The 2010 Amendments To The Ontario Rules Of Civil Procedure: Small Claims Court, Simplified Procedure And Proportionality

Introduction

On January 1, 2010 significant amendments were made to the Ontario Rules of Civil Procedure (the "Rules"). The amendments were made on the recommendations of Justice Coulter A. Osborne, Q.C., as set out in his report titled "Civil Justice Reform Project: Summary of Findings and Recommendations" (the "Osborne Report"),2 and in order to address the ongoing concerns of the bench, bar and public respecting access to civil justice, cost and delay of litigation. The recommendations resulted in the most significant amendments to the Rules since 1996.3 The amendments range from an increase to the monetary jurisdictions of the Small Claims Court and Rule 76 Simplified Procedure regime, to the requirement that parties confer and agree on a "discovery plan" before they exchange evidence, to a significant overhaul to the procedures available on motions for summary judgment. Finally, the amendments codify the concept and requirement of "proportionality" in civil litigation.

Just over a year has passed since the amendments to the Rules. This paper will discuss the changes and cases that have arisen out of the amendments that relate to the monetary jurisdiction of the Small Claims Court, the amendments to the Simplified Procedure regime, and proportionality.

The Small Claims Court

The Small Claims Court is widely known as the "people's court". Prior to April 2001, the monetary jurisdiction or limit on matters to be dealt with in the Small Claims Court was $6,000. In April 2001, the monetary limit was increased to $10,000. On January 1, 2010, the monetary limit of the Small Claims Court more than doubled to $25,000. The Small Claims Court is often praised as straightforward and hospitable to unrepresented litigants, and capable of dispensing justice quickly.4

In the Osborne Report, Justice Osborne recommended the increase to the monetary jurisdiction of the Small Claims Court to $25,000, on the basis that that is the same monetary jurisdiction of small claims Courts in British Columbia, Alberta, the Yukon and Nova Scotia, as well as Saskatchewan, which has recently increased its monetary jurisdiction to $20,000.5

The increase in the monetary jurisdiction of the Small Claims Court was intended to address concerns that cases were not being pursued by potential litigants because the amount of the claims were in excess of the $10,000 monetary jurisdiction of the Small Claims Court, but the higher Court fees and complexity of the Superior Court of Justice made it prohibitive for some litigants.6

What is interesting about the change to the Court's monetary jurisdiction is that Justice Osborne also recommended that the increase be staged - with an immediate increase to $15,000 and the increase to $25,000 to be implemented within two years.7 The basis for the recommendation was volume: Justice Osborne reported that in 2005-2006, the Small Claims Court in Ontario processed over 75,000 new cases. By comparison, in 2005-2006, in the Ontario Superior Court of Justice approximately 63,250 new proceedings were commenced.8 Further, Justice Osborne reported that of those cases in the Superior Court, 6,500 of them sought amounts between $10,001 and $25,000.9 Thus, Justice Osborne estimated that with an increase to the monetary jurisdiction of the Small Claims Court, approximately 6,000 cases would be transferred from the Superior Court to the Small Claims Court, and that that volume of new cases coming into the Small Claims Court all at once would cripple its resources. Nevertheless, that particular recommendation was not implemented, and on January 1, 2010 the Small Claim Court jurisdiction increased from $10,000 to $25,000.

In its Court Services Division Annual Report for 2009-2010, the Ministry of the Attorney General reported that in 2009-2010 there were 97,000 new proceedings issued in the Ontario Superior Court of Justice, which represents a 23% increase since 2005-2006.10 Further, proceedings commenced in the Small Claims Court represent 40% of that figure, meaning that 64,250 new proceedings were commenced in the Small Claims Court,11 which is actually a decrease from the 2005-2006 numbers considered by Justice Osborne

Nevertheless, the increase in the Small Claims Court's monetary jurisdiction has been described as a success. On January 5, 2011, the Office of the Attorney General reported that the Civil Justice Reform Project was bringing Ontarians access to a faster and more affordable justice system. Specifically, it reported:

...in 2010, the Superior Court of Justice dealt with 11,652 fewer civil actions, a 17 per cent decrease from 2009, and the Small Claims Court dealt with 6,337 more actions, an 11 per cent increase from 2009. With thousands more civil actions heard in Small Claims Court in 2010 than in 2009, and thousands fewer heard in the Superior Court of Justice during the same period, cases moved from the slower, more expensive system to one that is faster and more affordable. This means that more people settled their disputes faster and at less cost.12

Justice Osborne observed that the increase in the Small Claims Court's monetary jurisdiction may involve more personal injury cases being brought in that Court. Further, some commentators have specifically noted that the increase to the Small Claims Court's monetary jurisdiction has resulted in an increase in wrongful dismissal actions being brought in the Small Claims Court.13

Another change to the Small Claims Court Rules related to acceptable manners of service. Under the old regime, a plaintiff could serve their statement of claim by regular mail, but after January 1, 2010, a plaintiff is required to serve by registered mail or courier and obtain verified receipt by the defendant. This amendment has been criticized for providing defendants with more opportunities to evade service.14

One of the interesting cases of last year which related to procedures in the Small Claims Court was Van de Vrande v. Butkowsky.15 In that case, the defendant brought a motion for summary judgment under the Small Claims Court Rules, which was granted by the trial Judge. The plaintiff appealed and the Divisional Court set aside the Order, analogizing to the previous Rule 20 respecting summary judgment, and finding that the Judge could not make findings of fact on a motion for summary judgment. The Court of Appeal restored the finding of the trial Judge and dismissed the claim, noting that there was no Rule 20 equivalent in the Small Claims Court Rules, nor should one be read in. Rather, the Court found that Rule 12.02 of the Small Claim Court Rules allowed a party to bring a motion to strike out a document, including a pleading, which it said was more akin to a Rule 21 motion. Thus, the Court of Appeal found that Rule 12 of the Small Claim Court Rules fit conceptually somewhere between Rule 20 and Rule 21 of the Rules. The Court also noted that such motions are often brought by self-represented litigants, who lack the training of counsel, and said the test applied on such motions should reflect that reality to avoid the complexities of a traditional Rule 20 motion for summary judgment. The Court noted as follows:

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."16

The findings in Van de Vrande were considered in Toronto Dominion Bank v. Thind et al.17 In that case, the plaintiff commenced three separate claims in the Ontario Superior Court claiming a total amount of $22,000. The defendants moved to transfer the actions to the Small Claims Court, and the plaintiff brought a cross‐motion for summary judgment on the basis that the defendants did not dispute that the amounts claimed were owed to it. The Court granted the motion for summary judgment, noting that based on the findings in Van de Vrande, no procedure corresponding to summary judgment was available in the Small Claims Court. The decision in Toronto Dominion Bank also raises two related points, respecting transfer of cases to the Small Claims Court and awards of costs when a party has commenced their claim in the "wrong" Court, which I discuss below.

While the increase in the Small Claims Court's monetary jurisdiction creates a forum for more cases of a higher value to be heard, it may be too early to say with any certainty how the resources of the Court are handling the increase in volume and whether the increase in cases going into the Small Claims Court has impacted the speed in which those cases are resolved. Two other cautions respecting Small Claims Court cases should be noted: first, service of a statement of claim must now be made personally on a defendant, and second, the summary judgment procedure available under Rule 20 is not available at the Small Claims Court. It may be that the process contemplated by the Court of Appeal in Van de Vrande is a more relaxed process, but based on the discussion in Toronto Dominion Bank, the traditional concept of summary judgment may be still more appropriate for certain cases.

The Simplified Procedure (Rule 76) Regime

Simplified Procedure or Rule 76 was introduced in Ontario as a pilot project in 1996, with a monetary jurisdiction of $25,000. Since that time, Simplified Procedure has become a permanent fixture in the...