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Small Claims Court Limit Involves Net From Set-Off Upon Sum Assessed
Question: Does the set-off amount in a Small Claims Court case take the court limit as the maximum possible starting amount?
Answer: No, the set-off amount is calculated from the assessed sum rather than the court award limit, ensuring that the final judgment remains within the allowable maximum of $35,000, providing clarity and fairness in the assessment process.
Does the Set-Off Amount in a Small Claims Court Case Take the Court Limit as the Maximum Possible Starting Amount?
If the Small Claims Court Assesses a Sum That Is Higher Than the Maximum Award Amount Allowed, the Assessed Amount Is the Basis For Reduction By Any Set-Off; Nevertheless, the Total Amount Granted Must Be Within the Court Award Limit.
Understanding the Small Claims Court Jurisdiction to Award Judgment As Net Set-Off Despite An Above Limit Assessment
In the Small Claims Court, a limit of $35,000, exclusive of legal costs and interest, currently applies; however, this limit applies to the amount that may be awarded as a Judgment rather than a limit upon the sums that may be assessed by the Small Claims Court. Furthermore, in cases where a set-off amount applies, the set-off is calculated from the assessed amount rather than from the award limit.
The Law
The 2146100 Ontario Ltd. v. 2052750 Ontario Inc., 2013 ONSC 2483, case confirms the point that the Small Claims Court may assess any sum of damages and may apply from that assessed sum, rather than apply from the monetary jurisdiction cap, an applicable set-off sum so long as the a net Judgment award remains within the court award limit. This basis for applying a set-off was confirmed whereas it was said:
[17] In terms of the case at bar, the respondents expressly set out in their defendants' claim that they were owed over $42,000 from the appellants. They limited their ultimate recovery, however, to $25,000. Whether that limit is arrived at through set-off or abandonment of any sum over and above the monetary jurisdiction of the court is immaterial in my view: see Dunbar v. Helicon Properties Ltd., 2006 CanLII 25262 (ON SCDC), [2006] O.J. No. 2992, 2006 CarswellOnt 4580, 213 O.A.C. 296 (Div. Ct.).
[18] The respondents claimed a judgment of $25,000. They were awarded a judgment of $21,538.85. In my view, the process amounted to nothing more than the trial judge starting at $42,633 and making deductions for amounts owed to the plaintiff, to arrive at a net figure within the monetary jurisdiction of the court. This process is logically no different than assessing the value of a contract at $50,000, determining that $30,000 had been paid under the contract, leaving a balance owing of $20,000. There could be no doubt, in those circumstances, that the deputy judge had the jurisdiction to make a finding that the initial value of the contract was an amount in excess of the monetary limit of the court. But at the end of the day, it is the net judgment that matters. Here, the amount awarded was within the monetary jurisdiction of the Small Claims Court and did not exceed the amount claimed in the defendants' claim.
As occurred in the 2146100 case, the Judge assessed just over $42,000 on a Defendant's Claim as a counterclaim that was brought against the Plaintiff by the Defendant. The Judge also assessed a sum just over $21,000 on the Plaintiff's Claim as owed by the Defendant. In determining the net award due upon the Judgment, the Judge subtracted the $21,000 as a set-off from the $42,000 assessment rather than from $25,000 limit (at that time). Subsequently on Appeal, the Divisional Court upheld the manner in which the Judgment was calculated by dismissing the Appeal.
Summary Comment
The Small Claims Court monetary jurisdiction limit applies to the amount which the court may award rather than the amount the court may assess. Furthermore, in cases where a set-off calculation is involved, the set-off is taken from the assessed sum rather than from the Small Claims Court limit.