Donovan Goss is no stranger to Toronto small claims court.
The general manager of Roberts Awnings & Signs, a venerable Toronto company founded in 1895, has turned to the civil court over the years as a last resort when a customer fails to pay a bill.
Today the shoe is on the other foot.
On June 29, with the summer’s heat already cranked up early in the morning, Goss arrives at Toronto’s small claims court at 47 Sheppard Avenue East to represent his company named as the defendant, not the plaintiff, in a dispute over a bill.
Several small, unadorned courtrooms sit on the perimeter of a cramped third-floor waiting area filled with rows of padded metal chairs. A dozen or so people, the first of a steady trickle through the day, start lining up at 9:30 a.m. for an appointment with a court official who processes their paperwork. Small claims cases range from unpaid loans and bills to compensation for damages and breach of contract.
Often referred to as “the people’s court,” small claims court handles disputes of up to $25,000, often without need for a lawyer and in a relatively informal setting with simpler rules and lower costs than higher courts. (The upper limit was increased on January 1 from $10,000, bringing it more in line with other provincial thresholds.)
The court wins high marks for handling cases in fairly speedy fashion — six months on average from filing a complaint to trial — but the experience leaves some, winners and losers alike, disillusioned with the process.
Take the awning matter with Goss before Deputy Judge Laurence Arnold, a former labour relations lawyer, in Room 300, one of five courtrooms in session today.
In 2007, commercial property owner Toshiko Hayashi paid a general contractor to install a new awning on a building she owns on Yonge Street. The contractor did not reimburse Roberts Awnings and later went out of business. When Roberts Awnings repossessed the product in an attempt to recoup its losses, Hayashi responded by suing the company in small claims court.
Two months after a one-day trial in April, Goss and representatives of the elderly plaintiff are back in court to hear Deputy Judge Arnold render his verdict. It’s one of a half-dozen matters on his docket for the day.
With a full head of white hair and a black robe over a suit and blue-striped tie, the 77-year-old presides over a near-empty 20-seat courtroom with dry wit and low-key informality. He stops to translate Latin phrases and legal jargon during a 30-minute review of facts.
Thirty minutes later, Deputy Judge Arnold reads his decision. He awards Hayashi $3,000 in damages and $300 in legal costs, plus disbursements. Showing some sympathy for Roberts Awnings, he concludes its actions were not “sufficiently malevolent” to justify punitive damages.
Despite praise for Arnold, both parties walk away less than satisfied.
Goss describes the deputy judge as “very fair and very learned,” but questions whether anyone came out a winner. Roberts Awnings remains out of pocket and Hayashi still needs a new awning. His frustration runs deeper than this case. Despite a record of success over 16 years in taking clients to court, Goss is not always successful collecting awards. He says defendants hide behind shell companies or use other strategies to avoid payment.
His conclusion? It’s not often financially worthwhile to go to court. “That’s why more often than not we repossess our product,” Goss adds. “To go to small claims court costs you your own time.”
Gerry Kawaguchi, Hayashi’s nephew and property manager, sounds equally dissatisfied.
“It is questionable whether I would do it again,” he says later, estimating that his aunt incurred legal bills of nearly $2,000, well above the award of $300 in legal costs. “I may have been better off paying the balance [owed to Roberts Awnings],” he sighs. “But it was the principle of the thing.”
Their frustration is familiar to Justice Marvin Zuker, a former small claims court judge and author of Ontario Small Claims Court Practice, an annual practical guide marking its 30th anniversary this fall. “One of the greatest misconceptions is that winning equates with getting your money,” observes Zuker, now a family court judge. The Ministry of the Attorney General does not track what happens after a judgment, leaving enforcement to the parties involved.
The determination to prove a point may explain, in part, why small claims courts are the busiest civil justice venues in Ontario. In the first five months of this year, 28,954 new cases were filed in the province, up over 10 percent from the same period in 2009, according to ministry statistics. After the threshold was raised to $25,000, 142 cases were transferred from the Superior Court of Justice as of May 2010.
With the court’s higher monetary jurisdiction, some observers see a growing interest in hiring a lawyer. “When a claim is over $10,000, people take it more seriously and start to get legal advice,” says Sergiy Timokhov, an associate of Garfin Zeidenberg LLP who devotes about 30 percent of his commercial litigation practice to small claims cases in the Toronto area.
Back in his courtroom, Deputy Judge Arnold is ready for his first trial of the day — a feud between two brothers over an unpaid loan.
Plaintiff Joney Ponrajah has assistance from Law Help Ontario in the three-year dispute with his younger brother Jeffry, who has his own lawyer.
From a small office that overlooks the court’s third-floor waiting area, Law Help Ontario, a Pro Bono Law Ontario (PBLO) project, runs a walk-in clinic to help a growing number of low- to medium-income clients navigate the legal waters. Launched in 2006 with four major law firms, the project now draws from a roster of up-and-coming lawyers seconded from 16 major Toronto firms.
Young lawyers rarely get trial experience early in their careers. But as PBLO duty counsel for the day, they are tossed a variety of legal challenges and may represent clients in a trial. “It’s an excellent training opportunity for our young associates and is also an opportunity for us to assist in the community,” says Peter Manderville, a partner at Gowling Lafleur Henderson LLP, a founding sponsor.
“It’s baptism by fire,” says Frank Lamie, 31, one of two Gowlings associates acting as duty counsel this day.
He’s just agreed to serve as Joney Ponrajah’s lawyer, barely 15 minutes before the start of the trial. The two quickly review key details of the case, aided by clinic coordinator Laurine Shaw.
Once in court, Lamie tells Arnold that he was “recently” asked to join the case. “You mean like 10 minutes ago?” asks Arnold, smiling. Lamie responds dryly, “maybe 11.”
First, Arnold wants to know if there is any chance for a negotiated settlement. Sensing one, he calls a recess to give the brothers another chance to resolve the dispute.
It doesn’t look good.
Last December, the brothers took part in a settlement conference, managed by a deputy judge who listens to the warring parties, ensures documents and witnesses are in place for a possible trial, and points out strengths and weaknesses of the case. Such conferences, which the court requires, give the parties a chance to think hard about their legal options, possibly to settle, but details of the private session are never divulged if they go to trial. In the case of the brothers, they failed to come to terms after a threehour session.
With the matter now on the brink of a trial, Deputy Judge Arnold urges the brothers to take one last stab at a deal. “A settlement between the parties is far better than having one imposed by a stranger,” he warns.
After an hour, the two brothers and their respective lawyers return to the courtroom. No deal.
Just as the trial is about to begin, a member of a volunteer mediation project run by York University pops his head into the courtroom to offer assistance. After the invitation from mediator Christopher Baines, Arnold calls another recess.
By 1:15 p.m., the brothers and their lawyers have returned to court to report they have a deal. No one will say why the brothers settled, but typically the risk of an imposed settlement or the fear of airing a private matter in public is motivation enough to avoid a trial.
The day wraps up with Lamie and opposing counsel crafting minutes of settlement for the $7,500 loan repayment. Although Lamie always finds trials engaging, he says the settlement is the right outcome for his client and is a good example of the disputeresolving focus of small claims court.
As for Deputy Judge Arnold, who wraps up a four-year stint at the court next April, he likens the work of small claims court to a rumble. “It is the closest thing to a fist fight without hitting each other,” he observes. “And it’s done in an arena where no one will come out with blood dripping.”
Small claims court…by the numbers:
- 88 Number of small claims courts in Ontario
- 1 Number of small claims courts in Toronto
- $528 Per diem rate for deputy judges
- 421 Number of deputy judges at small claims courts in Ontario
- 203 Average number of days to dispose of a case (from filing of the original document to final order/judgment)
- $25,000 Monetary jurisdiction for small claims courts in Alberta, British Columbia, Newfoundland and Labrador, Nova Scotia, Ontario and the Yukon
Illustration by Lorraine Tuson