Court of Appeal for Ontario

Date: 2018-04-24 Docket: C64682

Judges: Hourigan, Huscroft and Nordheimer JJ.A.

Between

2237446 Ontario Inc. o/a 409 Collision Centre (2011) Applicant (Appellant)

and

Intact Insurance and Bonnie Brennan Respondents (Respondents in appeal)

Counsel

Mark A. Klaiman, for the appellant

Lisa M. Carr, for the respondents

Heard: April 20, 2018

On appeal from: the judgment of Justice Ivan Bloom of the Superior Court of Justice, dated December 8, 2016 with reasons reported at 2016 ONSC 7711.

Reasons for Decision

[1] The applicant appeals from the dismissal of its application to have the initial certificate that was obtained by the respondent, Intact Insurance, under s. 24(5) of the Repair and Storage Liens Act, R.S.O. 1990, c. R.25 ("RSLA") declared null and void. At the conclusion of the hearing, we dismissed the appeal with reasons to follow. We now provide those reasons.

[2] On December 20, 2015, a motor vehicle owned by the respondent, Bonnie Brennan, was involved in an accident. It was towed to the storage premises operated by the appellant. On January 6, 2016, Brennan executed a Vehicle Repair and Storage Agreement in which she agreed to pay a storage rate of $85.00 per day. On the previous day, Intact had advised Brennan that it would pay the actual cash value of the vehicle, rather than pay for the cost to repair it. Brennan agreed with Intact that she would authorize the appellant to release the vehicle to Intact. Under her automobile insurance policy, Intact was obliged to reimburse Brennan for the storage costs.

[3] Intact and the appellant could not agree on the storage charges that were properly due for the storage of the vehicle. Consequently, Intact applied for and received an initial certificate under s. 24 of the RSLA. The certificate was issued on February 9, 2016. As of that date, Intact had not yet paid Brennan for the loss of her automobile.

[4] By virtue of s. 24(6) of the RSLA, once Intact gave the initial certificate to the appellant, the appellant was obliged, within three days of receiving the initial certificate, to release the article described therein to Intact unless, within that period, it filed a notice of objection with the court.

[5] Rather than filing a notice of objection, the appellant brought this application to have the initial certificate declared null and void. The appellant asserted that, since Intact had not paid Brennan for the value of the vehicle, Intact was not, at that time, either the owner of the vehicle, nor was it "any other person entitled to" the vehicle under s. 24(1) of the RSLA. Hence, according to the appellant, Intact was not entitled to obtain the initial certificate.

[6] The application judge found that Intact had "assumed liability" under the contract of insurance and was then subrogated to the rights of its insured under s. 278 of the Insurance Act, R.S.O. 1990, c. I.8. Section 278(1) reads:

An insurer who makes any payment or assumes liability therefor under a contract is subrogated to all rights of recovery of the insured against any person and may bring action in the name of the insured to enforce those rights.

[7] The application judge proceeded from this finding to conclude that Intact was a "person lawfully entitled to" the automobile and thus had the right to obtain an initial certificate under s. 24 of the RSLA.

[8] We agree with the conclusion reached by the application judge. In interpreting the provisions of the RSLA, we start with the modern approach to statutory interpretation, as espoused in E. A. Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87 that "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament": Bell ExpressVu Ltd. Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26; and Indalex Ltd., Re, 2013 SCC 6, [2013] 1 S.C.R. 271, at para. 136.

[9] It is obvious that the intent of the RSLA is to provide an expeditious procedure for dealing with disputes over storage charges, that protects both the storage holder and the owner of the item stored. The interpretation that the appellant argues for would effectively require insurers to settle all matters arising out of a motor vehicle accident with its insured, and make the resulting payment, before it would be able to avail itself of the remedies under the RSLA. In the interim, storage charges would continue to accumulate. That interpretation is not one that is harmonious with the object of the RSLA. It is also not one that reflects the realities of the marketplace, in which this statute operates. There will be many occasions where issues will arise between an insured and an insurer under an automobile insurance policy. It would not be to the benefit of either the insured or the insurer to have charges relating to the storage of motor vehicles involved in accidents mount up while those issues are resolved.

[10] The appellant's contention that statutory condition 6(7) of the standard automobile insurance policy overtakes s. 278 is untenable. The statutory condition operates as between insurer and insured. Section 278 operates as between an insurer and third parties like the appellant.

[11] We would also note that the interpretation adopted, and the conclusion reached, by the application judge does not visit any unfairness on the appellant. It is fully protected with respect to the storage charges that it claims to be lawfully entitled to while the issue over the propriety of those charges is determined.

Conclusion

[12] The appeal is dismissed. Intact is entitled to its costs of the appeal in the agreed amount of $6,779.30 inclusive of disbursements and HST.

"C.W. Hourigan J.A."

"Grant Huscroft J.A."

"I.V.B. Nordheimer J.A."