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Small Claims Court Limit
Involves Net From Set-Off Upon Sum Assessed
Last Updated: August 26 2026
Question: In Ontario Small Claims Court, is a set-off amount calculated from the court’s $35,000 judgment limit or from the higher assessed amount where the claim is above the limit?
Answer: Paladin LLP can help you understand how Small Claims Court jurisdiction works with set-offs in Ontario: in general, the $35,000 limit applies to the net judgment the court may award, not to the starting assessed figures used to compute that net amount. In cases like 2146100 Ontario Ltd. v. 2052750 Ontario Inc., 2013 ONSC 2483, the court treated the process as assessing amounts owed and then applying the set-off from the assessed amounts, as long as the resulting net judgment stays within the court’s monetary jurisdiction. If you are facing a counterclaim or set-off issue, contact Paladin LLP at (289) 925-1572 for a free 1 hour consultation with an Ontario paralegal to review your claim and calculate the proper net judgment approach.
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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
In the Small Claims Court, a limit of $35,000, exclusive of legal costs and interest, currently applies; however, this limit applies to the amount that may be awarded as a Judgment rather than a limit upon the sums that may be assessed by the Small Claims Court. Furthermore, in cases where a set-off amount applies, the set-off is calculated from the assessed amount rather than from the award limit.
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. When determining the net Judgment award due, the Judge used the $42,000 assessed amount and applied the $21,000 set-off amount. Subsequently, upon Appeal, it was argued that the set-off should be calculated from the court jurisdiction limit rather than the assessed amount. The Divisional Court disagreed with the argument and upheld the Judgment from Trial.
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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