Case
Study for FOCA: Small Claims Court
Background:
Our cottage association, comprised of
approximately 20 cottages, is responsible for keeping up a non-maintained municipal road for
approximately 8 kilometres. Several of
the cottagers use this road to access their cottage but refuse to participate
in meetings or to contribute to a general fund established by our cottagers’
association. Thus, non-participating cottagers are
“unjustly enriched” by the efforts of others in the association. Numerous attempts had been made to bring them
into our association, but they refused.
Use of a collection agency had not worked due to the fact that they
would not accept our registered letters or they had used an excuse that they do
contribute to maintaining the road through work with other contractors. Non-payers also believed that contributing to
road maintenance was voluntary and they
could make the decision to use the road without any contribution.
Finally our
association decided to take the issue to small claims court and contact was
made with FOCA to determine if a data base of information existed about other
associations that pursued this route. We
were referred to one case: Point Abino
Association v. Lee (http://www.foca.on.ca/case-law). This case was very similar to our situation
and used the concept of “unjust enrichment” to win their court case. This article will be a more detailed outline
of the process of using the small claims court which may assist other
associations in their efforts.
The process of
small claims court and all the forms required are available through the
internet (http://www.attorneygeneral.jus.gov.on.ca). Going into the Small Claims section will give
you all the information that you will need to continue your case.
The first form
required is the Plaintiffs Claim, Form 7A.
You will need the name and address of the defendant (non-payer). But you have to be very careful. The name that you are claiming to be the
defendant may not be the same person on
the municipal role as paying the taxes.
In two of our cases we got surprises when we found one property was actually
an estate and the other property was not listed under the person we were
requesting payment for our association.
After checking the municipal role, you will find the address of the
defendant. You might also go to the Land
Registry Office and use a credit card to operate their computerized system for
PIN (property identification number).
You can check personal names, and
property lot numbers. This lead
to another surpise. The property that
was an estate, was still listed under the name of a person who had died over 10 years ago. It seems that the property ownership is an active court issue. You might also check the Book of Wills. If property is owned in your jurisdiction and
the person dies, this book will record when the deed is changed over to new owners. You can also check to see if there are any
writs against the property or owners. The
staff at our Land Registry Office was very supportive in giving directions for
finding information
In the Plaintiff’s
Claim you need to give the Reasons for Claim and Details. Basically we mentioned: 1) length of road
maintained by our association, 2) number of cottagers along road, 3) lack of
municipal maintenance, 4) number of culverts, washouts and beaver dams, 5) past
accidents and insurance coverage and court summons,6) efforts of volunteers for
clearing of trees, dragging the road, 7)
total amount of fees owed to our association by the defendant.
We numbered and
indexed all our submissions . Give a statement of all the outstanding
invoices and Balance Owing by the defendant.
BUT, remember you can only go back TWO years! This is critical, since if you miss this
deadline for submitting your claim you will be quickly ushered away from the
judge. No sympathy for late filing.
Our submission
package included ALL past invoices incurred by the association, correspondence,
Insurance liability payments, annual meeting agenda and minutes, bank
statements, etc. Put everything about
your association that you have on file.
It may not be read by the judge, but it shows the organizational skills
of your association and a nice historical record.
We also included
submissions pertaining to “unjust enrichment”: Point Abino Association V Lee (Ontario
Court of Justice) 1996. In this Port Abino case, reference was made to
several other cases involving the concept of “unjust enrichment”: Rathwell v.Rathwell [1978] 2 S.C.R. 436, and Pettkus v. Becker, [1978] O.R. 105 Ontario
Court of Appeal (http://canlii.org/en/on/onca/doc/1978/1978canlii50/1978canlii50.html). Also mentioned is the Supreme Court of Canada Murdoch v.
Murdoch, [1975] 1 S.C.R. 423 (http://www.canlii.org/en/ca/scc/doc/1973/1973canlii193/1973canlii193.html). Although we included these articles in our Plaintiffs
Claim, it is not really necessary, actually it is ‘overkill’, but actually
interesting reading.
The clerk at the
small claims office will stamp the Plaintiff’s Claim form with a red seal. The Plaintiff’s
Claim must be presented to the defendant and you require an affidavit of proof
that this occurred. Since our
non-compliant cottagers refused to accept registered mail from our association,
or simply dismissed them, a process server was engaged to serve the paperwork. A website was found for the address area of
a process server nearest the cottager’s
permanent residence. There is an upfront
credit card fee and the company will refund any unused amount. . For
this we used Canadian Process Servers. http://www.canadianprocesserving.com You need to send them two copies of your
submission. One copy can be presented
directly to the defendant, or if not able to contact the defendant, it can be
left with an adult at the residence and the second copy should be mailed the
next day. The process server will phone
you with results and send you an affidavit for use at future court cases. Judges like to see process servers involved
since it is specified that the defendant was served; they do not want to hear “well I told the
defendant about it”. But don’t expect
the process service agency to give you advice on your litigation.
After 20 days,
you can check with the small claims office to see if the defendant is contesting
the claim; you have lots of time to check this out. The office will also contact you and send you
a copy of the defendant’s defense if the plaintiff’s claim is disputed. This will come in a Notice of Settlement
Conference, a given date and location and a blank proposed list of witnesses form that both plaintiffs and defendants must
file to each other and the court in adequate time before the case is heard.
The settlement
conference is held before a judge and the entire court room is cleared except
for witnesses and the opposing parties.
The judge asks both parties to state their case and each party can
question each other. If it is clear that
the parties cannot agree on a settlement, the judge will ask the parties about
how many witness they might call for a trial.
The judge will guess at the length in hours of a trial and suggest a
date. BUT, the judge really wants this
to be settled and suggested a meeting room in the court house for the parties
to settle. In our case, our association
proposed complete payment but we would exclude expenses incurred as part of the
filing fees. The defendant agreed to this concession. This was immediately reported and an Endorsement Record/Order of the Court
was signed by the judge.
If the defendant
does not contest the plaintiff’s claim after 20 days, you must go to the clerk
of small claims, show them proof that the defendant was served with the Plaintiff’s
Claim. This is made easy with a process server’s
Affidavit of Service. The defendant is
now in default. You must fill out a
Request to Clerk (form 9B) and ask for an Assessment Hearing before a Judge.
The
clerk will assign a date to appear before
a judge. The defendant is NOT notified
since this person is now in default. You
must state your case in summary form under oath before a judge. The judge will check the 2 year limit and
your invoice of fees requested and if
the judge agrees with your argument, the judge will write up an Endorsement
Record for the amount the defendant must pay including expenses and interest. This is a court order. This requires the association to have the
document served on the defendant with an affidavit showing the person was served. We
sent a regular post letter to the defendant s with a copy of the judge’s
decision and waited a length of time before considering using a process server. It is always best to let the defendant have
time to make a decision and perhaps pay the required amount rather than
continuing the process. This resulted in 2 defendants paying the full
amount and avoiding further litigation.
Now comes a
difficult case. All the proceedings
described above occurred in the jurisdiction of the cottage property and
association. But, if the defendant still avoids paying, the next step is to take
the defendant to an Examination Hearing.
But, you must contact a small claims court in the defendant’s permanent residence
location. This might be several hundred
kilometers away. The reason for leaving
the cottage property’s jurisdiction is if the defendant does not show up for an
Examination Hearing after being notified by a process server, the defendant
will be in contempt of court and can be picked up by local police, thus not
forcing police to travel out of their area.
In addition, the government form states that a person in contempt of
court can be jailed up to 40 days.
Since the
defendant ‘s residence is outside the territorial jurisdiction of the cottage
location, it was required that a Certificate of Judgement, and Affidavit for Jurisdiction (Form 11A), Affidavit for Enforcement Request
(form 20P) be forwarded to the new small
claims court. Basically, the new court
wants documents showing you worked through the process in your area and want to
continue in a new jurisdictional area. You can submit these to the court in the
mail and they will forward an Examination Date.
Obtaining the phone number of the new small claims court can also assist
you in finding filing costs and checking to see if your forms have been
received.
Once you have a
date for an Examination Hearing, the
defendant must be served directly. But as you might guess, the defendant may be
hard to find and serve. Although the
municipality can give you an address for the defendant, the person may never
answer the door to a process server.
This was a problem for us. The
process server could not make contact with the defendant in our case.
The next step is
to fill out a form for Substituted Service and ask for a date before a
judge. If you explain about your problem
contacting the defendant, the judge can
sign off on a mailing to the address that you have. This will be suitable notification by the
court. If the
defendant still refuses to comply after receiving the judge’s form, the person
is in contempt of court and can be picked up by the police and taken before a
judge if the defendant does not show up at the Hearing.
For the
Examination Hearing, the defendant must fill out an onerous financial
information sheet and present it to the plaintiff before the hearing. This includes bank information, employer
information, rent, other assets, etc
Wanting to end
this process before we hired another process server, our association sent a
regular post letter to the defendant stating that our next step would be a
Substituted Service hearing before a judge and the defendant would be compelled
to attend and present a detailed financial disclosure form at an Examination
Hearing. We gave the defendant one more
chance to pay. Showing that we were
serious, we received payment from the defendant. Case closed.
Before starting
the small claims process, you must weigh the costs in time and filing
fees. “Unjust enrichment” is well
established in law and your association will certainly come out on the winning side if you have the courage to push the
issue to the end. The process is well
laid out in the small claims regulations. You may find that the judges also own
cottages and are familiar with people
who try to avoid paying cottage associations fees. Sending
regular post letters to inform the
defendant of your next step and asking them for payment to terminate the
process is certainly easier than pushing process servers on them.
There are set
fees that the judge can assign to cover the association’s expenses, but it
certainly will not cover all the costs.
If you persist, you will win with every cottage owner contributing to the association and have more
money to maintain the cottage road.
You do not have to be a lawyer to work
through the small claims process, although with the limit at $25,000, there will
certainly be lawyers in court. Our
association found that the amount of time and forms to be completed show that
lawyers earn their fees. Lawyers are
usually first on the docket since their time is valuable. This is a benefit since you can observe other
cases.
You might sit in
on small claims court to get a feel for the process. We were surprised to see a person brought
into the court in handcuffs because this person was in contempt of court. Another case was dismissed quickly for
missing the two year deadline. Another
person showed up for an Examination Hearing without having the financial
information sheet filled out and the judge sent the person and his
representative into the back room.
Another case could not present an affidavit showing a defendant had been
notified. Judges expect you to be
prepared.
It took us two
years to get payment from four cottagers.
Hopefully we will not repeat this two years from now.
