Before taking a lawsuit against someone, it is recommended, and even sometimes mandatory, to send them a letter called a “demand letter”. This letter formally requests that the other person do what they have to do.

In this letter, the creditor:

• clearly explains what the dispute is about;
  
• asks the debtor to resolve the situation within the time frame given in the demand letter;
  
• warns that she intends to take legal action against the debtor, if the dispute is not resolved within that time frame.

The rules concerning the demand letter are complex and varied. Just remember that it is strongly recommended not to take any chances and to send one to the debtor in all cases.

There are several advantages to sending a demand letter. For example, the letter itself might be enough to convince the debtor to satisfy the creditor’s demands. The demand letter could also lead to negotiations that may help to resolve the dispute.

Lastly, if legal action is taken, the date the debtor received the demand letter on is often used as the starting point for calculating interest. For more information, consult our Infosheet: Demand letter.

The “application” is a written document in which the plaintiff outlines the main points of her dispute with the defendant. The application marks the beginning of the lawsuit taken by the creditor against her debtor.

At this stage, the plaintiff pays the court fees and files the application with the court clerk at the courthouse. The application must be supported by a sworn statement and by the documents that the plaintiff intends to submit as evidence. In the statement, the plaintiff agrees or declines, in writing, to take the conflict to mediation. We will return to the issue of mediation a little later.

For more information, consult the “How to Prepare” section of this court.

Where to file the application

When a person wants to sue another in the Small Claims Division, she can choose to proceed before the court where:

• The defendant lives;
  
• The events at the heart of the dispute took place; or
  
• The contract was made or concluded.

When the plaintiff lives more than 80 km away from the defendant, the plaintiff can file her application with the court clerk in her own area (district) but the proceedings must still take place in a district chosen from the list above. The clerk in the plaintiff’s home district will transmit the application to the clerk in the district where the plaintiff chooses to proceed. The defendant, as we will see later on, can request that the hearing take place somewhere else.

The court office (“greffe”) and clerk

The clerk of the Small Claims Division, an officer of justice, is in charge of the small claims files. He is the one who receives the application and collects the court fees at the counter of the court office. The clerk has a duty to help the parties by giving them information or even by writing some of the paperwork for them.

The clerk has the power to refuse an application, particularly when it does not conform to the admissibility criteria required by the Small Claims Division. This is the case if, for example, the amount claimed exceeds $7,000, the litigation concerns an apartment lease, or the plaintiff is a business with more than five employees bound by employment contracts. The plaintiff can contest the clerk’s refusal before a judge no later than 15 days after learning about the clerk’s decision.

After receiving the application, the clerk ensures that the defendant receives a copy of it, along with a list of the plaintiff’s supporting documents. These will be sent by registered mail, or will be delivered by a bailiff. This process is known as “service” or “notification”.

The co-plaintiffs and the co-defendants

When several plaintiffs share the same reasons for suing the same defendant, they can file a joint action together. However, the judge can decide to treat each claim separately.

It is also possible for the plaintiff to sue several defendants at the same time. We then call these co-defendants. For example, a plaintiff sues both the vendor and the maker of a piece of furniture that was delivered in bad condition.

Once the application is submitted to the court clerk, the defendant must learn about it. That’s why the clerk serves him a copy of the application, along with a list of the supporting documents filed by the plaintiff and a notice setting out the options available to him. This step is called the ‘notification’. Usually, the clerk notifies the defendant by sending him the documents by certified or registered mail.

The defendant then has the following three options:

• Pay the amount claimed by the plaintiff;
  
• Settle on a different amount with the plaintiff and send a copy of the settlement to the clerk;
  
• Contest the application.

Whatever his choice, the defendant must respond to the application within 20 days of being notified. If he fails to indicate an option to the clerk within the 20 day period, a judgment can be made on the application in his absence without further notice or delay. The defendant must submit to the judgment as if it had been made in his presence, following a hearing. For more on this subject see step 10 on "The judgment".

The defendant who receives an application can choose to pay the full amount claimed by the plaintiff. The defendant can also negotiate with the plaintiff in order to amicably settle the dispute. Finally, if he totally or partially disagrees with the claim, the defendant can contest it. For all of the above options, the defendant has 20 days to indicate his choice to the court clerk.

Payment of the full amount claimed

If the defendant wants to pay the amount claimed, he can pay the plaintiff directly or submit the payment to the clerk at the courthouse. The payment must cover the amount claimed, the court costs, and the interest.

Settlement

The defendant can also negotiate with the plaintiff to resolve the dispute. They can decide together on the amount to be paid or they can agree on a way to pay the whole amount claimed. This often occurs when a defendant is unable to pay the amount claimed in a single installment.

The defendant who chooses this option must send the plaintiff a proposal to settle the dispute. This proposal can be made in writing and directly on the form provided by the clerk. If the parties come to an understanding, they must both sign and deposit the written agreement at the office of the clerk. One of the two parties can ask the clerk or the judge to approve the agreement, which would then have the same value as a court judgment.

If the plaintiff does not accept the proposed settlement, the defendant has the choice to either pay the amount claimed or to contest the application.

Contesting (disputing) the application

A defendant contests the application when he does not agree with its grounds (reasons) or conclusions (what the plaintiff is asking for), and he would like to tell the judge about his side of the story.

The defendant must state his reasons for contesting the application on the form given to him by the clerk. He must include a list and attach the exhibits (example: documents, pictures) that might be used as evidence. He must hand in his “contestation” at the court office and pay the court fees associated with it. The contestation must be supported by a sworn declaration.

The clerk will then serve the plaintiff with a copy of the defendant’s completed form, including the list of the defendant’s exhibits, if any.

For more information, consult the "How to Prepare” section of this court.

Mediation

If the defendant chooses to contest the application, he can request that the file be submitted to mediation. To do this, he must fill out the appropriate section of the form provided by the clerk. Please note that choosing mediation does not stop the 20 day delay for filing a contestation from running out. The defendant still has to do this or a judgment can be made in his absence after 20 days have passed from the moment he received the application.

If both parties accept to try to settle the dispute by going to mediation, they are summoned to a mediation session by the clerk. If one of the parties does not want mediation or decides to no longer participate in mediation, the clerk ensures that the file is brought to court. A date is then set for a hearing.

Whether they choose mediation or a hearing before a judge, the parties will always receive a notice detailing when and where the mediation session or the hearing will take place.

The province of Quebec is divided into different judicial regions called districts.

All claims in Small Claims Court must be filed in the district chosen by the plaintiff from the possible options given by the law (see 2. The application). The defendant, however, can also request that the case be heard in a different district from the one chosen by the plaintiff. For example, let’s suppose that the case relates to an accident that happened in Québec City. The defendant lives in Montreal and the plaintiff in Gaspé. If the plaintiff filed her claim in Québec City, the defendant could request that the file be transferred to Montreal.

To do this, the defendant must complete the section of the form called “Application for referral”. Once this is done, the clerk advises the plaintiff of the request to transfer the case. Only the judge can accept or refuse the transfer request. The clerk communicates the judge’s decision to the parties. If the judge accepts the transfer, the file is then passed on to the clerk in the new district and the proceedings continue as if the claim had been made there.

In some cases, the defendant can contend that it is not him, but another person, who should be held responsible for the claim. The defendant can involve this other person in the lawsuit. This procedure is called a “recourse in warranty”.

For example, suppose you buy a new television from a retailer. The television works well, and after a few weeks, you decide to resell it to your neighbor. Shortly after, your neighbor tells you that the television is no longer working. The repair shop that he took it to told him that there was a defect in the manufacturing. Your neighbor sues you for the cost of the television. You “implead” (involve) the retailer or the manufacturer “in warranty” because you believe that he is the one who should be held responsible for your neighbor’s claim.

The defendant who calls another person in warranty has to explain his reasons in the section of the form entitled “Impleaded party”. The defendant should also give a list of documents proving that the party called in warranty should be the one held responsible. The defendant then pays the court fees requested.

The clerk advises the plaintiff of the recourse in warranty and sends a copy of both the application and the defendant’s contestation to the person called in warranty. The clerk includes a copy of the list of exhibits submitted by the plaintiff and by the defendant. The clerk also advises the person called in warranty that he must go to court at the defendant’s request, so that he can express his point of view at the hearing.

In some cases, the defendant not only wants to contest the claim but also to obtain a sum of money or something else from the plaintiff. In these cases, the defendant can make a counter claim called a “cross demand”. This procedure allows both parties to give evidence on two applications at the same hearing. The defendant who makes a cross demand is called the “cross plaintiff” and the original plaintiff is called the “cross defendant”.

For example, suppose a plumber comes over to your house to fix a leak. After he leaves, you notice that although he fixed the leak, he damaged your bathroom wall. You refuse to pay his bill and the plumber sues you. You make a cross demand in which you ask him to pay for the repair of the bathroom wall.

You can make a cross demand by filling out the section in the defendant’s form called “cross demand”. You also have to support your claim with a sworn declaration. Please be aware that the cross demand must originate from the same source as the principal application or from a related source. It must also satisfy the requirements applicable to the Small Claims Division.

Mediation is a process where a neutral third party intervenes in the dispute between the parties so as to help them negotiate a fair agreement.

If all of the parties write in their paperwork that they wish to submit their dispute to mediation, they will receive a notice telling them the date and place of the mediation session. Mediation is free. When the parties are summoned to a mediation session, they submit their dispute to a lawyer or to a notary who has been certified as a mediator by their respective professional order. The mediator examines the dispute and the evidence. The mediator then helps the parties find a solution to their dispute. If mediation fails, the mediator reports back to the court. The clerk will then take the necessary steps so that a hearing can take place before a judge.

Drafting an agreement
If the parties agree during mediation, they draft and sign an agreement. They then file the agreement or a notice at the office of the court to confirm that the case ended in a settlement. If the agreement is filed, it is approved by the clerk or the judge and then has the same value as a court judgment.

Confidentiality in mediation
It is important to note that during mediation, the offers made by the parties or the conversations that were held between them in order to try and settle the matter, cannot be put into evidence or even discussed before a judge, unless both parties agree.

If mediation fails, however, the mediator drafts a report for the judge. In this report, the mediator summarizes the evidence of the parties and pinpoints the exact issues on which the parties failed to agree.

It is then that the parties present their evidence to the court, through their witnesses and documents. During the hearing the parties try to convince the court of their respective points of view.

If no agreement is possible, the application goes before a judge at a public hearing so that she can reach a decision after considering the evidence given. If a hearing must take place, the parties will receive a notice of hearing in the mail. This document is a summons to the court, stating the time and place of the hearing.

For more information, please see the section “How to prepare”.

How the hearing unfolds
On the day of the hearing, once the parties have entered the courtroom, the clerk swears them in. Then, the judge directs the hearing:

• She briefly explains the rules of evidence and procedure that apply to the parties;
  
  
• She asks the parties and witnesses questions;
  
  
• She checks the quality of the exhibits handed in as evidence;
  
  
• She assists each of the parties equally and without bias;
  
  
• If it is appropriate, she tries to reconcile the parties.

The judgment is the decision of the judge regarding the application or the cross demand (amongst other things). The judge can reject the application or accept it in whole, or in part. The judge can give her judgment immediately after hearing all of the evidence that the parties had to present. We would then say that the judge rendered her judgment “from the bench”. The judge can also choose to give her decision at a later date in order to think about the case or to verify certain things. This time where the judge gives some thought to the matter is called the “deliberation”.

When the judge grants the application she can, for example, condemn a person to pay a sum of money or order a person to comply with a contract.

The judgment is final. It cannot be appealed. This means that a party unsatisfied with the judge’s decision cannot contest it before another court, except in very rare situations.

Written or verbal judgment

The judgment on an application contested by the defendant must be made within 4 months of the hearing, in writing. Unless the judgment is rendered from the bench, i.e. in the presence of the parties, the clerk must send a certified copy of the judgment to the parties as soon as it is rendered. The clerk also sends a notice to the losing party, letting him know that the judge decided against him. The notice specifies that if this person fails to pay the amount due he risks having his property seized and—in certain cases—sold in a judicial sale. The seizure and sale are part of what we call the procedures for the forced execution of a judgment, as we will see later on.

The revocation of a judgment
It is possible for a party who was prevented from defending himself— due to surprise, fraud, or for another reason deemed sufficient by the judge—to request that the decision be revoked (cancelled). A revocation, however, is considered exceptional and only applies where there are very serious reasons. For example, forgetting to show up at the hearing is not a sufficient reason to justify a revocation. On the other hand, if the defendant was not at the hearing because, for example, he never received the notice of hearing, he is more likely to succeed. Revocation is not a way for a losing defendant to contest a decision with which he disagrees.

The request for revocation must be made in writing, using the “Application for revocation of judgment” form. The application must be supported by a sworn declaration. There are costs for presenting this motion which must be filed at the court office no later than 15 days after the party requesting the revocation learns of the judgment. The judge or clerk examines the request for a revocation and decides if it is admissible. If the request is accepted, the procedures for the forced execution of the judgment are suspended. The clerk then informs the parties, who are summoned to court again.

If a judge orders one party to pay money to the other party, the losing party must respect this judgment within a short period of time. This stage is called the execution of the judgment. If the condemned party does not fulfill his obligation to pay, the creditor (the person owed money) can legally force him to pay.

Time limits for executing the judgment
If the judge orders a party to pay a sum of money, this party must respect the judgment within 30 days. In the case of a judgment rendered following a hearing where the defendant was absent, the time limit to pay is 10 days.

Voluntary or compulsory execution
If the condemned party willingly obeys the judge’s decision, the judgment is executed and the proceedings will be over. If the condemned party does not fulfill his obligation to pay, the creditor can legally force him to respect the judgment. To do so, the creditor would initiate the procedures for a compulsory execution of the judgment.

The law provides tools to the party wishing to execute a judgment by force so that she can learn about her debtor’s financial situation and seize part of his salary or of his goods and put them for sale. The creditor can sell this property and pay herself with the proceeds.

For more information, consult the Infosheet “How to prepare” in the Small Claims Court section.

Execution: the responsibility of the creditor
The execution of the judgment is the responsibility of the creditor, not the court. At this stage, however, the creditor can still get help from a lawyer, a bailiff, or a clerk. In the case of a seizure, a bailiff must be involved because he is the only person allowed by law to seize and sell any movable property (as opposed to immovable property such as land and houses).