Running a business or freelancing means you’re likely to encounter clients who don’t pay their bills on time—or worse, don’t pay at all. If you're facing this issue, Small Claims Court can be an effective and relatively simple way to recover the money you're owed. In this blog post, we'll walk you through some things to consider about pursuing an unpaid invoice claim in Small Claims Court in Ontario.
What is Small Claims Court?
Small Claims Court is a branch of the Ontario Superior Court of Justice. In Small Claims Court, you can resolve legal disputes involving claims up to $35,000. It's a more accessible, affordable, and less cumbersome way to seek a legal remedy, as compared to starting a claim in Superior Court.
When Should You Take an Unpaid Invoice Claim to Small Claims Court?
Before heading to court, it is important to understand whether Small Claims Court is the right venue for your claim. You can file a claim in an Ontario Small Claims Court if:
The amount owed is $35,000 or less: The maximum amount you can recover from a claim in Small Claims Court is $35,000 (plus interest and costs). If the amount owed to you is slightly more than $35,000, you may consider forgoing the part over and above $35,000 in order to be able to bring your case in Small Claims Court.
The other party is within Ontario and/or the transaction occurred in Ontario: The court has jurisdiction over the claim as long as the defendant (the party owing the money) is based in Ontario and/or if the transaction occurred within Ontario.
You’ve tried other methods: Court is typically a last resort. Before filing a claim, consider attempting to resolve the issue through direct communication. Just remember that you only have 2 years to sue from when your claim arose, so don’t wait longer than that!
Documents and information you’ll need to gather
Before starting a claim for an unpaid invoice, you'll want to gather the following documents:
The contract or agreement: Whether it's a written contract or an email exchange, you need evidence of the agreed-upon terms and the amount owed. If there was no contract or agreement, that may be fine too, but you should include the contract if there was one.
Copy of the unpaid invoice(s): Your invoice should clearly state the amount due, payment terms, and the deadline for payment. It’s also beneficial to have proof that the invoice was sent (such as email records or delivery confirmation).
Records of any communications about the unpaid invoice: It can be helpful to include any record you have of your efforts to collect the debt (via follow-up emails, phone calls, or demand letters).
In addition to the above list of documents, you will also need the following information:
The defendant’s details: This includes the full name, business name (if applicable), and address of the person or company you're suing.
Details of the unpaid invoice: Set out the amount of the debt, the date the service was performed or the product was ordered/delivered, a summary of the transaction, and the specific terms of the agreement.
The relief you're seeking: This is typically the unpaid amount, any interest, and additional costs you've incurred to recover the debt.
Taking the next step
Taking an unpaid invoice claim to Small Claims Court in Ontario can be a cost-effective and efficient way to recover money you're owed. While the process may seem daunting, the team at Small Claims Solutions is here to help!
Once you have considered the above and gathered the necessary information and documents, our team at Small Claims Solutions would be happy to draft the Statement of Claim for you. You can contact us here, or send an email to info@smallclaimssolutions.ca, or give us a call 437-290-5200. We look forward to assisting you!
NOT LEGAL ADVICE: This Blog is for informational purposes only. It should not be taken as legal advice or a legal opinion without seeking appropriate legal or professional advice. Small Claims Solutions does not act for you until we have confirmed a solicitor-client relationship. Small Claims Solutions makes no representations or warranties as to this Website’s content, accuracy, completeness, currency, or fitness for any purpose.
Comments