 23(1) of the Courts of Justice Act. The British Columbia provision reads as follows:3(1) The Provincial Court has jurisdiction in a claim for
(a) debt or damages,
(b) recovery of personal property,
(c) specific performance of an agreement relating to personal property or services, or
(d) relief from opposing claims to personal property
if the amount claimed or the value of the personal property or services is equal to or less than an amount that is prescribed by regulation, excluding interest and costs.
(2) The Provincial Court does not have jurisdiction in a claim for libel, slander or malicious prosecution. [49] The reasoning of Stansfield J. in Lou Guidi was adopted by the Supreme Court of Yukon in two decisions involving claims for damages related to real property: Whitehorse (City) v. Cunning, 2009 YKSC 48, at paras. 76-86, and Young v. Beacon, 2010 YKSC 67, at para. 18.
Conclusion Regarding Jurisdictional Issues
[50] Nothing in the wording of s. 23 of the Courts of Justice Act, which sets out the jurisdiction of the Small Claims Court, prohibits that court from awarding the relief granted by the Deputy Judge below. . 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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