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Multiple Plaintiff Joinder: Small Claims Court Limit Concerns
Question: How can multiple Plaintiffs effectively pursue claims in Small Claims Court?
Answer: Each Plaintiff who has been harmed in the same incident can bring independent claims up to the Small Claims Court limit, allowing for joint litigation while minimising expenses and court time. Civil Litigations Paralegal Services can guide you through this process, ensuring each person understands their rights and can effectively advocate for their claims.
Each Person Suing Can Do So at the Small Claims Court Limit
In litigative proceeedings, it is common that two or more people were harmed within the same transaction or occurrence by the same Defendant or Defendants. These people, being Plaintiffs to litigation, may choose to pursue compensation from the harm suffered by bringing claims within the Small Claims Court while also choosing to pursue respective claims jointly within the same lawsuit, thereby sharing legal expenses, minimizing inconvenience to witnesses who may otherwise need to testify in separate cases, and even saving court time and thus taxpayer expense. When this happens, a confusion sometimes occurs. The confusion arises as to whether each Plaintiff may sue individually up to the limit of the Small Claims Court or whether the collective total must be capped at the Small Claims Court limit.
The Law
The Rules of the Small Claims Court, O. Reg. 258/98 contain an often misunderstood rule that forbids a Plaintiff from splitting a cause of action, meaning that a Plaintiff, with a legally recognized reason for suing, is forbidden from bringing multiple lawsuits seeking compensation for different portions of the harm resulting from the cause of action. Essentially, when a person is harmed within a business transaction or some other occurrence that gives rise to litigation, all of the harm stemming from that one incident must be claimed within one lawsuit. Specifically, the law states:
6.02 A cause of action shall not be divided into two or more actions for the purpose of bringing it within the court’s jurisdiction.
32 "Cause of action" is an expression that refers to all of the facts necessary to give rise to a claim: see Royal Bank v. Metcalfe (1985), 3 C.P.C. (2d) 228. Where a single cause of action is split in order to bring it to Small Claims Court in parts, the court has no jurisdiction to deal with any of the parts. All of the split-up claims are nullities. A judgment obtained in such a split up claim is also a nullity: Traditional Air Systems Inc. v. Custom Gas Heating Ltd. (1995). 86 O.A.C. 72; [1995) O.J. No. 3039; Maple Lodge Farms Ltd. v. Penny Lane Fruit Market Inc ., [1997] O.J. No. 4401. A claim for the unpaid balance on a running account could be viewed as a single cause of action: see Maple Lodge Farms, above, and Bartor Developments Inc. v. Leon's Furniture Ltd. (1997), 1997 CanLII 997 (ON CA), 103 O.A.C. 314; [1997) O.J. No. 3763.
[20] A helpful definition of a “cause of action”, is found in the decision of Bank of Nova Scotia v. PCL Constructors Canada Inc., 2009 CanLII 56303 (ON SC), a decision of Master Glustein (as he then was). Master Glustein refers to the decision in Ascent Inc. v. Fox 40 International Inc., [2009] O.J. No. 2964, where a cause of action was defined as follows:
A “cause of action” has been defined as a “factual situation the existence of which entitles one person to obtain from the court a remedy against another person.” ...
Take note that Rule 6.02 refers to "A cause of action ...". Now, take note that, "A cause of action has been defined as a factual situation the existence of which entitles one person to obtain from the court a remedy against another person". Now, with reference to Rule 6.02 and the definition of cause of action, tie the two together giving special attention to the wording in Rule 6.02 which singularly states, "A cause of action ..." and the definition which singularly states, " ... a factual situation the existence of which entitles one person to obtain from the court a remedy against another person." Accordingly a cause of action, meaning reason for suing, is a legal concept that is possessed individually rather than something that is shared; albeit, numerous persons can have a cause of action, even when the cause of action arises from the same set of facts.
Where Does the Confusion Come From?
Where perhaps much of the confusion arises is when two or more people are harmed within the same contractual business transaction or the same wrongdoing occurrence and therefore each has experienced the same, from a label standpoint, cause of action. Note that the phrase label standpoint is used here to indicate that causes of action have common names (e.g. breach of contract); and yet, the experience of a breach of contract by each person remains unique even if each person was a party to the same contract. Further confusion sometimes comes about when a cause of action is looked at from the perspective of a Defendant rather than the proper perspective that a cause of action is that of a Plaintiff, despite the definition that a cause of action is the fact or set of facts that, "... entitles one person to obtain ... a remedy ...". Quite simply, what the Defendant did created only the fact or facts that give rise to the right to pursue a remedy. When viewed this way, a cause of action can be understood as an intangible thing, being the right to sue, which is possessed by a Plaintiff. In this way, cause of action and right of action are legally viewed as conjoined twin siblings.
Now that it should be appreciated that cause of action and right of action are principles independently born and individually possessed, it can better discussed and debated and prepared to argue in court that an individual person (human or entity) has a cause of action and a right of action; and with the cause of action and right of action being independent of any cause of action and right of action possessed by another person - even when the same cause of action held by each person arose from the same transaction or occurrence.
Example: Tort Law
A vandal goes on a malicious spree taking a baseball bat to ten cars in a parking lot. Assume for this example that all ten cars were owned by friends and family at a celebration and $10,000 damage was done to each car. The vandal is caught. The ten car owners each bring a Small Claims Court action to recover the respective $10,000 losses and thereby for a total of $100,000 and all ten choose to use the same legal representative, meaning lawyer or paralegal. In this situation, the law stating that each victim of the same tort has an independent cause of action and each individual Plaintiff may claim up to the Small Claims Court limit can be found in Lock v. Waterloo (Regional Municipality), 2011 CarswellOnt 15974, as follows:
13 The same point has been addressed under the Simplified Procedure provided in Rule 76 of the Rules of the Civil Procedure, R.R.O. 1990, Reg. 194. There is a monetary limit for the mandatory application of that procedure and it has been held that multiple plaintiffs each claiming within the monetary limit can be properly joined in one claim: Baker v. Chrysler Canada Ltd. (1998), 38 O.R. (3d) 729 (Ont. Gen. Div.), leave to appeal denied 112 O.A.C. 277 (Ont. Div. Ct.). It has also been held that Rule 76 should be liberally interpreted to carry out its policy of containing the cost of litigating the smaller claims to which it applies: Lillie v. Bisson (1999), 46 O.R. (3d) 94 (Ont. C.A.). In my view both of those principles are equally true of proceedings in the Small Claims Court.
14 To hold otherwise would be to require that the case at bar be divided into two actions involving virtually identical allegations of fact and law. I see no useful purpose in requiring that multiplicity of proceedings, nor any proper basis to do so under the law of joinder or the law defining this court's jurisdiction.
15 Section 23(1)(a) of the Courts of Justice Act gives this court jurisdiction "in any action for the payment of money where the amount claimed does not exceed the prescribed amount..." "Action" is defined under s. 1(1) of the Act only as including proceedings, other than applications, commenced by a not-exhaustive list of originating documents. The list does not refer to the Small Claims Court and does not mention the Plaintiff's Claim which, along with the Defendant's Claim, is the originating document in this court.
16 Section 1(1) of O.Reg. 626/00 sets the monetary jurisdiction of the Small Claims Court, stating that "The maximum amount of a claim in the Small Claims Court is $25,000." That differs from s. 23(1) by referring to a "claim" in this court rather than an "action" in this court. As was found in Action Auto Leasing & Gallery Inc. v. Robillard (2011), 106 O.R. (3d) 281 (Ont. Div. Ct.), dealing with the minimum appealable amount, there is a material inconsistency between the language of the Act and the language of the corresponding regulation.
17 The Courts of Justice Act and its regulations should be interpreted liberally and as a coherent package. In my view, properly interpreted, the effect of the applicable provisions is that plaintiffs suing together in one action in the Small Claims Court may properly each claim damages up to the maximum monetary jurisdiction of the court.
Example: Contract Law
Take the above story but imagine instead that the vandal escaped capture. Also imagine that there was a valet service contractually paid for safekeeping of each car (ignore any issues about waiver of liability, etc.). In this slightly altered scenario, grounded in contract law, the result remains the same as each victim still has an independent cause of action. Furthermore, even if one contract was entered into by multiple victims, such as husband and wife that had 50/50 shared ownership of a car, and thus each has a financial interest car, each still has an independent cause of action according to Kent v. Conquest Vacations, 2005 CanLII 2321, whereas it is stated:
[3] Conquest argues that the Small Claims Court did not have jurisdiction to hear these actions because there should have been only one action. Conquest submits that the Kents split their single action into two in order to get around the $10,000 limit applicable in Small Claims Court. Conquest claims that, since the contract was for two adults and one child to take a vacation together, “it was not in any way separated by individuals.” Conquest relies on the facts that the family paid for the vacation with one Visa card, traveled together, and spent time together as a family on the vacation to argue that there is only one cause of action. Conquest claims that the Kents are in breach of Rule 6.02 of the Rules of the Small Claims Court, Ontario Regulation 258/98:
6.02 A cause of action shall not be divided into two or more actions for the purpose of bringing it within the court's jurisdiction.
[4] If the two actions are more correctly heard as one, the total award of damages of $15,730.70 exceeds the jurisdiction of the Small Claims Court.
[5] The Kents dispute Conquest’s allegations of case splitting, relying on the terms of the contract, which state that each traveler has a contract with Conquest. Since each has a contract, each has an action for breach. Multiple plaintiffs, even if married to each other, maintain rights to seek relief before the Small Claims Court up to the maximum $10,000 per claim.
[6] The “Terms and Conditions” issued to vacationers by Conquest contains the following:
In booking a Conquest Holiday, or Air only, you and those on whose behalf you are booking become party to a contract with Conquest and those companies providing the services included in your holiday.
[7] This is Conquest’s language, inserted by it in its own interest and it clearly provides that not only the person booking the holiday, here Mrs. Kent, but also those for whom she booked, here Mr. Kent, become party to the contract. Why then cannot each party to the contract assert his or her damages for a breach of it in an action? “The right to sue for damages for breach of contract does not arise out of the contract itself, that is, it is not a matter of agreement but is an independent right given by the law.”[1]
[8] While the damages of the individual parties arise out of a common transaction, they need not be asserted in a single action. Rule 5 of the Rules of the Superior Court, although not directly applicable to the Small Claims Court, is instructive. It provides that two or more plaintiffs, if represented by the same solicitor, “may” join as the plaintiffs in the same proceeding where their claims arise out of the same transaction. The joinder is voluntary.
[9] The Kents have not split their case, as prohibited by Rule 6.02. This rule prevents a single plaintiff from dividing an action to come within the court’s jurisdiction. This is not so in the case at bar, as both Mr. Kent and Mrs. Kent were parties to the contract and had the right to bring separate actions against Conquest.
Conclusion
Two or more Plaintiffs can choose to join together within the same action while each makes an independent claim up to the Small Claims Court maximum. The concept of splitting a cause of action relates to a single person bringing multiple lawsuits arising from the same transaction or occurrence. Where multiple people were harmed from the same transaction or occurrence, each has an individual cause of action. A cause of action arises from the facts, rather than being the facts.
