Q.    I live in Toronto.  I have an outstanding account with the Royal Bank.  Last week I was served with a Statement of Claim, issued in Hamilton Superior Court, by the law firm of Gowling, Lafluer Henderson, LLP, with offices in Hamilton, Ontario, for approximately $18,000.  Firstly, why was I sued in Hamilton, and not in Toronto where I live?  Secondly, why was I sued in Hamilton Superior Court, and not in Small Claims Court?

A.   In 2009, amid much fanfare, the Ontario Government announced that it was increasing the monetary jurisdiction of the Ontario Small Claims Court from $10,000 to $25,000, effective January 1, 2010.  Accordingly, starting January 1, 2010, creditors could sue debtors in Ontario Small Claims Court for unpaid accounts where the principle owing was less than $25,000.  It is in the public interest for lawsuits involving unpaid accounts on balances with outstanding principle less than $25,000 to be heard in Ontario Small Claims Court where lawsuits can be dealt with more quickly and inexpensively than in Ontario Superior Court.

Unfortunately, some creditors and some law firms have decided that for strategic reasons they want to sue debtors, in circumstances where the principle owing is less than $25,000, in Ontario Superior Court, and not in Small Claims Court.  It is my belief that these creditors and the law firms they employ are suing these unpaid accounts in Superior Court, an not in Ontario Small Claims Court, because they believe that more than 90% of these lawsuits will result in quick default Judgments.  However, this practice, arguably, is not in the public interest and it involves a denial of access to justice for those debtors who (1) are sued in Ontario Superior Court, and not in Ontario Small Claims Court, often in courts that may be hundreds of miles from where they live.

If these consumers were sued in Ontario Small Claims Court all they would need to do is to go online and get a Defence form off an Ontario Governemnt website, complete the document, print three copies, and arrange to file the Defence in Small Claims Court, where they would pay a $40 court filing fee to file their Defence.  In contrast, if a consumer wanted to defend a lawsuit commenced by a creditor in Ontario Superior Court the consumer faces a much more daunting and expensive procedure.