Executive Summary: Key Legal and Evidentiary Issues

• The plaintiffs moved to transfer four Small Claims Court actions and consolidate them with a newly commenced Superior Court action.
• Defendants resisted the motion, characterizing it as an abuse of process and a "bait and switch" designed to raise costs and litigation risk.
• Section 107 of the Courts of Justice Act governs the consolidation of proceedings pending in different courts and permits a stay as an alternative to transfer.
• Transfers out of Small Claims Court are granted rarely, with the onus on the moving party to show the original filing was a mistake or that a just and fair adjudication requires the transfer.
• Injunctive relief is unavailable in Small Claims Court, but the court will refuse transfers sought only to access procedures unavailable in that forum.
• Ultimately, the court dismissed the motion, stayed the Superior Court action, and directed the consolidated Small Claims actions to proceed to trial.

Facts of the case

The Phalan R.C. Flying Club Inc. (referred to in the decision's background as the Phelan R.C. Flying Club Inc.) was founded in 1988 to provide a facility for enthusiasts of radio remote controlled model aircraft. It operates the Lou McDonald airfield on Phelan Rd. E., a rural location in the City of Ottawa, maintains an asphalted runway, and is registered with the Model Aeronautics Association of Canada. In 2019, John and Karine Hauser purchased the residential property directly across the road from the flying club. They object to the noise made by the model airplanes and to flights of model aircraft and drones which they claim sometimes overfly their property. Shortly after moving in, the plaintiffs launched a series of complaints to the Club, the City, Transport Canada and other authorities. Mr. Hauser has operated a website, "dangerousdrone.ca," identifying public safety concerns about the Club, and has repeatedly video recorded its operations, leading to confrontations with members and officers and to claims and counterclaims of trespass, harassment, threatening and assault. Beginning in 2021, the plaintiffs launched two Small Claims Court actions against individual Club members. Their original claim for injunctive relief in one action (SC-21-160418) was struck by order of Deputy Judge Conway on December 17, 2021, after which the plaintiffs continued to seek monetary damages. On January 24, 2023, the Club issued its own Small Claims action against John Hauser (SC-23-163589), seeking damages for intentional interference with economic relations, nuisance, and loss of enjoyment of property, claiming his conduct caused a significant drop in membership. At a settlement conference on May 16, 2023, Deputy Judge Knutsen ordered, on consent, that two of the Hauser claims be tried together with the Club's claim. The plaintiffs issued a further claim against another member on June 19, 2023 (SC-23-164388), and on October 3, 2023, Deputy Judge Stauffer ordered all four actions tried together, recording the parties' agreement that no further claims would be brought against other members before trial. On April 29, 2024, the plaintiffs commenced the present Superior Court action seeking temporary and permanent injunctions, an order closing down the Club's operations, termination of its lease, declaratory relief, damages and punitive damages, and then brought this motion to transfer and consolidate the Small Claims actions with it.

Statutory provisions at issue

Because this was a procedural motion, the contested provisions were statutory rather than contractual. The plaintiffs relied on s. 107 of the Courts of Justice Act, under which, where two or more proceedings are pending in different courts and have a question of law or fact in common, claim relief arising out of the same transaction or occurrence, or for any other reason ought to be the subject of an order, the court may transfer and consolidate the proceedings, have them heard together or sequentially, or stay any of them until the determination of another. Subsections 107(2) and (3) prohibit transferring a Small Claims proceeding to the Superior Court, or requiring it to be asserted as a counterclaim there, without the consent of the plaintiff in the Small Claims proceeding. The court also noted that s. 23(2) of the Act specifically permits moving cases from the Superior Court into Small Claims Court, that s. 23(1.1) prohibits commencing matters within Small Claims jurisdiction in the Superior Court, and that no specific legislative provision exists to transfer a Small Claims proceeding to the Superior Court, though a judge retains inherent jurisdiction to do so in rare cases.

The court's reasoning and analysis

Justice MacLeod observed that the Small Claims Court, although a branch of the Superior Court of Justice since September 1, 1990, is treated functionally as a separate court intended to be a simple and efficient method of adjudicating relatively modest monetary claims, and is now the busiest civil court in the province measured by the number of claims. While there can be legitimate reasons to transfer an action to the Superior Court where justice requires it, the court will not allow a strategic choice by the plaintiff followed by a prejudicial transfer that duplicates costs, promotes delay, is unfair to the defendants, or undermines the legislative intention that Small Claims Court is an efficient and legitimate process. Drawing on the leading case, Segura Mosquera v. Rogers Communications Inc., the court noted that the discretion to transfer should be exercised rarely, the onus rests on the party seeking the transfer, and the court must be satisfied either that the Small Claims filing was a mistake or that a just or fair adjudication cannot be made without a transfer. Subsections 107(2) and (3) did not apply to three of the four actions because the plaintiffs were the moving parties, but the Club and members are the plaintiffs in the fourth action and did not consent. The defendants regarded the motion as a "bait and switch" to raise costs, complicate procedures and impose heightened litigation risks when the consolidated Small Claims action should be on the eve of trial. Although injunctive relief is not available in Small Claims Court, the plaintiffs had known that since their pleading was partially struck in December 2021, and transfers have been refused where the only reason is to access procedures unavailable in that forum. The court concluded that the plaintiffs could not show their initial choice of forum was a mistake or that a just result could not be obtained there, and stressed that the court will not condone procedural gymnastics to force a matter out of Small Claims Court if it can reasonably be adjudicated in that forum.

Ruling and outcome

In the result, the court dismissed the plaintiffs' motion and, exercising its discretion under s. 107(1)(d) of the Courts of Justice Act, stayed the Superior Court action, directing the parties to proceed to trial of the consolidated Small Claims actions on an expedited basis, with either party at liberty to move to lift the stay afterward if appropriate — for example, if the plaintiffs succeed and damages prove inadequate, or if urgency requires interlocutory relief. The successful parties on this motion were the defendants, Phalan R.C. Flying Club Inc. et al., who resisted the transfer. No monetary amount was ordered, granted or awarded in the decision; the court stated only that it may be spoken to concerning the costs of the motion, so no exact costs figure can be determined from the document.