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Small Claims Court Limit
Involves Net From Set-Off Upon Sum Assessed
Last Updated: March 30 2026
Question: Does Ontario Small Claims Court use the monetary cap as the starting point when calculating a set-off, or does it start from the assessed damages amount?
Answer: In Ontario Small Claims Court, any set-off is generally calculated from the amount assessed (even if that assessment exceeds the court’s monetary limit), but the net judgment awarded must still stay within the Small Claims Court cap, as affirmed in 2146100 Ontario Ltd. v. 2052750 Ontario Inc., 2013 ONSC 2483. Hall Paralegal Services provides Ontario paralegal services that can help you apply this rule to your claim or defence, including pleadings, set-off calculations, and settlement strategy.
Does the Set-Off Amount in a Small Claims Court Case Take the Court Limit as the Maximum Possible Starting Amount?
If a Sum Is Assessed That Exceeds the Maximum Amount Allowed By the Small Claims Court, Any Set-Off Will Be taken From the Assessed Amount Rather Than Court Award Limit; However, the Total Amount Awarded Must Remain Within the Court Award Limit.
Understanding the Small Claims Court Jurisdiction to Award Judgment As Net Set-Off Despite An Above Limit Assessment
The maximum amount that can be awarded as a Judgment in the Small Claims Court is $35,000, excluding legal expenses or interest. This limit is distinct from the amount that may be assessed. Additionally, when a set-off amount is applicable, it is calculated from the assessed amount rather than from the cap upon the court award.
The Law
The case of 2146100 Ontario Ltd. v. 2052750 Ontario Inc., 2013 ONSC 2483, from when a limit of $25,000 applied to the Small Claims Court, confirms that the Small Claims Court may assess any sum and may apply from that sum, rather than from the court jurisdiction limit, a set-off sum when calculating a net Judgment award. Such principle was explicitly stated where it was said:
[17] In terms of the case at bar, the respondents expressly set out in their defendants' claim that they were owed over $42,000 from the appellants. They limited their ultimate recovery, however, to $25,000. Whether that limit is arrived at through set-off or abandonment of any sum over and above the monetary jurisdiction of the court is immaterial in my view: see Dunbar v. Helicon Properties Ltd., 2006 CanLII 25262 (ON SCDC), [2006] O.J. No. 2992, 2006 CarswellOnt 4580, 213 O.A.C. 296 (Div. Ct.).
[18] The respondents claimed a judgment of $25,000. They were awarded a judgment of $21,538.85. In my view, the process amounted to nothing more than the trial judge starting at $42,633 and making deductions for amounts owed to the plaintiff, to arrive at a net figure within the monetary jurisdiction of the court. This process is logically no different than assessing the value of a contract at $50,000, determining that $30,000 had been paid under the contract, leaving a balance owing of $20,000. There could be no doubt, in those circumstances, that the deputy judge had the jurisdiction to make a finding that the initial value of the contract was an amount in excess of the monetary limit of the court. But at the end of the day, it is the net judgment that matters. Here, the amount awarded was within the monetary jurisdiction of the Small Claims Court and did not exceed the amount claimed in the defendants' claim.
As occurred in the 2146100 case, the Judge assessed just over $42,000 on a Defendant's Claim as a counterclaim that was brought against the Plaintiff by the Defendant. The Judge also assessed a sum just over $21,000 on the Plaintiff's Claim as owed by the Defendant. In determining the net award due upon the Judgment, the Judge subtracted the $21,000 as a set-off from the $42,000 assessment rather than from $25,000 limit (at that time). Subsequently on Appeal, the Divisional Court upheld the manner in which the Judgment was calculated by dismissing the Appeal.
Summary Comment
The monetary jurisdiction limit of the Small Claims Court applies to the amount which the court may issue as a Judgment award rather than as a limit to an amount that the court may assess. This becomes important in cases where a set-off calculation is involved whereas the set-off sum is taken away from the assessed sum rather than taken away from the Small Claims Court limit.
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