Lien actions cannot be commenced in Small Claims Court. Section 50(1) of the Construction Act (“Act”) specifies that a lien claim is only enforceable in an action in the Superior Court of Justice. However, litigating a lien action in the Superior Court of Justice can be costly, particularly if the amount of the claim is below the $35,000.00 threshold for Small Claims Court. Referral to the Small Claims Court is a cost saving technique, taking into consideration that parties will avoid the costs associated with examinations for discovery, full production, pre-trial conference hearings and potentially trial.
Section 58(1)(c) of the Act provides that if the action is for an amount that is within the monetary jurisdiction of the Small Claims Court a judge may refer the whole action or any part of it for trial to a deputy judge of that Court or to the Small Claims Court Administrative Judge.
While the Act permits such referrals, the steps in the referral process are not very clear. There are no guidelines or Practice Directions that outline how the referral process between the Superior Court of Justice and the Small Claims Court takes place.
Outlined below is a step-by-step guide to refer lien actions to the Small Claims Court:
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