Last Updated: August 22 2026
In a Small Claims Court case, is the set-off amount calculated from the capped court limit or from the assessed amounts?
In Vagans Legal Small Claims Court matters, the $35,000 monetary limit is about the net judgment the court awards, not the amount it may assess on each claim and counterclaim. Where a set-off applies, the set-off is calculated from the assessed amounts (the starting totals in the pleadings) rather than being taken from the court’s jurisdiction limit, as reflected in 2146100 Ontario Ltd. v. 2052750 Ontario Inc., 2013 ONSC 2483. If you want help modelling how your net judgment and set-off may be calculated for a claim exceeding the limit, call (416) 473-8472 to discuss your situation with a paralegal.
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If a Set-Off Applies In a Small Claims Court Case, Is the Set-Off Amount Based Upon the Court Limit As a the Maximum Starting Point?
If the Small Claims Court Assesses a Sum That Is Higher Than the Maximum Award Amount Allowed, the Assessed Amount Is the Basis For Reduction By Any Set-Off; Nevertheless, the Total Amount Granted Must Be Within the Court Award Limit.
Note: Please contact Vagans Legal by phone at: (416) 473-8472 to discuss any specific questions that you may have.
Understanding the Small Claims Court Jurisdiction to Award Judgment As Net Set-Off Despite An Above Limit Assessment
In the Small Claims Court, the amount that can be awarded as a Judgment is limited to $35,000, excluding legal costs or interest. This limit is separate 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 2146100 Ontario Ltd. v. 2052750 Ontario Inc., 2013 ONSC 2483, case confirms the point that the Small Claims Court may assess any sum of damages and may apply from that assessed sum, rather than apply from the monetary jurisdiction cap, an applicable set-off sum so long as the a net Judgment award remains within the court award limit. This basis for applying a set-off was confirmed whereas 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.
Within the 2146100 case, the Judge assessed slightly more than $42,000 on a counterclaim as brought against the Plaintiff. 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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