Small Claims Applications and Procedures Pre-Trial (20:IX)

A. Offers to Settle

If a party rejects a formal offer to settle, the trial judge may order a party who rejected an offer to settle to pay a penalty of up to 20 per cent of the offer (Rule 10.1(7)). This can happen in one of two ways. If the defendant makes an offer that the claimant rejects and, at trial, the claimant is awarded an amount including interest and expenses that is equal to or less than the offer, the penalty is deducted (Rule 10.1(5)). If the claimant makes an offer the defendant rejects, and the claimant is awarded a sum including interest and expenses that equals or exceeds the claimant’s offer, the penalty is added onto the award (Rule 10.1(6)).

A formal offer to settle must be made using Form 18 and served on the party to whom the offer is made as if it were a Notice of Claim (Rule 10.1(1)). The party offering to settle may also fill out a certificate of service. Neither the Form 18 nor the certificate of service are filed at the registry; if the party making the offer wishes the penalties to apply, these forms should be presented to a judge for the first time after a decision is given at trial.

A formal offer must be made within 30 days of the conclusion of a:

• settlement conference;
• mediation under either Rule 7.2 or 7.4; or
• trial conference.

Once the first of any of these hearings has concluded and 30 days have elapsed, formal offers cannot be made without the permission of a judge (Rule 10.1(2)).

B. Withdrawing a Claim, Counterclaim, Reply, or Third Party Notice

A party may withdraw a claim, counterclaim, reply, or third party notice at any time (Rule 8(4)). To do so, a party must file a notice of withdrawal (Rule 8(4)(a), Form scl019) at the registry and then promptly serve the notice of withdrawal on all parties who had been previously served with the claim, counterclaim, reply, or third party notice (Rule 8(4)(b)). A Notice of Withdrawal may be served by ordinary mail or personal service (Rule 18(12)).

Once a pleading is withdrawn, it cannot be reinstated, used, or relied upon without the permission of a judge (Rules 8(6) and 16(7)).

Withdrawing a claim does not result in the dismissal of a counterclaim. The counterclaim may still proceed, unless it is also withdrawn. (See Ishikawa v Aoki and Japanese Auto Centre Ltd., 2002 BCPC 683 (CanLII)).

C. Adjournments and Cancellations

Once a date for a hearing, settlement conference, or trial has been set, any party can apply for an adjournment or to cancel the hearing (Rule 17(5)).

If seeking an adjournment, try to first obtain the consent of the opposing party prior to applying to a judge. If consent is given, Form 17 must be filed in the registry as soon as possible.

A trial will only be adjourned if a judge is satisfied that it is unavoidable and if an injustice will result to one of the parties if the trial proceeds (Rule 17(5.1)). There is a $100 fee (Small Claims Rules, BC Reg 261/39, Schedule A, Line 14) for adjournments where the application is made less than 30 days before a trial and notice of the trial was sent 45 days before the trial’s date (Rule 17(5.2)). The fee must be paid within 14 days of the granting of the adjournment (Rule 17(5.3)) or else a judge may dismiss the claim, strike out the reply, or make any order he or she deems fair (Rule 17(5.4)).

D. Pre-Judgment Garnishment

If the claim is for debt, a “garnishing order before judgment” may be issued at the same time a Notice of Claim is filed. Except for wages and interest, almost any debt can be garnished before a judgment. Since injustice can sometimes occur from the procedure, few garnishing orders are issued before judgment. Practically, the court will grant a garnishing order before judgment in only certain circumstances, for instance where the claimants will be unable to collect if they succeed. (See Webster v Webster, [1979] BCJ No 918; Affinity International Inc. v Alliance International Inc., [1994] MJ No 471; Intrawest Corp. v Gottschalk, 2004 BCSC 1317 (CanLII); and Silver Standard Resources Inc. v Joint Stock Co. Geolog, [1998] BCJ No. 2887).

To obtain a pre-judgment garnishing order, the claimant must file an affidavit stating that a Notice of Claim has been filed, the date of its filing, the nature of the cause of action, the amount of the debt, claim, or demand, and the true amount owing after discounts and deductions. (See Court Order Enforcement Act, RSBC 1996, c 78: s 3(2)).

If the registry grants the order, the claimant must serve both the garnishee and the defendant (http://thelawcentre.ca/self_help/small_claims_factsheets/fact_19). If the garnishee is a bank, the garnishing order must be served on the branch where the account is located. (See Bank Act, SC 1991, c 46, s 462(1)). If the garnishee is a credit union, the order must be served on its head office. A separate order must be obtained for each garnishee. The Garnishee must pay the greater of the amount owed to a Defendant and the amount shown on the garnishing order to the Court Registry. It is extremely important to find out the correct legal name of the Garnishee. This is because if you use the wrong name on the Garnishment documents, the Garnishee can refuse to pay to the Court money owed to the Defendant. If the Garnishee is a company, a search at the BC Corporate Registry Office would be useful.

In some cases of fraud, the Supreme Court can issue a Mareva Injunction freezing the defendant’s worldwide assets; this prevents the defendant from dealing with any of their assets in any way. (See Aetna Financial Services v Feigelman, [1985] 1 SCR 2; and Silver Standard Resources Inc. v Joint Stock Co. Geolog, [1998] BCJ No. 2887).

It is also possible to apply for a “garnishing order before action”. This is a separate form from a pre-judgement garnishment. This form is used before a Notice of Claim has been registered at a Small Claims Court Registry. (See http://thelawcentre.ca/self_help/small_claims_factsheets/fact_19).

E. Transfer to Supreme Court

A judge at the settlement/trial conference, at trial, or after application by a party at any time, must transfer a claim to Supreme Court if he or she is satisfied that the monetary outcome of a claim (not including interest and expenses) may exceed $25,000 (Rule 7.1(1)). However, the claimant may expressly choose to abandon the amount over $25,000 to keep the action in the Small Claims Court (Rule 7.1(2)). For personal injury claims, a judge must consider medical or other reports filed or brought to the settlement conference by the parties before transferring the claim to Supreme Court (Rule 7.1(3)).

If a counterclaim for more than $25,000 is transferred under this rule, the original claim can still be heard in Small Claims Court if the claim is $25,000 or less. (See Shaugnessy v Roth, 2006 BCCA 54).

F. Amendments

A party who wants to amend, change, add, or remove anything in a filed document, such as the amount, the name of a party (see Royal Bank of Canada v Olson, 1990 CarswellBC 54 (BCSC)), or a fact, must follow Rule 8.

1. Permission to Amend

Anything in any filed document can be changed by the party who filed it. Permission is not required unless any of the following have begun (Rule 8(1)):

• a settlement conference;
• a mediation under Rule 7.4;
• a trial conference under Rule 7.5;
• a trial under Rule 9.1; or
• a trial under Rule 9.2.

If any of these steps have commenced, the party must apply to a judge for permission to amend the document (Rules 8(1)(b) and 16(7)).

2. Amendment Procedure

Changes on the document must then be underlined, initialled and dated (Rule 8(2)). If a judge has allowed the amendment, the document should reference the order. For example, the document might state, “Amended Pursuant to Rule 8(1)(b) by Order of the Honourable Judge Law on September 1, 2012.”

3. Serving Amendments

Before taking any other step in the claim, the party must serve a copy of the amended document on each party to the claim (Rule 8(3)). If the amended document is a Notice of Claim, Counterclaim, or Third Party Notice, it must be served as if it was an original.

If the amended document is a Reply or some other document, it can be sent by regular mail to the address of each party to the action Rule 18(12)(b)). Documents served by ordinary mail are presumed served 14 days after being mailed unless there is evidence to the contrary (Rule 18(13)). While proof of service is not required, it is recommended.

4. Responding to Amendments

Generally, there is no obligation to respond to an amendment (Rule 8(3.1)). For example, a defendant’s current Reply may satisfactorily respond to a minor change to a Notice of Claim. If the defendant chooses not to file an amended Reply, the claimant cannot apply for a default order (Rule 8(3.2)).

A party who wishes to respond to an amendment should follow the same procedures outlined in this section.