In Ontario monetary claims for $25,000 or less are supposed to be heard in Small Claims Court. If a claim is brought before the Superior Court of Justice and the Court awards the plaintiff less than $25,000 the Court may refuse to award the plaintiff costs of the action as punishment for failing to bring the before the Small Claims Court.

The problem with the $25,000 monetary limit in wrongful dismissal cases is that judges have a great deal of discretion when deciding a plaintiff’s entitlement to reasonable notice of dismissal. In particular, cases involving short service employees have a wide range of outcomes. As a result, it is not uncommon for the range of possible outcomes in a wrongful dismissal action to overlap the $25,000 monetary limit. The dismissed employee is placed in the unenviable position of having to decide whether to limit their claim to $25,000 or claim a higher amount and risk the possibility that the judge will refuse to award costs if the damage award is ultimately less than $25,000.

A recent Superior Court decision gives some comfort to dismissed employees deciding whether to proceed in Small Claim or Superior Court. In Asgari v 975866 Ontario Ltd., 2015 ONSC 7508 the plaintiff commenced his action in Superior Court claiming $37.083.33 for the defendant’s failure to provide the plaintiff with reasonable notice of dismissal and $6,000 for failure to pay tuition. A claim for punitive damages was abandoned before trial.

Justice Dow ordered the defendant to pay the plaintiff $14,044.88 representing 3 months’ notice of dismissal and $6,000 for tuition. The judge rejected the defendant’s arguments that costs should not be awarded because the award was within the monetary jurisdiction of the Small Claims Court. In awarding $13,809.00 in costs (inclusive of HST) Justice Dow wrote at para. 15:

I am persuaded to allow the plaintiff his costs of this action at the Superior Court level and in accordance with my discretion under section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43. The evidence was tendered by affidavit instead of a trial which, whether in Small Claims Court or the Superior Court, would likely have required viva voce evidence and inconvenienced those individuals whose evidence was tendered by affidavit. Aside from the amount of time spent by counsel for the plaintiff, the matter appears to have moved forward efficiently and within the culture shift referenced by Justice Karakatsanis in [Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87] as part of promoting timely and affordable access to the civil justice system.

Proceeding by way of summary judgment motion will typically be faster, cheaper and more efficient than Small Claims Court for straightforward wrongful dismissal actions. It makes sense for judges to be flexible when ordering costs in decisions in which the range of reasonable outcomes could have resulted in the plaintiff being awarded damages in excess of $25,000 and the plaintiff has followed the most cost-effective and efficient route in pursuing his or her claim for damages.