Small Claims Court

It always surprised me when a debtor would contact our offices after we garnished their wages, or their bank account.  I never understood why they would ignore the claim that we served.  Did they think we were kidding?  We are a law firm, we don’t believe in jokes.  Just kidding, we do, but not when it comes to our clients’ matters.

I’ve written before about not ignoring your lawyer when it comes to corporate record keeping, but what about litigation matters?  It’s definitely not a good idea to do that either.

Our law firm is known to be tough, and once we have the momentum on a matter, we need to keep that up.  When a claim is not defended, we note the defendant in default right away, and proceed as quickly as we can to get Judgment.

When the matter has been defended, the next step in litigation is Discovery and the exchange of Affidavit of Documents.  In litigation matters, a Discovery Plan needs to be agreed to between the parties.  Again, this is something we move quickly on.   We don’t let the other side drag their heels.  We pick realistic dates in which to complete the necessary steps to get the matter to the Pre-Trial Conference.  The Discovery process is a very important process and can take months to complete, which is why we want to get those dates “written in stone” so to speak.  That way, if a party doesn’t comply, we have a basis to make them comply.

When sending those documents for you to review, don’t sit on it.  The quicker we get through this Discovery Process, the quicker we can get to the end of litigation, whether it be a settlement at the Pre-Trial Conference, or Judgment at Trial.

We always have your best interest at heart, and we make sure the other side knows that.

Christine Allan, Law Clerk

Our firm recently dealt with a Small Claims Court matter where our client was sued for alleged damages, which the amount sought was an amount that was not supported by the other party’s evidence.

Over time, the claim was amended, the amount increased, but was still not supported by the party’s evidence.

The lawyer representing other party wanted to settle the matter, which our client was open to, but the other party wanted to settle for an amount that was higher than what was claimed and expected to do so without providing supporting documentation to substantiate the amount.

The lawyer went as far to say that they did not want to deal with a large paper trail just to end up settling the matter.  The lawyer had to be reminded that if they continued with the litigation, they would be obligated to substantiate the amount of their claim with evidence in Court, and not based upon what their client says their damages are.  Settlements should be no different.

It is never a good idea to take the word of an opposing party who claims their damages are one amount, especially when their evidence supports another.  It is also a red flag when someone does not want to provide evidence to prove their damages, which technically, under the Rules of the Small Claims Court,  should have been provided when they started their lawsuit.

Whenever you start a lawsuit, make sure you can prove the amount you are claiming with real evidence, or you may not get the judgment you want, or a judgment at all, or even a settlement you can live with.

Murray Brown, Licensed Paralegal

When you are owed money for your services or products, how long do you wait until you sue a customer who doesn’t pay?  Did you know that you only have two years from the date that you are owed your money to do so, and if you don’t, you’re out of luck?

The Limitations Act in Ontario gives parties two years from the date they’re owed money to sue for that money back.  This was done partially so that the Courts would not be bombarded with older claims.  Also, as time passes, people’s memories fade and facts may be forgotten, or even evidence misplaced or lost.

The only time that a debt that is older than two years can be sued on is if the debtor acknowledges the debt or makes a payment.  Then your two-year clock starts again.

So how long should you wait before you sue?  That is ultimately up to you, but you shouldn’t wait long.

At our Firm, our 30-60-90 Sue™ program allows our clients to create easy procedures to help them get paid.  In a nutshell, here’s how it works:

After thirty days an invoice is due, send your customer a friendly reminder that you expect to get paid.

After sixty days, that previous friendly letter should now be a firm one, outlining any accrued interest and that the amount is due immediately.

After ninety days, give them just five days to pay, failing which you will sue them.

Still didn’t get paid?  Sue.

And it didn’t take two years to do it.

You did the work.  Don’t wait two years to get paid because you deserve to get paid now.

Murray Brown, Paralegal

No, the Blog title does not mean you need to take extra care scrubbing your hands before going to Court, though we do recommend Hand Sanitizer after going through Court Security.   This is about the legal concept of “Clean Hands”.

When I took my first college course on litigation well over a decade ago, one of the first doctrines we learned about was the doctrine of “clean hands.”  What does that mean?   The doctrine of clean hands, in a nutshell, is a defense that bars relief to a party who has engaged in bad behavior relating to the subject matter of their claim.

I was recently involved in a matter where our client was sued for failing to remove a payment on the date outlined in the contract, resulting in the plaintiff’s account being charged NSF fees.

They sued for what they claimed was irreparable harm to their credit, which was never established.

I argued (successfully) that the plaintiff is not entitled to damages resulting in the NSF charges, because the attempt to withdraw any payment was after the date it was due, and if the payment did not come out on the date it was supposed to, a reasonable person would simply leave the money in their account until it came did.  I suggested that the money was never in the account in the first place, and what caused the plaintiff’s damages was their failure to ensure the payment was in their account.

I argued that the plaintiff did not come to court with “clean hands” because the NSFs were not caused by our client attempting to withdraw the payment on a date other than what was in the contract, but because of the plaintiff not having the funds in the account in the first place, which resulted in any alleged irreparable harm to their credit.

The plaintiff failed to take responsibility for their actions, and the Court was not sympathetic to them.

It is important to be mindful of your actions before proceeding to Court to make sure that you come to Court with clean hands to ensure your actions won’t be used against you.

Murray Brown, Licensed Paralegal

A recent decision from the Toronto Small Claims Court involving verbal contracts and the enforcement of those contracts has the potential to change the way consumers deal with corporations in Ontario.

David Ramsay contacted Bell Canada and entered into a verbal contract with Bell for its services through their Call Centre.  The price was fixed for a term of 24 months.  Shortly after the telephone call and the agreement was made, Bell emailed David contract terms that were different than what he agreed to, in addition to an increase to the costs of their services.

David paid the difference, for two years, despite David’s objections he had a verbal agreement for an amount less than what was being charged.  He complained to the Commission for Complaints for Telecom-Television Services, who refused to interfere claiming Bell was entitled to change the terms of the agreement whenever they wanted.

The Toronto Small Claims Court disagreed.  David was able to obtain a copy of the transcript of his telephone call with the Call Centre employee who confirmed the cost for the services was the amount David advised they were, and not what Bell was claiming.

Bell’s argument was that they impose new terms and change the prices for their services whenever they wanted, because the terms state that Bell can do that.

The Deputy Judge found that by Bell attempting to impose new terms after a verbal agreement guaranteeing a monthly price for a 24 month term was “high handed, arbitrary and unacceptable,” and any imposition of new terms is unenforceable.

Bell Canada had attempted to settle this matter out of Court with David for some time prior to proceeding to Trial, most likely to prevent this matter from going public, without success.

This Decision, although in Small Claims Court may have further implications on companies like Bell in the future.

Although David was awarded significantly less than what Bell offered him, what he did will most likely change the way consumers deal with telecommunication companies moving forward.

If you enter into a contract and that contract is for a fixed term, the terms of that contract cannot be changed during that term, and if one party attempts to impose new terms, those terms will be unenforceable.

Murray Brown, Licensed Paralegal

Congratulations, you have a piece of paper from the Court that says a person or business owes you money.  Now what do you do with that piece of paper?

Judgments can be enforced several ways:

1. Garnishment;
2. Writ of Seizure and Sale; and
3. Examination in Aid of Execution

The most common way to enforce a judgment is by issuing a Garnishment, which is served upon an employer, bank, or a third party who owes your debtor money.  A Garnishment is a Court order that orders a person or entity, known as the Garnishee to pay you the amount of your judgment.  An employer is obligated to deduct 20% of the debtor’s net wages until the Garnishment is paid in full.  A bank who is served with a Garnishment must withdraw the full amount of the Garnishment.  If the full amount is not available, the balance must be withdrawn, and the account remains frozen until paid in full.  It does not always get paid in full, as debtors tend to open new accounts at new branches.

Garnishments can also be issued against a third party who owes your debtor money.  Instead of that party paying the debtor, they must pay you instead.

Garnishee has ten days from the date of being served with the Garnishment to serve you with the Garnishee Statement, which outlines how much they will be sending to the Court and when.  If they fail to send you the Statement, you can request judgment against the Garnishee for the debt owed by the debtor.

Issuing a Writ of Seizure and Sale of Land places a lien on any property owned by the debtor in the jurisdiction that the Writ is issued.  There is no limit on the number of Writs you can issue.  You can file a Writ in every jurisdiction that the debtor owns property.

If the debtor refinances or sells their property, your judgment must be paid out before the refinancing is complete or title is transferred.

If you issue a Writ of Seizure and Sale of Land, and any other party obtains judgment against the debtor and they successfully enforce their judgment, a portion of the amount collected on their enforcement will go to you.

If you do not know where the debtor banks, works or owns property, you can proceed with a Notice of Examination.  This allows you can examine and obtain information on their finances.  This allows you to the information you need to enforce your judgment by way of Garnishment or Writ.

If you find yourself with a piece of paper and you would like assistance in turning that piece of paper into money, give us a call and we will be more than happy to help you!

Murray Brown, Paralegal

Recently we had a  matter where our client was sued by a business for a refund they allege they did not receive from them.  Our client advised that the payment was provided to a third party, related to the plaintiff.

Based upon the information we had, we brought that third party into the litigation, who then made their own claim against our client.

Neither the plaintiff nor the third party produced the documentation required to support their claims against our client.

Our client, however, produced their records, dating back to over a decade.  Not only did they have the business records that allowed them  to be successful in the Main Action, they also had the records to defeat the Defendant’s Claim.

Our client’s records were detailed and easy to follow.  They also produced records that showed that everyone was paid what they were owed.  On the other hand, the records of the parties suing our client however, were difficult to follow and did not support their positions.

This made victory that much easier for our clients.

There any many benefits to keeping detailed and accurate records when running your business.  You never know when you or your legal representative will need them.  The more organized you are, the better prepared your legal representative will be to assist you in being successful in litigation.  Being organized can come down to wining or losing.

Murray Brown, Paralegal