What Is the Rule About How to Choose a Courthouse For a Small Claims Court Case?

A Small Claims Court Case, Generally, Should Be Brought At the Courthouse That Is Within the Same Municipality As Where the Defendant Resides, If the Defendant Is a Person, or Where the Defendant Does Business, If the Defendant Is a Business.

Understanding the Rules For Selecting the Proper Courthouse Location When Suing In Small Claims Court

Lawsuit Document Involving Conspiracy Issues With a few exceptions, a Small Claims Court case must be commenced within the courthouse that is convenient for the Defendant which is, presumably, where the person lives if the Defendant is a person, or where the business operates if the Defendant is a business. Exceptions may occur to convenience witnesses.

The Law

The Rules of the Small Claims Court, O. Reg. 258/98 contain Rule 6.01 which prescribes the location where a Small Claims Court case, generally, should be commenced.  Specifically, Rule 6.01 states:

6.01 (1) An action shall be commenced,

(a)  in the territorial division,

(i)  in which the cause of action arose, or

(ii)  in which the defendant or, if there are several defendants, in which any one of them resides or carries on business; or

(b)  at the court’s place of sitting that is nearest to the place where the defendant or, if there are several defendants, where any one of them resides or carries on business.

(2) An action shall be tried in the place where it is commenced, but if the court is satisfied that the balance of convenience substantially favours holding the trial at another place than those described in subrule (1), the court may order that the action be tried at that other place.

(3) If, when an action is called for trial or settlement conference, the judge finds that the place where the action was commenced is not the proper place of trial, the court may order that the action be tried in any other place where it could have been commenced under this rule.

Interestingly, whereas Rule 6.01(1)(a) states that a Small Claims Court lawsuit may be brought at the court location where the cause of action arose, which may differ from where the Defendant resides or operates, in practice, judges presiding over Small Claims Court cases, generally, expect and require that the case be brought where the Defendant resides or operates.  Accordingly, and for example, if a Defendant negligently caused damage to the property of the Plaintiff, then the cause of action (reason for suing) technically occurred where the Plaintiff resides and Rule 6.01(1)(a) suggests that the lawsuit could be brought at the courthouse nearest the Plaintiff; however, most judges will lean toward the requirement of the lawsuit being brought at the courthouse nearest the Defendant whereas, wtihout other concerns such as convenience to witnesses, courts view that the balance of convenience should be in favour of the Defendant.  The view that the balance of convenience should favour the Defendant was said in the cases of Cash 4 You Corp v. Power, 2014 CanLII 21574 as well as Soper v. CBV Collection Services Ltd., 2014 CanLII 47988 where it was said:

12.  The venue rule in Small Claims Court is based on a policy choice by the Civil Rules Committee that convenience to plaintiffs is sacrificed in favour of convenience to defendants.  In simple debt cases, the plaintiff must commence the proceeding where the defendant resides or carries on business.  The cause of action is non-payment and the non-payment cannot be deemed to have occurred where the plaintiff resides or carries on business, as has been consistently held for a century: see McNeilly v. Bennett (1915), 1915 CanLII 506 (ON SC), 34 O.L.R. 400 (H.C.J.); Xerox Canada Inc. v. Neary (1984), 1984 CanLII 2212 (ON CJ), 47 O.R. (2d) 776 (Sm. Cl. Ct.).

13.  The defendants’ ability to defend themselves may be compromised where the wrong venue is used by the plaintiff.  Dealing with a distant court office may be unworkable or unduly expensive for defendants.  Particularly for relatively small claims like these, that cost may deter defendants from exercising their right to respond to the claim.  The system is supposed to be user-friendly, particularly for self-represented parties.  The venue rule in this court favours convenience for defendants over convenience for plaintiffs.

2.  The law on forum as it developed under s. 66 of the Small Claims Court Act, R.S.O. 1980, c. 476 involved a hierarchy of choices: if the entire cause of action arose in one county, the action could be prosecuted in that county; if it did not, the action could only be prosecuted in the county in which the defendant resided or carried on business. Canada Trust Mastercard v. Nowick [1981] CarswellOnt 445, 27 C.P.C. 183, (Div. Ct.).

3.  The Small Claims Court Act has been replaced by parts of the Courts of Justice Act, R.S.O. 1990, c. C.43, which contains no provisions concerning forum in the Small Claims Court. Now forum is governed by Rule 6.01 of the Rules of the Small Claims Court, which is almost identical to s. 66 of the old Small Claims Court Act, and is subject, under R. 6.01(2), to judicial discretion to order a claim tried in another forum if “the balance of convenience substantially favours” that other forum.

4.  I see no reason not to follow the law that developed under s. 66 of the Small Claims Court Act, subject to considering a proper request to exercise my discretion under R. 6.01(2).

5.  This case arises out of an attempt by the defendant to collect an alleged debt of the plaintiff which is said to have been assigned to the defendant. After several contacts, the plaintiff sent the defendant a letter indicating that she would exact a charge for any further use of her time by the defendant. The defendant is said to have contacted the plaintiff after receiving the letter, and the plaintiff argues that her letter created a contract into which the defendant entered by contacting her again.

6.  It will be seen that if a contract exists, it was created in two regions: Waterloo from which the plaintiff sent her letter, and Toronto, where the defendant received it and allegedly agreed to it by initiating another contact. As well the contact over which the plaintiff sues was initiated in Toronto and completed in Waterloo Region. The cause of action did not arise in one region only, and therefore R. 6.01(1)(a)(ii) is invoked, and the claim must be tried in Toronto where the defendant carries on business.

7.  I have considered, as requested by the plaintiff, whether the balance of convenience substantially favours trying the claim in Waterloo. I find that it does not. The balance of convenience is level as between the two suggested fora. One party travels to whichever forum we choose, and there is no reason to prefer the comfort and convenience of the plaintiff to that of the defendant or its counsel.

Also interesting is the argument that whereas the lawsuit may be brought where the cause of action (reason for suing) arises, and whereas legal claims can often involve more than one cause of action, such as a lawsuit alleging both breach of contract as well as negligence or some other tortious conduct, it is possible in some circumstances that the one cause of action arose in a place that differs from where another cause of action arose.  In these situations, as per Rule 6.01(1)(a)(i) of the Rules of the Small Claims Court, there may be a choice as to where the lawsuit can be properly commenced; however, it is important to carefully review where the various causes of action, from a legal technicality mindset, actually occurred.  Additionally, consideration to the convenience of witnesses can influence a court in the decision for where the lawsuit should proceed.  These concerns were explained well in the case of Leonard v. GC Surplus, 2014 CanLII 18980 wherein it was stated:

The sole issue before me is whether the Toronto Small Claims Court has jurisdiction over the case.

The Defendant’s position before me was that the action should be stayed because this Court does not have “territorial competence to hear the matter” and alternatively, that the “balance of convenience favours Nova Scotia over Ontario”, and therefore the action should be stayed in Ontario and the Plaintiff should commence the proceedings in Nova Scotia.

The Defendant relies upon s. 21(1) of the Crown Liability and Proceedings Act (CLPA) R.S.C., 1985, C. c-50 which provides:

21. (1) In all cases where a claim is made against the Crown, except where the Federal Court has exclusive jurisdiction with respect to it, the superior court of the province in which the claim arises has concurrent jurisdiction with respect to the subject-matter of the claim.

The Toronto Small Claims Court is a branch of the Ontario Superior Court. Accordingly, the Toronto Small Claims Court, as part of the Ontario Superior Court, only has concurrent jurisdiction over those actions if the subject matter of the claim arises in the territory of the City of Toronto.

THE FACTS DISCLOSED BY THE PLEADINGS AND THE DOCUMENTS ATTACHED TO THE PLEADINGS

The Plaintiff bought a car in an internet auction from the Federal government. The Plaintiff sued “GC SURPLUS”.  The Defendant asserts in its pleading that the correct name for the Defendant should be the Attorney General of Canada as represented by the Minister of Public Works and Government Services.

The pleadings and the documents attached to the pleadings reveal certain facts:

1.  The car was located in Nova Scotia;

2.  The Plaintiff travelled to Nova Scotia to pick up the vehicle;

3.  The Plaintiff bought the vehicle by an internet bid, and confirmation of the Defendant’s acceptance of the bid was sent to the Plaintiff from Nova Scotia by email, dated July 9, 2013, which email stated:

Congratulations-You won!  Your recent bid on GCSurplus for the following items(s) was the winning bid”;

4.  The Plaintiff resides in Toronto and received the July 9, 2013 email in Toronto;

5.  The government employee, who sent the email and was involved internet auction, works out of offices located in Nova Scotia.

OVERVIEW OF THE APPLICABLE PRINCIPLES

In the Inukshuk Wireless Partnership v. 4253311 Canada Inc (2013) 2013 ONSC 5631 (CanLII), 117 O.R. 206, Newbould J. provides a helpful summary of the principles applicable to the issue before me:

[16] The starting point in the analysis is Van Breda v. Village Resorts Ltd., 2012 SCC 17 (CanLII), [2012] 1 S.C.R. 572, [2012] S.C.J. No. 17, which dealt with the subject of both jurisdiction and forum non conveniens in the context of tort actions.

[17] LeBel J., for the court, made clear that the test for jurisdiction is whether the claim of the plaintiff has a real and substantial connection to the forum. It is for the plaintiff to establish that there is a presumptive connecting factor to the forum. If the plaintiff establishes that, the defendant has the burden of rebuttal and must establish facts which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.

[18] Rule 17.02 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] provides a guide to what may be a presumptive factor. LeBel J. stated [at para. 83]:

At this stage, I will briefly discuss certain connections that the courts could use as presumptive connecting factors. Like the Court of Appeal, I will begin with a number of factors drawn from rule 17.02 of the Ontario Rules of Civil Procedure. These factors relate to situations in which service ex juris is allowed, and they were not adopted as conflicts rules. Nevertheless, they represent an expression of wisdom and experience drawn from the life of the law. Several of them are based on objective facts that may also indicate when courts can properly assume jurisdiction. They are generally consistent with the approach taken in the CJPTA and with the recommendations of [page212] the Law Commission of Ontario, although some of them are more detailed. They thus offer guidance for the development of this area of private international law.

[19] To establish jurisdiction simpliciter, a plaintiff need only establish that there is a good arguable case for assuming jurisdiction. See Ontario (Attorney General) v. Rothmans Inc. (2013), 115 O.R. (3d) 561, [2013] O.J. No. 2367, 2013 ONCA 353, at paras. 54, 110, 118-19. The phrase a "good arguable case" is not a high threshold and means no more than a "serious question to be tried" or a "genuine issue" or that the case has "some chance of success". See Tucows.com Co. v. Lojas Renner S.A. (2011), 106 O.R. (3d) 561, [2011] O.J. No. 3576, 2011 ONCA 548, at para. 36.

CONTRACT

The Defendant argues that the Plaintiff’s cause of action arises in Nova Scotia because that is where the parties entered into the contract.

In Inukshuk, supra, Justice Newbould wrote:

[25] The general rule of contract law is that a contract is made in the place that the offeror receives notice of the acceptance of the offer from the offeree. See Eastern Power Ltd. v. Azienda Communale Energia and Ambiente, 1999 CanLII 3785 (ON CA), [1999] O.J. No. 3275, 50 B.L.R. (2d) 33 (C.A.), at para. 22. In that case, it was held that the place of acceptance of an offer by return fax was the place where the offeror received notice of the acceptance. For our purposes, an e-mail is no different than a fax. Both are instantaneous communications.

In Christmas v. Fort McKay Nation [2014] O.J. No. 390 Chiappetta J. wrote:

18  It is well-established that when acceptance of a contract is transmitted electronically and instantaneously, the contract is considered to be made in the jurisdiction where the acceptance is received: see Eastern Power Ltd. v. Azienda Communale Energia & Ambiente (1999), 1999 CanLII 3785 (ON CA), 178 D.L.R. (4th) 409 (Ont. C.A.), at paras. 23, 27-29, leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 542; and Inukshuk Wireless Partnership v. 4253311 Canada Inc., 2013 ONSC 5631, 117 O.R. (3d) 206, at paras. 25-29.

Among the documents attached to the Statement of Defence, are the Terms and Conditions for GC Surplus internet auctions. On page 2 of 19 it states:

b. GCSURPLUS provides a method whereby Users may submit an Offer to Purchase Goods on-line;

On the facts of the case before me, the Plaintiff made an “offer” through his internet bid, which offer was accepted by the Defendant’s email of July 9th, and therefore the cause of action in contract arose in Toronto where the Plaintiff resides and where he received the notice of acceptance of his offer by email.

Accordingly, the Toronto Small Claims Court would have jurisdiction over the contract claim under s. 21 (1) of the CLPA because Toronto is where the claim arose.

TORT

The Plaintiff in his oral submissions focused on the Defendant’s alleged misrepresentations.

As is often the case in Small Claims Court the Plaintiff, like many unrepresented litigants, has not pled his case in the Statement of Claim with ideal precision. There is a two page section of the Statement of Claim entitled REASONS FOR CLAIM AND DETAILS. Page 2 refers to the Defendant’s “misrepresentations.” Paragraph 1 of page 1 of the REASONS FOR CLAIM, while written imprecisely, appears to me to be describing events in which the Plaintiff alleges he spoke to the Defendant’s representatives before he bid on the vehicle.  The Plaintiff alleges the Defendant’s representatives gave him false or misleading information and omitted relevant and material facts about the vehicle.

The tort of misrepresentation occurs in the jurisdiction in which the information was received or acted or relied upon: see Atlas Copco Canada Inc. v. Hiller, [2009] O.J. No. 377 (S.C.) at para. 34; Hyundai Auto Canada v. Bordeleau (2002), 2002 CanLII 49497 (ON SC), 60 O.R. (3d) 641, [2002] O.J. No. 3195 (S.C.) at para. 12; National Bank of Canada v. Clifford Chance (1996), 1996 CanLII 8219 (ON SC), 30 O.R. (3d) 746 at p. 759, Cannon v. Funds for Canada 2010 ONSC 4517 (CanLII), [2010] O.J. No. 3486 at para 52, affirmed  2011 ONCA 185 (CanLII), [2011] O.J. No. 990 (Ontario Court of Appeal).

The tort in this case is alleged to have been committed in Ontario, as the information was allegedly received, relied and acted upon by the Plaintiff in Ontario.

Accordingly, even if the cause of action in contract arose in Nova Scotia, a separate Toronto/Ontario cause of action in tort is pleaded, giving the Toronto Small Claims Court jurisdiction over this action.

In Club Resorts Ltd. v. Van Breda, 2012 SCC 17 (CanLII), [2012] S.C.J. No. 17, at paragraph 99 the Supreme Court of Canada made it clear that if a Court has jurisdiction over one cause of action, it has jurisdiction over all causes of action asserted in the Statement of Claim:

The purpose of the conflicts rules is to establish whether a real and substantial connection exists between the forum, the subject matter of the litigation and the defendant. If such a connection exists in respect of a factual and legal situation, the court must assume jurisdiction over all aspects of the case. The plaintiff should not be obliged to litigate a tort claim in Manitoba and a related claim for restitution in Nova Scotia. That would be incompatible with any notion of fairness and efficiency.

Therefore, if there is jurisdiction in Toronto over one of the Plaintiff’s causes of action as pleaded (either contract or tort) then there is jurisdiction over all aspects of the case.

Toronto Small Claims Court Rules

The Small Claims Court Rules’ provide:

RULE 6 FORUM AND JURISDICTION

Place of Commencement and Trial

6.01   (1)  An action shall be commenced,

(a)   in the territorial division,

(i)      in which the cause of action arose, or

(ii)      in which the defendant or, if there are several defendants, in which any one of them resides or carries on business; or

(b)   at the court’s place of sitting that is nearest to the place where the defendant or, if there are several defendants, where any one of them resides or carries on business.  O. Reg. 78/06, s. 8 (1).

(2)   An action shall be tried in the place where it is commenced, but if the court is satisfied that the balance of convenience substantially favours holding the trial at another place than those described in subrule (1), the court may order that the action be tried at that other place.  O. Reg. 78/06, s. 8 (1).

(3)   If, when an action is called for trial or settlement conference, the judge finds that the place where the action was commenced is not the proper place of trial, the court may order that the action be tried in any other place where it could have been commenced under this rule.  O. Reg. 78/06, s. 8 (1).

In the sworn Affidavit for jurisdiction field with the court the Plaintiff stated:

The plaintiff is entitled to proceed with this action in this territorial division because this is where the event (cause of action) took place.

The Small Claims Court rules allow the Defendant to be sued in the Toronto Small Claims Court if it is carrying on business in Toronto (which the Defendant counsel conceded they do) but that alone is insufficient under the CLPA, which grants the Toronto Small Claims Court concurrent jurisdiction over the action, as a branch of the Ontario Superior Court, only “if the claim arises” in Toronto.

However, as I have explained, in my view the case law cited above establishes that the cause of action in both contract and tort in this proceeding arose in Toronto.  For the reasons stated above, I find that the causes of action arose in Toronto and the Toronto Small Claims Court has jurisdiction under its Rules and under CLPA.

BALANCE OF CONVIENCE

As set forth above, the Small Claims Court Rules provide that “an action shall be tried in the place where it is commenced, but if the court is satisfied that the balance of convenience substantially favours holding the trial at another place than those described in subrule (1), the court may order that the action be tried at that other place.”

The Defendant argues the balance of convenience favours holding the trial in Nova Scotia. While no affidavit evidence was filed on this point, the Defendant argued in its factum (and orally) that the individual crown servants of the Defendant at its Dartmouth Nova Scotia offices will be “relevant witnesses in this action.”

In Van Breda the Supreme Court of Canada wrote:

103  If a defendant raises an issue of forum non conveniens, the burden is on him or her to show why the court should decline to exercise its jurisdiction and displace the forum chosen by the plaintiff. The defendant must identify another forum that has an appropriate connection under the conflicts rules and that should be allowed to dispose of the action. The defendant must show, using the same analytical approach the court followed to establish the existence of a real and substantial connection with the local forum, what connections this alternative forum has with the subject matter of the litigation. Finally, the party asking for a stay on the basis of forum non conveniens must demonstrate why the proposed alternative forum should be preferred and considered to be more appropriate.

108  Regarding the burden imposed on a party asking for a stay on the basis of forum non conveniens, the courts have held that the party must show that the alternative forum is clearly more appropriate. The expression "clearly more appropriate" is well established…

109  The use of the words "clearly" and "exceptionally" should be interpreted as an acknowledgment that the normal state of affairs is that jurisdiction should be exercised once it is properly assumed. The burden is on a party who seeks to depart from this normal state of affairs to show that, in light of the characteristics of the alternative forum, it would be fairer and more efficient to do so and that the plaintiff should be denied the benefits of his or her decision to select a forum that is appropriate under the conflicts rules. The court should not exercise its discretion in favour of a stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation. But the court must be mindful that jurisdiction may sometimes be established on a rather low threshold under the conflicts rules. Forum non conveniens may play an important role in identifying a forum that is clearly more appropriate for disposing of the litigation and thus ensuring fairness to the parties and a more efficient process for resolving their dispute.

The issue I must decide is whether under the Van Breda principles and the Small Claims Court Rule 6(b)(2), the Defendant has met its burden to persuade me to move the case to Nova Scotia.

At paragraph 103 in Van Breda the Supreme Court of Canada listed a number (although not exhaustive) list of factors for me to take into account in making this decision:

(a)  the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum;

(b)  the law to be applied to issues in the proceeding;

(c)  the desirability of avoiding multiplicity of legal proceedings;

(d)  the desirability of avoiding conflicting decisions in different courts;

(e)  the enforcement of an eventual judgment; and

(f)  the fair and efficient working of the Canadian legal system as a whole.

In Van Breda, the Supreme Court analyzed the evidentiary burden and the particular facts of the case before the Supreme Court, as follows:

124  I also find that the motion judge made no error in declining to stay the proceedings on the basis of forum non conveniens. Club Resorts failed to discharge its burden of showing that a Cuban court would clearly be a more appropriate forum in the circumstances of this case. Considerations of fairness to the parties weigh heavily in the respondents' favour. The inconvenience to the individual plaintiffs of transferring the litigation is greater than the inconvenience to the corporate defendant of not doing so….

Of the factors listed in (a) to (f), only (a) and (f)[1] are applicable.  The Defendant bears the burden of establishing that this case should be moved to Nova Scotia.  The Defendant has not filed any evidence to persuade me how I should weigh these factors or any other factors it wishes to raise.

How many witnesses will be called by each side is not known to me. Reviewing the pleadings, I conclude the primarily defence seems to be legal arguments relying on the terms and conditions of the bid, since the Defendant asserts the car was sold “as-is/where is” and relies on this and other contractual clauses. But even with this defence being utilized, there will still likely be defence witnesse(s) called to testify on the condition of the car and on what, if any, representations or misrepresentations were made by the Defendant to the Plaintiff.

But I cannot speculate how many witnesses each side will have. It may only be one witness for each side, in which case the cost for the Plaintiff to travel to Nova Scotia will be the same as the cost of the one defence witness to travel to Toronto. There may be more defence witnesses, but I have no evidence to establish that.

I am keeping in mind the evidential burden on the Defendant in this hearing. I am also bearing in mind the resources and ability of the Government of Canada to defend an action in Toronto, as I consider whether the balance of convenience favours requiring a self-represented Plaintiff in the Small Claims Court action to start all over with a new action in Nova Scotia. Bearing all of that in mind, I conclude that considerations of fairness to the parties weigh heavily in the Plaintiff’s favour. In my view, the inconvenience to the Plaintiff of re-launching the litigation to Nova Scotia is greater than the inconvenience to the Government of Canada in the action continuing in Toronto.

Absent compelling affidavit evidence, the pleadings and the documents attached to the pleadings do not provide a sufficient basis for satisfying the burden upon the Defendant.  The Defendant has failed to discharge its burden of showing that a Nova Scotia Court would clearly be a more appropriate forum in the circumstances of this case.

Summary Comment

When suing in Small Claims Court, generally, the lawsuit should be brought to the courthouse that is within the same municipal jurisdiction in which the person being sued lives or the business being sued operates.  Exceptions may apply where another courthouse will clearly be more convenient for the anticipated witnesses to the case.

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