New SCOPE Contributor Shawn Gallimore is a lawyer in New Brunswick. He is interested in Ontario’s paralegal licensing scheme and small claims practice.
Gallimore takes a look at a sometimes confusing and seemingly unfair element of small claims matters.
So, the judge in your client’s case made an award based on reasons other than the issues argued at trial. How can that be?
Let us imagine that you are preparing a case for a hearing before a Small Claims court. You have diligently ascertained the facts of the case from your client. You have carefully drafted a statement of claim and related pleadings. In court, you advance the interests of your client with correct arguments, evidence and witness examination.
Now let us imagine that you receive the final decision of the judge, and there is a twist — the judge has made a finding of liability and assigned damages on a basis utterly different than the issues framed in the pleadings and narrowed at trial.
If Only You Had Known…
Whether the decision favours your client or not, you may wonder: Is the judge allowed to do this? Have the tables been turned unfairly or arbitrarily?
It may seem unfair, but there are reasons a Small Claims Court is able to base a decision based on issues and causes of action other than those framed in the pleadings. Small Claims Court differs significantly from Superior Court, where the rules are more stringent.
A case law review sheds light on the distinctions.
May the Small Claims Court grant “alternative” awards?
The leading case on this issue is the case of 936464 Ontario Ltd. v. Mungo Bear Ltd., 2003 CanLII 72356 (ON SC). In Mungo Bear, Justice Heeney clarified the general mission of the Small Claims Court and provided some guidance on the powers of the deputy judge in granting an award.
After a review of the case law of procedural rules in general, Justice Heeney noted that:
“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.”
Justice Heeney’s reasons for decision highlight the fact that the Small Claims Court essentially follows a different policy for the basic resolution of civil disputes than the higher courts.
A Small Claims Court judge could be viewed as similar to an arbitrator or mediator, in that they have leeway to interpret the rules of evidence in setting more akin to dispute resolution.
Civil litigation trials at Superior Court are argued by the parties – represented either by lawyers or by themselves. Plaintiffs and defendants are expected to present the legal arguments, frame the legal issues, conduct the necessary cross-examinations and invoke the necessary case precedents and causes of action to prove their case and entitlement to relief. The judge acts as more of a passive referee, or observer.
In contrast, due to the nature of the Small Claims Court as an alternative forum for resolving disputes, the need for more informal procedures for resolving litigation led to an alternative set of procedural rules for the court.
These Rules of the Small Claims Court have been reiterated in the recent case of Hydro One Networks Inc. v. Yakeley, 2010 ONSC 4770 (CanLII). In Hydro One, the power company sued a homeowner for an unpaid debt. The homeowner in turn filed a defence claim of negligent misstatement, claiming bad advice from the power company.
Justice G.M. Mulligan observed that:
“The plaintiff, which is a large corporation, with an in-house legal department, could have anticipated that these issues would be raised at trial based on the information in the pleading.”
In particular, Justice Mulligan ruled that “There is no magic in the requirement to use the words ‘set off’ in pleadings in Small Claims Court. To require a strict adherence to the rules of pleadings would be contrary to the role of the Small Claims Court in the administration of justice. In my view there was no error in law in applying set off principles based on the evidence which the deputy judge considered and accepted.”
Again, the basic principle here is that a Small Claims Court is not barred from finding a legitimate legal claim, hearing a defence, or making a finding that is based on the evidence presented at trial. This court need not strictly observe of the Rules of Civil Procedure.
To do otherwise would disadvantage self-represented litigants, average citizens who could not present their legal claims without legal training.
Action Auto Leasing & Gallery Inc, 2013 CanLII 57491 (ON SCSM)
Jones v. Tsige, 2012 ONCA 32 (CanLII)
Tang v. Jarrett, 2009 CanLII 13631 (ON SCDC)
Shawn Gallimore is a member of the Law Society of New Brunswick and freelance legal researcher.
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