May 2, 2019

Plaintiff not obliged to continually monitor whether there is 'sufficient reason' to sue in BC Supreme Court rather than Small Claims Court

Reimann v. Aziz, 2007 BCCA 448 (CanLII)

Summary: After commencing a claim at BC Supreme Court, plaintiffs do not have an ongoing obligation to assess whether is ‘sufficient reason’ to sue at BC Supreme Court (as opposed to Small Claims Court) as circumstances change

Facts: The plaintiff brought an action in BC Supreme Court arising out of an automobile accident. At the time the plaintiff commenced his action, on August 11, 2005, the maximum jurisdiction of the Small Claims Court was $10,000. Weeks later, on September 1, 2005, this was increased to $25,000. The defendant’s statement of defence, filed on November 9, 2005, did not raise any issue concerning jurisdiction.

The parties conducted examinations for discovery, and the action was set down for a one day fast track trial for February 20, 2006. Shortly before trial, on January 31, 2006, the defendant brought an application to transfer the case to Small Claims Court. Master McCallum dismissed the defendant’s application, finding that there would be “nothing to be gained now by transferring the matter and delaying the plaintiff’s right to a just, speedy, and fair resolution of the matter on its merits when that can take place here in February of 2006.”

After trial, the plaintiff was awarded a total judgment of $5,420, consisting of non-pecuniary damages of $4,000, wage loss of $700, and special damages of $720.

The trial judge considered the issue of costs briefly and held that the plaintiff was entitled to his costs:

Mr. Mark [counsel for the defendants], I certainly would have acceded to your submissions, had the new limit been in place. But it would not have been prudent in this case for a lawyer to advise his client to proceed under small claims rules because the damages may have been proven to an amount that exceeded the small claim jurisdiction.

The trial judge also made the following relevant conclusions regarding the potential value of the claim at the time it was initiated:

  • the claim may have been worth more than $10,000
  • the claim was not worth in excess of $25,000

At issue: Successful plaintiffs who recover damages within Small Claims jurisdiction are not generally entitled to costs, unless there had been‘sufficient reason’ for bringing the claim to BC Supreme Court. Rule 57(10) of the BC Supreme Court Civil Rules (now Rule 14-1(10)) stated:

A plaintiff who recovers a sum within the jurisdiction of the Provincial Court under the Small Claims Act is not entitled to costs, other than disbursements, unless the court finds that there was sufficient reason for bringing the proceeding in the Supreme Court and so orders.

The defendant argued that the plaintiff – although successful at trial – should be deprived of costs (other than disbursements) because:

  1. There was not sufficient reason to bring the claim to BC Supreme Court at the outset of the action as it should have been apparent that judgment would be within the Small Claims Court limits; and
  2. The plaintiff had an ongoing obligation to assess the value of his claim (which would have clearly been within the Small Claims jurisdiction once the limit was increased to $25,000) to determine if there was still sufficient reason to continue in BC Supreme Court.

Decision: The BC Court of Appeal found no error in the trial judge’s conclusion that the claim could have been worth more than $10,000. As a result, the Court of Appeal quickly dismissed the defendant’s first argument, that it was unreasonable – at the outset of the claim – to commence the action at BC Supreme Court.

The Court of Appeal also dismissed the defendant’s second argument, that the plaintiff had a continuing obligation to assess the value of his complaint after it was commenced. The defendant’s position was that the plaintiff no longer had ‘sufficient reason’ to continue his claim at BC Supreme Court once the Small Claims Courts jurisdiction was increased to $25,000. The trial judge's assessment was that the claim was never going to be worth more than $25,000. The Court of Appeal noted that past BC Supreme Court authorities supported the defendant’s position:

[28] The Supreme Court has considered the issue and has developed an apparent consensus that there is an ongoing obligation on a plaintiff to assess quantum and to remove a case from the Supreme Court to the Provincial Court if it were to appear that the likely recoverable amount is within the jurisdiction of that court.

The Court of Appeal overturned this line of authority, finding the approach too limited:

[35] In my view, the approach generally taken by the Supreme Court is too limited. It overemphasizes the policy of encouraging parties to proceed in the Provincial Court, but fails to consider the equally compelling policy consideration that parties are entitled to have respected their legitimate choice of forum. It also ignores judicial pronouncements concerning the phrase “bring an action” and gives insufficient weight to the overall scheme of the legislation.

As a result, the Court of Appeal dismissed the defendant’s appeal and the plaintiff was allowed his costs. The Court concluded that a plaintiff, as an action progresses, does not have an ongoing obligation to assess whether there is still ‘sufficient reason’ to continue at BC Supreme Court rather than Small Claims Court:

[44] Considering Rule 57(10) in its legislative context and applying its words in their grammatical and ordinary sense harmoniously with the scheme of the legislation and its objects, I conclude that a plaintiff does not have an ongoing obligation to assess the quantum of a claim and that the point in time for a consideration of whether a plaintiff had sufficient reason for bringing a proceeding in the Supreme Court is the time of the initiation of the action.

Author: Brendan Harvey is an employment lawyer in Vancouver, BC practicing on the North Shore with Yeager Employment Law.