CITATION: 1794279 Ontario Limited v. Nissan Canada Finance, 2018 ONSC 2452
DIVISIONAL COURT FILE NO.: 213/17
DATE: 20180417
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
1794279 ONTARIO LIMITED Plaintiff/Respondent
– and –
NISSAN CANADA FINANCE Defendant/Appellant
Eldar Babayev, for the Plaintiff/Respondent Gregory W. Bowden, for the Defendant/Appellant
HEARD at Toronto: March 7, 2018
REASONS FOR JUDGMENT
Cavanagh J.
Introduction
[1] The Appellant Nissan Canada Finance (“Nissan”) appeals from the judgment of Deputy Judge Levin of the Toronto Small Claims Court dated April 24, 2017 in which he granted judgment for unjust enrichment in favour of the Respondent 1794279 Ontario Limited (“179”) in the amount of $15,594.
[2] The judgment was for an amount equal to the charges by 179 to its customer, for whom it had provided automobile repair services, together with storage fees. The customer failed to pay the charges. 179 discovered that the customer’s vehicle was financed by Nissan, and it claimed a lien on the vehicle under the Repair and Storage Liens Act, R.S.O. 1990, Chapter R. 25 (“RSLA”).
[3] 179 provided Nissan with an invoice for the repair charges, including storage fees. Nissan did not pay the invoice, and it deposited the amount claimed into court and, pursuant to the RSLA, it obtained a discharge of the lien against the vehicle and possession of the vehicle. Under the RSLA, 179’s lien became a charge upon the amount paid into court. 179 was required to commence an action within 90 days to recover the amount paid into court, and failure to do so would, under s. 24(14) of the RSLA, result in a discharge of the charge. 179 failed to do so and, as a result, its charge upon the amount paid into court was discharged. 179 consented to an order paying out to Nissan the amount that Nissan had paid into court. 179 pursued a claim against Nissan for unjust enrichment.
[4] The trial judge addressed Nissan’s submission that there can be no claim against Nissan on the basis of unjust enrichment or quantum meruit and held that 179 was entitled to advance this claim. The trial judge granted judgment in favour of 179.
[5] Nissan submits that the trial judge erred in granting judgment in favour of 179 for unjust enrichment and asks that the judgment be set aside and that judgment should be granted dismissing the action or, alternatively, that a new trial be ordered.
[6] For the following reasons, Nissan’s appeal is dismissed.
analysis
[7] The issues on this appeal are:
a. Is Nissan entitled to raise as a ground for appeal that the trial judge erred in finding that 179 complied with the Consumer Protection Act, 2002 (“CPA”) when it did not defend the action at trial on this ground?
b. If Nissan is entitled to rely upon this ground for appeal, did the trial judge err in finding that 179 complied with the CPA?
c. Did the trial judge err in granting judgment against Nissan for unjust enrichment in circumstances where 179 had asserted a lien under the RSLA and lost this lien (and the replacement charge on money paid into court) because of the operation of the RSLA?
Is Nissan entitled to raise as a ground for appeal that the trial judge erred in finding that 179 complied with the Consumer Protection Act, 2002 when it did not defend the action at trial on this ground?
[8] Nissan submits that the RSLA and the CPA provide an orderly system for the resolution of disputes relating to the repair of motor vehicles. It submits that the RSLA protects the rights of repairers who want to get paid for their labour and that this statute, along with the CPA, extends protection to consumers from repairers who might seek to exploit them.
[9] Nissan submits that the trial judge erred when he found that 179 complied with the provisions of the CPA. Nissan submits that, in the absence of such compliance, 179 had no right to charge for repairs and that it has no right to payment from Nissan based upon unjust enrichment or to a lien.
[10] 179 submits that it complied with the CPA except, perhaps, for minor deficiencies.179 submits that it provided meaningful disclosure to its customer, and that it obtained his informed consent for the work to be performed. 179 submits that, in any event, Nissan did not defend the action at trial on the basis that there was a failure to comply with the CPA, and that it is not entitled to raise this defence for the first time on appeal.
[11] In support of its submissions, Nissan relies upon Trento Motors v. McKinney, 1992 CarswellOnt 27. In Trento, the trial judge had dismissed a $900 claim by a repairer of a motor vehicle because the repairer had failed to comply with provisions of the Motor Vehicle Repair Act that was then in force and required written authorization for a repair recording certain information. The unsuccessful repairer appealed, and on appeal relied upon principles of unjust enrichment and other equitable grounds for setting aside the trial judgment. Carruthers J. at paras. 16-18 referred to authorities in which courts had held that the effect of non-compliance with the statute renders the agreement to pay for the repairs unenforceable, and that in such circumstances there could be no claim based upon unjust enrichment. Carruthers J. accepted these authorities but concluded, nevertheless, that there was no dispute about the authorization for the work, the nature of the repairs or their cost in relation to the estimate. Carruthers J. held that the fact that the required information was recorded on the mechanic’s copy of the invoice was sufficient for compliance with the statute. He allowed the appeal and granted judgment to the appellant repairer.
[12] Nissan also relies upon Gary Auto Repair v. Velke, 2010 CarswellOnt 3758 and 407 Auto Collision v. Bounsanya, 2010 CarswellOnt 9598 in support of its submission that a repairer who is not in compliance with statutory requirements is not entitled to seek a remedy based upon unjust enrichment. These authorities are to the same effect as Trento.
[13] None of these three authorities addresses whether a repairer who asserts a lien and loses that lien, or the charge on money paid into court that replaced the lien, because of expiry of a statutory limitation period under the RSLA is entitled to sue for unjust enrichment.
[14] I have reviewed the pleadings that were before the trial judge and it is clear from my review of Nissan’s Amended Defence that Nissan did not plead as a defence that 179 had failed to comply with the CPA. The sole defence that was pleaded at trial was that 179’s “statutory lien” on the money that was paid into court is discharged and that 179 has no cause of action. I have also reviewed the written submissions made on behalf of Nissan at trial. Nissan framed the issue to be decided as a narrow one: “can a lien claimant maintain a claim for unjust enrichment when it has no claim under the Repair and Storage Lien Act?” Nissan did not submit that 179 had failed to comply with the CPA. Nissan relied solely on the fact that 179 missed the limitation period under the RSLA to preserve its charge upon the money that Nissan had paid into court as the juristic reason to deny 179 a remedy for unjust enrichment.
[15] In relation to Trento and Gary Auto Repair, Nissan submitted at trial that these authorities stand for the proposition that when a lien claim is lost, a lien claimant has no cause of action. Nissan did not submit that 179 lost its lien because it failed to comply with the CPA.
[16] I conclude that it is not open to Nissan to raise a defence on appeal based upon alleged non-compliance with the CPA, when this defence was not raised at trial.
[17] Because of this conclusion, it is not necessary for me to decide whether the trial judge erred in finding that 179 complied with the provisions of the CPA. This was not in dispute at trial.
Did the trial judge err in deciding that 179 was entitled to sue Nissan for unjust enrichment in circumstances where it had asserted a lien under the RSLA and lost this lien (and the replacement charge on money paid into court) because of the operation of the RSLA?
[18] In order to successfully make a claim for unjust enrichment, a party must show (a) an enrichment; (b) a corresponding deprivation; and (c) absence of any juristic reason for the enrichment: Pettkus v. Becker, 1980 22 (SCC), [1980] 2 S.C.R. 834.
[19] Nissan submits that the trial judge erred in granting judgment in favour of 179 based upon a cause of action for unjust enrichment. Nissan submits that court should not create or allow a common law remedy to assist repairers in instances where a repairer has failed to comply with the RSLA. Nissan submits that if a common law remedy in unjust enrichment is allowed where there was a failure to comply with the RSLA, this would render the RSLA unnecessary.
[20] Nissan submits that 179’s loss of the statutory charge upon the money paid into court by Nissan because of its failure to comply with the RSLA by commencing an action within the prescribed period of time is a juristic reason for Nissan’s enrichment and, therefore, 179 has failed to show that it satisfies the third requirement for a claim for unjust enrichment. Nissan relies on Trento, Gary Auto Repair, and 407 Auto Collision to support this submission. As I have noted, those cases involved a failure by the repairer to comply with statutory requirements under the Motor Vehicle Repair Act or successor provisions in the CPA. None of these cases involved the question that arises in this case, that is, whether, in relation to a repairer’s claim for unjust enrichment, a failure by the repairer to assert a lien under the RSLA, or to comply with statutory requirements to preserve a charge upon money paid into court to discharge a lien, is a juristic reason for enrichment that makes a claim for unjust enrichment unavailable.
[21] Nissan also relies on cases decided under the Construction Lien Act, RSO 1990, c C.30 (“CLA”) which, Nissan submits, is the “real estate equivalent” to the RSLA. Nissan submits that under the CLA, a restitutionary claim in quantum meruit is not available against an owner where a lien claim has expired. The principle upon which Nissan relies was expressed by Master Wiebe in MGL Construction Inc. v. Boutet, 2015 ONSC 4477:
Second, and related to one above, there is consistent authority for the proposition that claims in restitutionary quantum meruit by subcontractors against owners should not be allowed because to do so would circumvent and undermine the scheme established by the construction lien legislation. The existence of the CLA is in effect the juristic reason for any unjust enrichment by the owner that a subcontractor may otherwise be able to establish. The CLA provides subcontractors with specific in personam remedies against owners which turn on the concepts of lien and holdback. To give subcontractors the added non-statutory remedy of restitutionary quantum meruit when the statutory remedies fail would undermine the statute.
[22] 179 submits that there is no obligation on the part of a repairer to assert a lien under the RSLA in order to enforce payment of charges for repairs. It submits that a lien under the RSLA is an added right conferred by statute to a repairer, which applies in addition to other legal rights which are available to a repairer at law. 179 submits that a failure to assert a lien under the RSLA, or the loss of a lien (or a charge upon money paid into court) under that statute, does not extinguish any legal rights which are otherwise available to a repairer.
[23] In support of this submission, 179 relies upon Giorganni (c.o.b. Call Service) v. Schaer, [2007] O.J. No. 612. In Giorganni, the Court of Appeal decided an appeal that was concerned with the adequacy of a notice claiming a storer’s lien under the RSLA. The Court of Appeal held that the notice was invalid because it failed to comply with statutory requirements and, as a result, the amount of the lien was far less than the amount of the judgment.
[24] In his decision for the court in Giorganni, O’Connor J.A. addressed the purpose of the RSLA and wrote at para. 28:
The Act, as its title suggests, is directed at creating liens and providing for remedies for the enforcement of liens. It is not concerned with other claims, in law or in equity, that may arise between an owner, on the one hand, and a storer or repairer, on the other. The respondent’s application linked his request for judgment directly to the amount of his lien. He did not seek judgment for amounts owing on the basis of a claim for unjust enrichment or in any other basis unrelated to his claim for a storer’s lien.
The passage that I have quoted makes it clear that the Court of Appeal did not consider the RSLA to be a complete code of remedies available to an unpaid storer or repairer, and that other claims in law or equity are not affected by the failure of a storer or repairer to use the lien rights under the RSLA as a remedy. The Court of Appeal set aside the judgment in its entirety because it found that the claimant did not have a valid storage lien, and the claimant did not seek judgment on any other basis.
[25] 179 also relies upon 1446968 Ontario Inc. v. Capmor Financial Services Corp., [2009] O.J. No. 5254. In Capmor, the plaintiff sought to recover rent and other expenses from the defendant who, it alleged, had agreed to store certain equipment. The plaintiff claimed damages for breach of contract or, in the alternative, in quantum meruit. The trial judge held that the prerequisites to recovery for unjust enrichment were all met, and granted judgment for restitutionary relief based upon the fair value of the cost of storage of the equipment.
[26] Nissan submits that the trial judge in Capmor relied upon s. 4 of the RSLA in granting relief to the plaintiff, and that the trial judge did not need to go outside of the statute to grant relief to the plaintiff. Nissan submits that, therefore, Capmor does not stand for the proposition that where a plaintiff cannot rely upon the RSLA, the plaintiff can instead rely on unjust enrichment. I disagree with Nissan’s submission. In Capmor, the trial judge held that the plaintiff was entitled to a storer’s lien as provided for in s. 4 of the RSLA. However, the plaintiff in Capmor did not make such a claim in its statement of claim, and the trial judge did not grant a remedy to the plaintiff based upon a lien under the RSLA. The trial judge granted the plaintiff a remedy for unjust enrichment even though there was no claim for a lien under the RSLA: Capmor, at paras. 37-42.
[27] Nissan submits that each of Giorganni and Capmor was a case that involved a claim by a storer, and that in each case the storer was in a direct relationship with the party against whom the claim was made. Nissan submits that the provisions in the RSLA that apply to a storer differ from those that apply to a repairer, such as 179, and that these cases are not authorities that support the existence of a claim by a repairer for unjust enrichment where the claimant is not in a direct relationship with the party against whom the claim is made. Nissan submits that the principles in the cases decided under the CLA should apply to a claim in unjust enrichment by a repairer from a party against whom it does not have a direct claim, and that such a claim is not permitted because the existence of the rights provided for by the RSLA is a juristic reason for any enrichment.
[28] Section 3 of the RSLA provides for a repairer’s lien, and s. 4 of the RSLA provides for a storer’s lien. Section 3(1) provides that a repairer has a lien against an article that the repairer has repaired, and s. 4(1) provides that the storer has a lien against an article that the storer has stored (or stored and repaired). The repairer or storer may retain possession of the article until the amount described in subsections 3(1) and 4(1), respectively, is paid. Section 3(2) provides that a repairer’s lien against an article arises and takes effect when the repair is commenced, and s. 4(2) provides that a storer has a lien against an article that a storer has stored (or stored and repaired). I do not agree that the provisions of the RSLA insofar as they address storers and repairers, respectively, are materially different in any way that is relevant to this appeal.
[29] I do not agree with Nissan’s submission that the fact that the claim for unjust enrichment in Giorganni and in Capmor was made by a storer against a party with whom the claimant had a direct relationship distinguishes these cases from the one before me. Each case involved a claim for unjust enrichment, and the Court of Appeal in Giorganni was clear that the RSLA is not concerned with claims in law or in equity that may arise between an owner, on the one hand, and a repairer or storer, on the other hand.
[30] I disagree with Nissan’s submission that the RSLA should be regarded as equivalent to the CLA, and that a claim for unjust enrichment is not available where the lien rights provided for by the RSLA were not invoked or were lost because of non-compliance with a statutory requirement for preservation of a charge upon the amount paid into court. In my view, an “article” that has been repaired or stored is different than a building on which an alteration, addition or repair has been made (against which the lien rights under the CLA may be asserted) because upon release of the article that has been repaired or stored before payment of the repair or storage charges, a repairer or storer would no longer be able to assert a possessory lien. The RSLA does not provide that it is a complete code for remedies available to an unpaid repairer or storer. Absent such a provision, I do not agree that the RSLA should be construed to limit the remedies available to a repairer or storer to those provided for in the RSLA. I agree with the trial judge that Giorganni and Capmor are authorities that are contrary to this proposition.
[31] I conclude that the RSLA does not codify the remedies available to a storer or repairer, and that the lien rights conferred by this statute are in addition to other claims in law or in equity that may arise between an owner, on the one hand, and a repairer or storer, on the other hand.
[32] I conclude that the trial judge did not err when he decided that 179 did not lose the right to seek a remedy for unjust enrichment because it lost its charge under the RSLA (upon the funds that Nissan had paid into court) for non-compliance with the statutory requirement in s. 24(14) of the RSLA for preservation of such a charge because it failed to commence an action against Nissan to recover the amount claimed within 90 days after the vehicle was returned to Nissan.
Disposition
[33] For these reasons, Nissan’s appeal is dismissed.
[34] 179 provided a costs outline in respect of the costs of this appeal, and it seeks costs in the amount of $5,636.55. I regard the amount claimed to be reasonable and proportionate, and I award costs of this appeal to 179 fixed in the amount of $5,636.55, inclusive of fees, disbursements and HST.
__________________________ Cavanagh J.
Date of Release: April 17, 2018
CITATION: 1794279 Ontario Limited v. Nissan Canada Finance, 2018 ONSC 2452
DIVISIONAL COURT FILE NO.: 213/17
DATE: 20180417
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
1794279 ONTARIO LIMITED Plaintiff/Respondent
– and –
NISSAN CANADA FINANCE Defendant/Appellant
REASONS FOR JUDGMENT
Cavanagh J.
Date of Release: April 17, 2018