Choosing the Proper Forum for Small Claims (20:IV)

There are several options for resolving most civil disputes in British Columbia: Alternative Dispute Resolution, specialised tribunals, Small Claims Court, and the Supreme Court of British Columbia. On May 31, 2012, the Civil Resolution Tribunal Act, SBC 2012, c 25 [CRTA] was given Royal Assent and may be proclaimed in force by regulation. Once in force, the Civil Resolution Tribunal will become another option for resolving civil disputes.

Certain claims must be made through administrative tribunals instead of the courts. See, for example, Chapter 9: Employment Law, Chapter 7: Workers’ Compensation, Chapter 8: Employment Insurance, Chapter 19: Landlord and Tenant Law, and Chapter 6: Human Rights.

In order to bring a claim in British Columbia, the court or tribunal must have territorial jurisdiction. If either the subject matter of the claim (e.g., the contract or wrongful act) occurred in British Columbia or the Defendant resides or does business in British Columbia, this may be a sufficient connection for a court or tribunal to assert jurisdiction. It is sometimes unclear whether British Columbia has a sufficient connection to the claim and is the most appropriate forum. If the court’s jurisdiction is not clear, a claimant should obtain legal advice and review applicable case law16.

Where the dispute is contractual, the existence of a “forum selection clause” may provide further jurisdictional difficulties. Forum selection clauses require the adjudication of claims in the named jurisdiction. Such clauses will generally be upheld absent a finding of “strong cause” to hear the matter in the jurisdiction of another court17.

A. Small Claims Court

The Small Claims Court is the civil division of the British Columbia Provincial Court and is designed to accommodate unrepresented parties who do not have legal training. The overriding purpose of the Small Claims Court is to resolve disputes in a “just, speedy, inexpensive, and simple manner.”18 The Court uses simplified forms, procedures, and rules and encourages settlement.

Small Claims Court is a formal court that applies the law. Although the procedures and rules of evidence are slightly relaxed in order to make it more accessible to the public, it is significantly more formal and principled than the courts portrayed in television programmes.

There are three primary considerations when choosing Small Claims Court: the amount claimed, the court’s jurisdiction, and costs.

1. Amount Claimed

Small Claims Court can award a judgment of up to $25,000. A person whose claim exceeds $25,000 may still choose Small Claims Court but must expressly state in the notice of claim or counterclaim that they will abandon the amount necessary to bring their claim or counterclaim within the court’s jurisdiction19. Interest and costs are not included in calculating the $25,000 limit.

A claimant must sue all responsible parties for damages arising from a single event in one claim; the claimant cannot split claims for damages arising out of a single event into multiple claims in an attempt to circumvent the $25,000 limit. If, however, there are multiple events giving rise to a claim, even if closely related, they may be brought in separate actions20. For example, if a contractor issues an invoice for $15,000 at the end of January for work done in January and issues another invoice for $15,000 at the end of February for work done in February and both invoices go unpaid, the contractor may sue on each invoice in a separate claim. Rule 7.1(4) permits certain related claims to be heard together.

Where a defendant has pleaded a set-off (the plaintiff owes the defendant money that should be deducted from their award), contributory negligence (the plaintiff’s negligence also contributed to their loss), or shared liability (there is another party who is also liable fo the same action), the court may consider these defences against the full amount of the claimant’s claim provided that the net judgment does not exceed $25,000. This also applies when a set-off forms the basis for a standalone counterclaim. For example, if the claimant proves a $50,000 claim and the defendant establishes a $25,000 set-off, the claimant will have a net judgment of $25,000. The SCA21 permits the monetary limit to be set by regulation at any amount up to $50,000. Claimants should confirm the current monetary limit prior to filing a claim.

2. Jurisdiction

The Small Claims Court derives its authority from the SCA, the Small Claims Rules, BC Reg 261/93 [SCR], and other acts that expressly confer jurisdiction upon the Provincial Court.

The court has express jurisdiction in claims for:

• debt or damages;
• recovery of personal property;
• specific performance of an agreement relating to personal property or services; or
• relief from opposing claims to personal property.

The court does not have jurisdiction in claims for libel, slander, or malicious prosecution unless such authority is expressly granted in limited circumstances by another statute (e.g., s-s 171(3) of the Business Practices and Consumer Protection Act allows for contraventions of this act to be heard in Provincial Court even if they involve claims for libel or slander22).

The court cannot resolve disputes involving residential tenancy agreements nor can it grant remedies created by statute if there is another dispute resolution mechanism prescribed in the statute. For example, claims for overtime must be claimed through the Employment Standards Branch and not in Small Claims Court. The court has very limited jurisdiction in residential tenancy23, employment24, human rights25, and strata property26 matters.

Other noteworthy areas of law often falling outside the jurisdiction of the Small Claims Division are divorce, trusts, wills (i.e., probate), prerogative writs, and bankruptcy. However, the court may have jurisdiction over cases where these areas of law are involved only circumstantially – where the pith and substance of the case does fall within the court’s jurisdiction27. In AMEX Bank of Canada v Golovatcheva, the claimant alleged that the defendant had committed fraud by running up a debt that she knew she would escape by declaring bankruptcy. The Small Claims court exerted jurisdiction over the issue of fraud.

The Small Claims Court has limited inherent jurisdiction. It cannot grant injunctions nor can it grant declaratory relief; however, subject to the SCA and SCR, the court may make any order or give any direction necessary to achieve the purpose of the SCA and SCR. One should review the SCA and the SCR thoroughly. [See LLC v PG, sub nom. Craig v Gidyk, [1994] BCJ No. 1591 (Prov. Ct.); RK v McBride, [1994] BCJ No. 2791; and Joey Beenz Coffee Bar Ltd. v Di Stasio (cob Neon Sign Writers), 2011 BCPC 375 (CanLII).

3. Costs

The cost to file a claim depends on the amount being claimed. The filing fee is $100 for claims of $3,000 or less and $156 for claims over $3,000. All Small Claims Court fees are listed in Schedule A of the SCR. If a person is unable to afford the court’ s fees, they can file an Application to the Registrar (Form 16) together with a Statement of Finances. If accepted, the party will be exempted under Rule 20(1) from paying fees with respect to that court file. An unsuccessful litigant must, unless a judge or registrar orders otherwise, pay to the successful party: any fees the successful party paid for filing any documents; reasonable amounts the party paid for serving any documents; and any other reasonable charges or expenses that the judge or registrar considers directly relate to the conduct of the proceeding28. Under no circumstances can any party recover any fees paid to a lawyer with respect to the proceeding: s. 19(4) of the SCA; however, reasonable disbursements charged by a lawyer with respect to the proceeding may be awarded to the successful party. B.Supreme Court of British Columbia The Supreme Court has a broad jurisdiction. It is not bound by any monetary limits and there are few restrictions on the types of claims that it can hear. The Supreme Court can grant injunctions, conduct judicial reviews, and make new law. The Supreme Court is not designed for lay litigants. Parties without legal training or legal advice may find it much more difficult to navigate than Small Claims Court. There are, however, a number of resources29 to help lay litigants bring and defend claims in Supreme Court. The court fees in Supreme Court are higher than in Small Claims Court; they can be waived, however, for those who cannot afford them. In Supreme Court, the losing party will often be ordered to pay to the successful party a portion of that party’ s reasonable legal costs. Costs are awarded using a tariff system and generally on a party and party basis that usually amounts to about twenty per cent of the successful party’ s costs. While it is possible for the successful party to be fully indemnified through an award of special costs, also known as solicitor-client costs, this is rare and should not be expected. C.Civil Resolution Tribunal The Civil Resolution Tribunal is designed to be an alternative to Small Claims Court. It is anticipated that the tribunal will begin operations some time in 2015.In June 2014, regulations were enacted that