Yukon Small Claims Counterclaim: What to Do When the Defendant Sues You Back

What a Counterclaim Is

You sue someone in Yukon Small Claims Court, and instead of just defending themselves, they file their own claim against you. That is a counterclaim — a separate cause of action the defendant brings within the same court file, asserting that you actually owe them money.

Counterclaims are common in disputes where both sides feel wronged. A contractor you are suing for unfinished work files a counterclaim for unpaid invoices. A former business partner you are suing for a missing deposit counterclaims for their share of partnership expenses. A buyer you are suing for non-payment counterclaims for defective goods.

In Yukon, the defendant files Form 03 – Counterclaim alongside their Form 02 – Reply. The counterclaim can be for up to $25,000, just like the original claim, and both are heard together at the same settlement conference and trial.

If a Counterclaim Is Filed Against You

When a defendant files a counterclaim, the court file now has two active claims — yours against the defendant, and theirs against you. You are suddenly both a claimant and a defendant.

You must respond. File Form 26 – Response within 20 calendar days of receiving the counterclaim. This is your reply to their claim, not a re-argument of your original claim. If you do not file Form 26 within the deadline, the defendant can apply for default judgment on their counterclaim — meaning you could win your own claim but lose on theirs.

Treat it seriously. A counterclaim is not a negotiating tactic that disappears at the settlement conference (though some do settle there). If it goes to trial, the judge considers both claims on their merits and may enter judgment on each independently. The possible outcomes include: you win your claim and the counterclaim is dismissed, the counterclaim succeeds and your claim is dismissed, both succeed and the amounts are offset against each other, or both are dismissed.

If You Want to File a Counterclaim

As a defendant being sued, you may have your own claim against the claimant. Filing a counterclaim makes sense when the dispute has two sides — not when you simply disagree with the claimant's version of events (that is what your Reply is for).

File Form 03 – Counterclaim with the registry at the same time as your Form 02 – Reply, or within the response window. Your counterclaim must have its own statement of facts explaining what the claimant owes you and why. It is a standalone claim that happens to be joined with the existing case.

You can also file a third-party claim (Form 04) if you believe someone not yet involved in the lawsuit is the one who should actually pay — for example, a subcontractor whose defective work is the real cause of the dispute between you and the claimant.

Practical Advice

Counterclaims raise the stakes. What started as your claim for $5,000 may now involve a total of $15,000 in dispute if the defendant counterclaims for $10,000. Prepare for the settlement conference and trial as both a claimant and a defendant — you need evidence supporting your claim and evidence defeating theirs.

Settlement becomes more complex but also more likely. With money potentially owed in both directions, the settlement conference often produces a net-payment agreement: one party pays the difference, the file is closed, and both walk away.

The offset possibility. If both claims succeed at trial, the judge offsets the amounts. If you win $8,000 on your claim and the defendant wins $3,000 on their counterclaim, the net judgment is $5,000 in your favour.

For the complete process — filing, replying to a counterclaim, preparing evidence, and what to expect at trial — the Making a Small Claim in Yukon guide covers every form and scenario.

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