How to Sue a Business for an Unpaid Invoice in British Columbia

By Lam Legal | Reviewed by Ada P. Lam

You completed the work, delivered the goods, or provided the service. Then you sent the invoice. But the business that owes you money still hasn’t paid.

You’ve tried reminders and perhaps even sent a formal demand letter. But the other business refuses to pay, disputes the charges, or simply ignores you.

At this point, you may be considering legal action, a decision that can be especially consequential for small businesses. In British Columbia, businesses can pursue unpaid invoices through the Civil Resolution Tribunal, Small Claims Court, or BC Supreme Court, depending on the circumstances.

Here’s what you should know before filing a claim.

Short Answer: Can You Sue a Business for an Unpaid Invoice in BC?

Yes. If you’re owed money by a business under an enforceable agreement, you may be able to sue for the unpaid amount. In BC, most eligible claims of $5,000 or less go through the Civil Resolution Tribunal (“CRT”). Claims between $5,000 and $35,000 generally go to Small Claims Court, while larger claims generally proceed through BC Supreme Court.

However, you must prove the debt, follow the appropriate legal procedures, and commence proceedings within the applicable limitation period.

If your amount is just over $35,000 or $5,000, you can also waive your claims above those limits and file your lawsuit in Small Claims or the CRT, which may be more approachable for someone without a lawyer.

What Evidence Do You Need to Sue for an Unpaid Invoice?

An unpaid invoice is useful evidence, but it doesn’t necessarily prove that the customer agreed to the charges or that you fulfilled your obligations.

Before filing a claim, gather:

Contracts, purchase orders, and written agreements.
Unpaid invoices showing amounts and due dates.
Emails and messages confirming the agreement.
Proof that goods were delivered or services completed.
Payment reminders and acknowledgements of the debt.
Records of partial payments or disputed charges.
A timeline showing when the agreement was made, the work was completed, payment became due, and collection efforts took place.

Keep original versions of invoices, emails, contracts, and other records wherever possible. Avoid altering the originals, as you may need to establish that the documents are authentic and unaltered.

These documents help establish what was agreed upon, whether your business performed its obligations, and how much remains unpaid.

You must also identify the correct legal name of the entity to sue, including whether there may be more than one defendant, such as both the business and an individual who signed a personal guarantee. We always advise conducting a company search through the BC Corporate Registry to ensure that you are suing the right entity.

If the customer disputes your performance, the matter may become a broader breach of contract dispute.

Which BC Court Handles Unpaid Invoice Lawsuits?

The amount you’re claiming generally determines where you should bring the dispute.

Civil Resolution Tribunal: Claims Up to $5,000

The Civil Resolution Tribunal (CRT) handles most eligible small claims of $5,000 or less.

Its online process typically involves an application, an opportunity for negotiation, facilitated resolution with the assistance of a neutral third party, and, if necessary, a binding tribunal decision.

Online CRT application fees for small claims are generally $75 for claims of $3,000 or less and $125 for claims between $3,001 and $5,000. Other fees may apply as the case progresses.

The CRT is not a court, but its monetary decisions, including a payment order, can generally be enforced through Provincial Court after the required filing steps.

Small Claims Court: Claims Up to $35,000

BC Provincial Court generally handles claims exceeding $5,000 and up to $35,000.

Small Claims Court uses less formal procedures than BC Supreme Court. You can represent yourself, although legal assistance may be useful if the debt is disputed.

If your claim exceeds $35,000, you may be able to abandon the excess to proceed in Small Claims Court. However, you generally cannot recover the abandoned amount later.

BC Supreme Court: Claims Over $35,000

Larger unpaid-invoice disputes generally proceed through BC Supreme Court, where commercial litigation follows more formal procedures.

The litigation process can involve document disclosure, examinations for discovery, court applications, and potentially a trial.

Our article on how long business litigation takes in British Columbia explains the factors affecting the timeline.

How Do You Start a Lawsuit for an Unpaid Invoice?

The court process depends on where you’re bringing the claim.

In Small Claims Court, you generally begin by filing a Notice of Claim identifying the parties, explaining what happened, and specifying the amount sought.

You must generally file at the Small Claims Court registry nearest to either where the defendant lives or carries on business, or where the transaction or event giving rise to the claim occurred.

You must then make sure the claim is formally served on the defendant according to the applicable rules.

In BC Supreme Court, a lawsuit generally begins with a Notice of Civil Claim, which sets out the material facts, legal basis, and remedy sought. It must also be properly served.

The defendant then has an opportunity to respond.

The filing fee and procedural requirements depend on where you bring the claim. Errors in identifying or serving the defendant can delay proceedings, or in extreme circumstances, cause the dismissal of your claim.

A demand letter is often worth considering before filing. It may resolve the debt without a legal proceeding, and although it is not a universal prerequisite to commencing a lawsuit, our firm will generally advise taking this step first.

A well-prepared demand letter should identify the unpaid amount, explain the basis for the debt, establish a reasonable payment deadline, and state the legal action you may take if payment is not received. The tone should remain firm, factual, and professional.

Before escalating to litigation, businesses may also consider a documented payment plan if the customer acknowledges the debt but is experiencing financial difficulty. Any agreement should specify payment amounts, deadlines, and what happens if payments are missed.

For earlier options to get invoices paid, see our guide to collecting unpaid invoices.

What Happens If the Business Disputes Your Claim?

A defendant may argue that the invoice is incorrect, the goods were defective, the work was incomplete, or the payment terms were different from what you claim.

They may also bring a counterclaim.

If the dispute proceeds to a hearing or trial, you generally must prove your claim on a balance of probabilities.

In Small Claims Court, the parties will usually attend a settlement conference before trial. A judge helps explore settlement and may make directions for preparing the case.

If settlement fails, the matter may proceed to trial if later negotiations also fail.

Can You Obtain a Default Judgment If the Business Ignores the Lawsuit?

Potentially, yes.

In Small Claims Court, the defendant files a Reply, generally within 14 days if served in BC. In BC Supreme Court, a defendant served within Canada generally has 21 days to file and serve a Response to Civil Claim.

If the defendant fails to respond within the applicable deadline, you may be able to seek a default order or default judgment.

For a straightforward debt involving a specified amount, this may allow you to obtain judgment without a contested trial.

However, you must satisfy the applicable procedural requirements, including proving proper service. A defendant may also seek to have a default judgment set aside in certain circumstances.

What Happens After You Win an Unpaid Invoice Lawsuit?

Winning doesn’t guarantee payment.

If the debtor refuses to satisfy the judgment, you may need to enforce it.

Depending on the circumstances, enforcement measures can include garnishing bank accounts, seeking seizure and sale of eligible assets, or registering a judgment against land.

In Small Claims Court, a payment hearing may also help determine the debtor’s ability to pay and establish a payment schedule.

However, enforcement becomes difficult if the business has few assets, has closed, or is insolvent.

Before investing in litigation, consider whether the debtor has sufficient funds or other assets to satisfy a judgment.

Lam Legal’s debt collection lawyers can assess the available enforcement options.

How Long Do You Have to Sue for an Unpaid Invoice?

Under BC’s Limitation Act, the basic limitation period for most debt claims is two years from when the claim was discovered.

For a straightforward unpaid invoice, the contractual payment deadline may be an important starting point. However, determining the precise limitation date can depend on the circumstances.

Certain acknowledgements of liability and partial payments may affect the limitation period if statutory requirements are met.

Ongoing negotiations do not automatically extend your deadline.

Sending reminders or a demand letter also does not, by itself, stop the limitation clock. Do not assume that ongoing collection efforts preserve your right to sue.

Our firm is conservative with respect to limitation periods, and you should aim to file within two years of the first contact or discussion leading to the creation of the contract to be safe.

There may also be other factors or laws applicable to your matter that shorten the limitation period, and you have less than two years to file. Missing a limitation date generally means your claim is gone.

Learn more about how long you have to sue for breach of contract in BC.

Is Suing for an Unpaid Invoice Worth the Cost?

That depends on the amount owed, the strength of your evidence, the debtor’s financial position, and the likely legal expenses.

Your contract may allow recovery of interest or collection costs, while court rules may permit certain expenses and costs to be awarded.

If your original agreement provides for late payment interest or fees, you may be able to claim those amounts, subject to applicable law. However, you generally cannot impose new late charges unilaterally after the agreement has been made.

Under section 4 of the federal Interest Act, a written contract that specifies interest at a monthly or other non-annual rate generally must also state the equivalent annual rate to recover interest exceeding 5% per year.

Where the parties have not agreed on interest, BC’s Court Order Interest Act generally provides for prejudgment interest on a monetary judgment at a rate the court considers appropriate, calculated from when the cause of action arose. After judgment, simple interest generally accrues at the prime lending rate of the provincial government’s banker, subject to the court’s authority to vary that rate.

However, successful parties do not normally recover all of their legal fees. Enforcing a judgment may involve additional costs.

Our article on who pays legal fees in business litigation explains how these costs are treated.

When Should You Contact a Debt Collection Lawyer?

If a business refuses to pay a substantial invoice, disputes your contractual rights, or ignores a formal demand, a litigation lawyer can help determine whether pursuing the claim is worthwhile.

At Lam Legal, we help businesses assess unpaid debts, pursue commercial claims, and explore judgment enforcement options under British Columbia law.

Book a Free Discovery Call or call 604-800-0774 to discuss your situation with Lam Legal Trial Lawyers.

This article provides general legal information only and is not legal advice. Debt recovery rights and procedures depend on the circumstances of each case.

Relevant Legislation and Resources

British Columbia legislation

Official court resources