Services Canada Corp., 2020 ONSC 3223
COURT FILE NO.: DC 18/971 (Kitchener)
DATE: 20200528
ONTARIO
SUPERIOR COURT OF JUSTICE
divisional court
BETWEEN:
mr. towing inc.
Plaintiff (Appellant)
– and –
mercedes-benz financial services canada Corporation
Defendant (Respondent)
Brian R. Kelly, for the Appellant
Ron Aisenberg, for the Respondent
HEARD: May 14, 2020, by videoconference
R. A. LOcoco J.
I. Introduction
[1] The Plaintiff Mr. Towing Inc. appeals from the judgment of Deputy Judge J. Sebastian Winny of the Superior Court of Justice (Small Claims Court) in Kitchener, as set out in Reasons for Judgment dated September 4, 2018 (reported at 2018 82784).
[2] Mr. Towing’s action arose from a single-vehicle accident involving a leased motor vehicle owned by the Defendant Mercedes-Benz Financial Services Canada Corporation (MBFS). Mr. Towing towed the damaged vehicle from the accident scene at the request of the police and placed it in storage. Mr. Towing received payment for over five months of storage charges from the lessee’s insurer.
[3] In its action against MBFS, Mr. Towing claimed additional storage charges for a further period of over one year and four months. The trial judge dismissed Mr. Towing’s action, finding that Mr. Towing’s lien for storage charges was limited to unpaid amounts for the initial 60-day period of storage.
[4] Mr. Towing appeals the trial judge’s decision. Among other things, Mr. Towing says that the trial judge erred in deciding that (i) Mr. Towing was required by s. 4(4) of the Repair and Storage Liens Act, R.S.O. 1990, c. R.25 (“RSLA”) to provide written notice of its lien to MBFS within 60 days of receiving the vehicle, and (ii) Mr. Towing’s lien for storage charges is limited by s. 4(6) to the unpaid amount for the initial 60-day period.[^1]
[5] I disagree. For the reasons below, I am dismissing Mr. Towing’s appeal.
II. Factual Background
[6] On September 22, 2014, a 2014 Mercedes-Benz motor vehicle collided with a highway median wall in Kitchener in a single-car accident. The vehicle was badly damaged. The driver, a student from overseas, was airlifted to hospital. Police called Mr. Towing to tow away the damaged vehicle. Igor Kilibarda (the principal of Mr. Towing), along with another employee, attended at the accident scene and towed the vehicle to Mr. Towing’s storage lot.
[7] Approximately one month later, the vehicle’s driver contacted Mr. Kilibarda and attended at the storage lot to retrieve personal effects from the vehicle and take pictures of it. He told that Mr. Kilibarda that (i) his insurer had denied coverage, (ii) he intended to sue the insurer, and (iii) he wanted to leave the vehicle in storage in the meantime. Mr. Kilibarda asked the driver to contact him monthly to update him on the situation. The driver did so for a time.
[8] In late February 2015 (five months after the accident), the driver advised Mr. Kilibarda that he decided to leave the vehicle at the storage lot. Early the following month, the driver’s insurer paid $9,706.70 to Mr. Towing to satisfy all towing and storage charges from September 22, 2014 to March 2, 2015. The insurer’s representative told Mr. Kilibarda that the insurer was paying that amount by reason of its mistake in failing to notify the driver that he was responsible for the towing and storage charges.
[9] Mr. Kilibarda subsequently lost contact with the driver. Mr. Kilibarda tried to reach the driver at the address he had provided, learning that it was student housing and that the driver no longer resided there. In May 2016 (one year, eight months after the accident), Mr. Kilibarda obtained a Used Vehicle Information Package, which identified MBFS as the vehicle’s owner and the holder of a registered security interest. The driver was identified as MBFS’s debtor. Mr. Kilibarda testified that he contacted MBFS at that time, but MBFS has no record of such contact.
[10] In early 2016, MBFS began making inquiries after the driver stopped making pre-authorized payments for the vehicle. In June 2016, MBFS learned that (i) the insurer cancelled the driver’s insurance policy in August 2015, (ii) the driver was involved in an accident, airlifted to the hospital, and released the following day, (iii) the driver did not report the accident to his insurer, (iv) the driver was charged with one or more driving offences, (iv) an arrest warrant was issued when the driver failed to attend court, and (v) the driver had left the country.
[11] MBFS also learned that the damaged vehicle was in storage with Mr. Towing, who had received payment from the driver’s insurer for towing and storage fees up to March 2, 2015. Mr. Towing was claiming additional storage fees of $60 per day to obtain release of the vehicle. MBFS disputed Mr. Towing entitlement to additional storage fees, relying on ss. 4(4) and 4(6) of the RSPA to support its position that Mr. Towing’s lien against the vehicle for storage charges was limited to the initial 60 days of storage.
[12] In order to obtain possession of the vehicle, MBFS made an application under the RSLA to the Superior Court of Justice in Brampton and paid the disputed amount of $32,137.20 into court. On July 21, 2016, MBFS retrieved the vehicle from Mr. Towing. MBFS subsequently sold the vehicle for $11,000. In October 2016, Mr. Towing brought its action for the additional storage fees in Small Claims Court in Kitchener.
III. Trial judge’s decision
[13] In his decision, the trial judge reached the following conclusions:
a. When Mr. Towing took possession of the damaged vehicle from police, he had the knowledge to trigger the requirement under s. 4(4) of the RSLA to provide written notice to MBFS (the registered owner and the holder of a registered security interest in the vehicle) of its lien for storage charges within 60 days of receiving the vehicle: trial decision, at para. 25.
b. Because Mr. Towing failed to provide MBFS with the required notice, s. 4(6) of the RSLA limited Mr. Towing’s lien against MBFS for storage charges to the first 60 days of storage: trial decision, at para. 26. To preserve its lien rights without limitation, Mr. Towing was effectively required to conduct a search to determine the parties entitled to notice: trial decision, at para. 27.
c. To allow Mr. Towing to continue to accumulate fees beyond the initial 60-day period would be contrary to the policy considerations underlying the RSLA and the modern rule of statutory interpretation: trial decision, at para. 27.
d. Since the vehicle was “a wreck and an obvious write-off … it must have been perfectly obvious to the storer … that storage would be of limited value and only useful for any brief time required for insurance, police or other investigations to be completed. There is no suggestion that the driver … ever intended to recover possession of the vehicle after September 22, 2014”: trial decision, at para. 29.
e. The trial judge rejected Mr. Towing’s submission that the driver had implicit authority to contract with Mr. Towing for storage of the vehicle. It would make no commercial sense for the owner to implicitly authorize the driver to contract for the storage of a wrecked vehicle. “[A]s between the driver and the owner, it appears that the driver stood in the same position as if he had stolen the vehicle. The owner of a stolen vehicle could not be possibly be liable to the thief’s decision to leave the wrecked vehicle in storage”: trial decision, at para. 32.
f. The trial judge rejected Mr. Towing’s submission that the driver contracted for storage on his own behalf: trial decision, at paras. 33-37. The driver was in the hospital when Mr. Towing took possession of the damaged vehicle at the request of police. The driver’s first communication with Mr. Towing was about a month later. There was no evidence that Mr. Towing and the driver formed a storage contract at that time or subsequently: trial decision, at paras. 34 and 37. Mr. Towing failed to establish the authenticity of a document that Mr. Towing relied on to support a storage contract with the driver: trial decision, at paras. 35-36.
g. In the absence of evidence of a storage contract with the driver, Mr. Towing was not a “storer” within the meaning of the RSLA: trial decision, at para. 37. On receiving the vehicle at the instance of the police, all Mr. Towing had was “the possibility that a party might pay for towing and storage within a presumptively brief time after the accident.” Such a possibility did not constitute an “understanding that the person will be paid for the storage” as set out in the definition of “storer” in s. 1(1): trial decision, at para. 39.
IV. Grounds of appeal/matters in issue
[14] Mr. Towing appeals the trial judge’s judgment pursuant to s. 31 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Mr. Towing says that the trial judge erred in the following respects:
a. The trial judge erred in finding that s. 4(4) of the RSLA required Mr. Towing to provide written notice of its lien to MBFS within 60 days of receiving the vehicle. Therefore, s. 4(6) did not limited Mr. Towing’s lien for storage charges as against MBFS to 60 days from receiving the vehicle.
b. The trial judge erred in making various findings of fact (or findings on questions of mixed fact and law), including the following:
i. The damaged vehicle had an unspecified “limited value” and that storage would only be useful for any brief time required for insurance, police or other investigation to be completed.
ii. The driver “stood in the same position as if he had stolen the vehicle”.
iii. There was no agreement of storage for the vehicle.
c. The trial judge erred in finding that Mr. Towing was not a “storer” as defined in the RSLA.
[15] MBFS says that the trial judge did not err in deciding that Mr. Towing was required by s. 4(4) of the RSLA to provide written notice of its lien to MBFS. Therefore, as the trial judge found, Mr. Towing’s lien for storage charges as against MBFS was limited to 60 days. MBFS also says that the trial judge did not err in the other challenged findings that were necessary for the trial judge to make in order to reach his conclusions regarding ss. 4(4) and 4(6) of the RSLA.
[16] In the alternative, if the court finds that Mr. Towing’s lien is not limited to 60 days of storage fees, MBFS says that s. 4(1) of the RSLA would limit Mr. Towing’s entitlement to the “fair value” of the storage charges (being $11,000, based the amount MBFS received on sale of the damaged vehicle) less the amount Mr Towing has already received from the driver’s insurer ($9,706.70). Therefore, Mr. Towing would be entitled to $1,293.30.
[17] The issues to be determined are as follows:
a. Notice of lien – Did the trial judge err in finding that Mr. Towing was required to provide written notice of its lien to MBFS within 60 days of receiving the vehicle, thereby limiting the lien to the amount of unpaid storage charges for the initial 60-day period?
b. Other challenged findings – Did the trial judge err in making various findings of fact (or findings on questions of mixed fact and law) to support his conclusions?
c. Was Mr. Towing a “storer”? – Did the trial judge err in finding that Mr. Towing was not a “storer” as defined in the RSLA?
d. Alternative submission – fair value – If Mr. Towing’s lien against MBFS is not limited to unpaid storage charges for 60 days, should the amount covered by the lien be reduced by reference to the “fair value” of the storage charges?
[18] In the balance of these reasons, I will first set out certain legal principles that apply in this appeal. I will then address in turn each of the issues set out above.
V. Legal Principles
[19] This is no dispute that Housen v Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, sets out the standard of review that applies on this appeal. The standard of review is “correctness” on questions of law: Housen, at para. 8. The standard of review is “palpable and overriding error” for findings of fact and inferences of fact, as well as for questions of mixed fact and law (absent a readily extricable error in principle, where the standard of review is correctness): Housen, at paras. 10, 25, 36 and 37. A palpable error is one that is plainly seen or obvious: Housen, at paras. 5-6. An overriding error is an error that is sufficiently significant to vitiate the challenged finding, such as the absence of any evidence to support the finding: see Furr v. Courtland Mews Cooperative Housing Inc., 2020 ONSC 1175 (Div. Ct.), at para. 12.
[20] It is also beyond dispute that Canadian courts have adopted the “modern approach” to statutory interpretation set out in Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R.559, at para. 26, quoting the definitive formulation in Elmer Driedger’s Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87, as follows:
Today there is only one principle or approach [to statutory interpretation], namely, 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.
[21] As well, there is no dispute that the police had the authority to cause Mr. Towing to move the damaged vehicle from the accident scene and place it in storage: Highway Traffic Act, R.S.O. 1990, c. H.8 (“HTA”), s. 170(15). Under that provision, Mr. Towing obtained a lien against the vehicle for towing and storage charges, if any. In the words of s. 170(15), that lien “may be enforced in the manner provided by the [RSLA].”
[22] Under s. 4(1) of the RSLA, a “storer” has a lien against an article it has stored for an amount equal to (a) the amount agreed upon for storage, or (b) where there was no agreed amount, the fair value of the storage, taking into account a non-exhaustive list of considerations set out in that provision. Under s. 1(1), “storer” is defined as “a person who receives an article for storage … on the understanding that the person will be paid for the storage”.
[23] Section 4(4) of the RSLA imposes certain notice requirements on a storer who has possession of an article that is subject to a lien. If the storer “knows or has reason to believe” that possession of the article was received from a person other than “its owner” or “a person having its owner’s authority” and the stored article is a vehicle registered under the HTA, the storer, within 60 days,[^2] is required to give written notice of the lien to (among others) (i) the registered owner of the vehicle, and (ii) any person with a security interest perfected by registration under the Personal Property Security Act, R.S.O. 1990, s. P-10.
[24] Where the storer fails to give the notice to a person when required by s. 4(4), the storer’s lien as against that person is limited to the unpaid amount owing for the period of 60 days from the date when the vehicle was received: RSLA, s. 4(6). That provision also requires the storer to surrender possession of the vehicle to that person upon proof of a right to possession and payment of that amount.
[25] Upon the expiration of the 60 days after the day that storage charges become due, the storer has the right to sell the stored vehicle in accordance with Part III of the RSLA: see RSLA, s. 4(7). Before doing so, prior written notice to sell the vehicle must be given to (among others) the registered owner and the holder of a registered security interest in the vehicle: RSLA, s. 15.
VI. Notice of Lien
[26] Did the trial judge err in finding that Mr. Towing was required to provide written notice of its lien to MBFS within 60 days of receiving the vehicle, thereby limiting the lien to the amount of unpaid storage charges for the 60-day period?
[27] For the reasons below, I have concluded that the trial judge was correct in deciding that (i) Mr. Towing was required to provide written notice of its lien to MBFS within 60 days of receiving the vehicle, and (ii) the lien is limited to the amount of unpaid storage charges for the 60-day period. I have also concluded that the trial judge made no palpable and overriding errors in his findings of fact (or his findings on questions of mixed fact and law) that were necessary for the trial judge to make in order to reach his decision.
[28] There is no dispute between the parties about the following facts:
a. After Mr. Towing removed the vehicle from the accident scene after being called by police, the vehicle was subject to a lien for storage charges in Mr. Towing’s favour under s. 170(15) of the HTA.
b. MBFS was the registered owner and had a registered security interest in the vehicle.
c. Mr. Towing did not provide MBFS with written notice within 60 days of receiving the vehicle.
[29] Given the foregoing facts, in the circumstances of this case, the trial judge was correct in deciding that Mr. Towing has no claim against MBFS for storage charges beyond the first 60 days after receiving the damaged vehicle on September 22, 2014. In March 2015, Mr. Towing received payment from the driver’s insurer covering storage charges for longer than that period (over 160 days). By reason of ss. 4(4) and 4(6) of the RSLA, Mr. Towing was entitled to nothing more from MBFS.
[30] There is no dispute that police called Mr. Towing to the accident scene. The driver had been airlifted to the hospital. In these circumstances, the trial judge was justified in finding that Mr. Towing did not receive possession of the vehicle from a person that Mr. Towing knew or had reason to believe was “its owner” or “a person having its owner’s authority,” within the meaning of ss. 4(4). To support that conclusion, the trial judge (at para. 25 of the trial decision) cited the Divisional Court decision in 858579 Ontario Inc v QAP Parking Enforcement Ltd (1995), 1995 10673 (ON SC), 22 O.R. (3d) 346 (Div. Ct.). That decision includes obiter comments by Moldaver J. that may be taken as suggesting that the notice requirements in s. 4(4) come into play whenever “a storer receives a vehicle which has been removed at the behest of a police officer in accordance with s. 170(15) of the [HTA]”: QAP, at p. 18. However, for the purpose of this appeal, it is unnecessary to decide whether the requirement extends that far. In the circumstances of this case, the trial judge made no palpable and overriding error in deciding the Mr. Towing did not receive the vehicle from a person that Mr. Towing knew or had reason to believe was the owner or a person having the owner’s authority. Therefore, he did not err in concluding that notice to MBFS was required in this case.
[31] Assuming the trial judge was correct in concluding that Mr. Towing received the vehicle from someone it knew or had reason to believe was the owner or a person having the owner’s authority, Mr. Towing argued that the trial judge nonetheless erred in finding that Mr. Towing had no claim against MBFS for storage charges beyond the first 60 days of storage by reason of ss. 4(4) and 4(6) of the RSLA. In support of that position, Mr. Towing argued the following:
a. Section 170(15) the HTA provides that the lien created by s. 170(15) may be enforced in the manner provided by the RSLA. Section 170(15) does not require enforcement under the RSLA. If s. 170(15) provided that the lien shall be enforced under the RSLA, Mr. Towing’s counsel suggested (in his oral submissions) that he would have no argument that the trial judge was correct in his conclusions about the application of ss. 4(4) and 4(6) in this case.
b. Mr. Towing’s counsel argued that the driver’s contacting of Mr. Towing within the 60-day notice period was an “intervening event”, the result of which was that Mr. Towing was not required to provide notice under s. 4(4) for the RSLA. After being contacted by the driver, Mr. Towing assumed that the driver was the owner of the vehicle. The driver’s personal effects were in the vehicle. He had insurance on the vehicle, although the insurer had denied coverage. He intended to sue the insurer, leaving the vehicle in storage in the meantime. Mr. Towing had no reason to think that the driver was not the owner or someone with the owner’s authority. Therefore, he was not required to given notice to the owner (or holder of a registered security interest) under s. 4(4).
[32] I find no merit to either of these arguments.
[33] Section 170(15) of the HTA creates a statutory lien in favour of the person storing a motor vehicle in the circumstances set out in s. 170(15). That provision also provides the means of enforcing the lien, that is, by that the statutory procedures set out in RSLA. As noted by the Ontario Court of Appeal in 2237446 Ontario Inc (409 Collision Centre) v. Intact Insurance, 2018 ONCA 394, 422 D.L.R. (4th) 78, at para. 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.” Given the intent of the existing statutory scheme under the RSLA, I am not persuaded that the Legislature intended some other method of enforcing a statutory lien created under s. 170(15) beyond that provided under the RSLA.
[34] That being said, it would remain open to the person storing a towed motor vehicle to enforce its claim for storage charges on some legal basis independent of its lien under s. 170(15). In his reasons, the trial judge addressed other bases that Mr. Towing put forward at trial for enforcing its claim for storage charges, that is, a storage contract between Mr. Towing and either the driver (acting on his own behalf) or MBFS (through the driver, contracting with the MBFS’s implicit authority). As noted further below under “Other challenged findings”, I find no palpable or overriding error in the trial judge’s findings of fact (or findings on questions of mixed fact and law) that provided the basis for his conclusion that there was no storage contract with either the driver or MBFS. In any case, I do not see how it would assist Mr. Towing’s claim against MBFS if there was a storage contract between Mr. Towing and the driver, acting on his own behalf.
[35] I was equally unconvinced by the argument that given Mr. Towing’s interactions with the driver within the initial 60-day period of storage, Mr. Towing was not required to provide written notice to MBFS under s. 4(4) of the RSLA. As MBFS’s counsel noted in his submissions, there is nothing in s. 4(4) to suggest that contact within the notice period from someone Mr. Towing thought was the owner relieved Mr. Towing of its notice obligations under that provision. As the trial judge recognized in this decision, Mr. Towing had the ready means of determining MBFS’s status as owner and the holder of a registered security interest in the vehicle by obtaining a Used Vehicle Information Package through Service Ontario, as it did some time later beyond the 60-day period. I agree with the trial judge that it would be contrary to the policy considerations underlying the RSLA and the modern rule of statutory interpretation for Mr. Towing’s lien for storage charges against MBFS to extend beyond the initial 60-day period: trial decision, at para. 27, citing 409 Collision Centre, at para. 9, and Bell ExpressVu, at para. 26.
[36] Accordingly, the trial judge was correct in deciding that (i) Mr. Towing was required to provide written notice of its lien to MBFS within 60 days of receiving the vehicle, and (ii) the lien is limited to the amount of unpaid storage charges for the 60-day period.
VII. Other challenged findings
[37] Did the trial judge err in making findings of fact (or findings on questions of mixed fact and law) to support his conclusions?
[38] As previously noted, Mr. Towing argued that in the course of his reasons, the trial judge made reversible errors in making findings of fact (or findings on questions of mixed fact and law) to support the conclusions he reached. For the reasons below, I have concluded that the trial judge made no palpable and overriding errors in the findings that were necessary for the trial judge to make in order to reach his decision.
[39] Among other things, Mr. Towing challenges the trial judge’s conclusion that the driver did not have MBFS’s implicit authority to contract with Mr. Towing for storage of the vehicle, with the result that there was no storage contract between Mr. Towing and MBFS. In reaching that conclusion, the trial judge notes that the absence of evidence that Mr. Kilibarda “subjectively perceived that the driver was acting as agent for another” – he thought the driver was the owner. The trial judge also states that “it would make no commercial sense for the owner to have implicitly authorized the driver to enter into a storage contract in these circumstances, … without even notifying the owner of what had happened.” On the evidence, I see no obvious error in the trial judge’s reasoning that would call into question his conclusion that driver did not have MBFS’s implicit authority to contract for storage of the damaged vehicle.
[40] In the trial decision, at para. 32, the trial judge then goes on to state as follows:
On these facts, as between the driver and the owner, it appears that the driver stood in the same position as if he had stolen the vehicle. The owner of a stolen vehicle could not be possibly be liable to the thief’s decision to leave the wrecked vehicle in storage.
[41] Mr. Towing challenges the trial judge’s comparing the driver’s position to that of a thief (given the driver’s rights as lessee of the vehicle), as well as the description of the vehicle as a “wrecked vehicle” (noting the lack of evidence as the extent of the damage). However, I do not consider those statements to be necessary for the trial judge’s conclusion as to lack of contractual nexus between Mr. Towing and MBFS. In my view, the trial judge’s conclusion on the contractual issue was amply justified in the absence of the trial judge’s additional statements.
[42] I also agree with MBFS’s counsel that the comparison of the driver to a thief may be better described as an analogy (or perhaps a rhetorical flourish), not meant to be taken literally. The driver obviously did not steal the vehicle. The trial judge was not suggesting otherwise. As well, I have difficulty seeing how Mr. Towing can take exception to the trial judge’s description of the vehicle as a “wrecked vehicle” (in para. 32) or “a wreck and obvious write-off” with “limited value” (in para. 29), given Mr. Kilibarda’s testimony that the vehicle had been “demolished” in the accident: trial decision, at para. 6.
[43] Mr. Towing also challenges the trial judge’s rejection of Mr. Towing submission that the driver contracted for the storage charges on his own behalf. Mr. Towing takes particular exception to the trial judge’s statement that there was “no suggestion” of a storage contract with the driver when the driver first contacted Mr. Towing (at para. 34) and “no evidence” of a storage contract with the driver at any time (at para. 37). Mr. Towing disputes that there was an entire lack of evidence of a storage contract with the driver. Among other things, Mr. Towing notes that the driver, as lessee of the vehicle (who continued to make lease payments until January 2016), had the authority to contract for storage on his own behalf.
[44] Once again, I see no palpable and overriding error in the trial judge’s analysis with respect to his conclusion that there was no storage contract between Mr. Towing and the driver. As previously noted, the driver was in the hospital when Mr. Towing took possession of the damaged vehicle at the request of police. The driver’s first communication with Mr. Towing was about a month later. The trial judge, for cogent reasons set out in the trial decision (at paras. 35-36), rejected entirely a document that Mr. Towing relied on to support its claim of a storage contract with the driver. In all the circumstances, there was no reversible error. In any case, as previously noted, I do not see how it would assist Mr. Towing’s claim against MBFS if there was a storage contract between Mr. Towing and the driver, acting on his own behalf.
VIII. Was Mr. Towing a “storer”?
[45] Did the trial judge err in finding that Mr. Towing was not a “storer” as defined in the RSLA?
[46] As noted above, the trial judge addressed Mr. Towing’s argument that there was a storage contract between Mr. Towing and the driver, acting on his own behalf. The trial judge concluded that there was no evidence of a storage contract between them: trial decision, at paras. 33-37. I have already found that the trial judge made no reversible error in reaching that conclusion. The trial judge then went on to find (at para. 37) that in the absence of a contract with the driver, Mr. Towing was not a “storer” within the meaning of the RSLA.
[47] To reach that conclusion, the trial judge found that on receiving the vehicle from police, all Mr. Towing had was “the possibility that a party might pay for towing and storage within a presumptively brief time after the accident.” The trial judge expressed the view that such a possibility did not constitute an “understanding that the person will be paid for the storage” as set out in the definition of “storer” in s. 1(1): trial decision, at para. 39.
[48] As a separate ground of appeal (as stated in the Notice of Appeal), Mr. Towing says that the trial judge erred in fact and law in finding that Mr. Towing was not a storer as defined in the RSLA. With good reason, however, the trial judge’s finding on that issue was not a focus of attention in Mr. Towing’s appeal factum or counsel’s oral submissions.
[49] There is no dispute between the parties that Mr. Towing had a lien against the vehicle for towing and storage charges under s. 170(15) of the HTA, which lien “may be enforced in the manner provided by the [RSLA].” On appeal, as previously noted, Mr. Towing’s counsel relied on use if the word “may” to support the position that Mr. Towing was not required to give notice under s. 4(4) of the RSLA, with the result that its lien would not be limited by s. 4(6) to the unpaid amount for the first 60 days of storage. If (contrary to the trial judge’s finding) Mr. Towing was in fact a “storer” as defined, Mr. Towing would also have a lien arising under s. 4(1) of the RSLA. In those circumstances, it would not have been open to Mr. Towing to argue that enforcement of the lien under the RSLA was somehow optional (as its counsel submitted on appeal). It would be beyond dispute that the statutory enforcement procedures under the RSLA to enforce the lien would apply.
[50] In any event, for the reasons stated above previously, I rejected Mr. Towing’s submission relating to the use of the word “may” in s. 170(15) of the HTA, finding that the trial judge was correct with respect to the application of ss. 4(4) and 4(6) of the RSLA in this case. Under s. 170(15) of the HTA, Mr. Towing had the benefit of the statutory procedure for enforcement of its lien under the RSLA – it was required to follow those requirements in order to enforce the lien.
[51] Does it necessarily follow that Mr. Towing was a “storer” as defined in the RSLA (which would be the direct route to access that statute’s enforcement procedures)? Clearly, the trial judge did not believe so. He found that Mr. Towing was not a storer as defined in the RSLA. Arguably, there is no logical inconsistency in that finding. A lien arising under s. 170(15) of the HTA (by it terms) is enforceable under the RSLA, whether or not a lien also exists independently under the RSLA.
[52] Nevertheless, I do not agree with the trial judge’s conclusion that Mr. Towing was not a “storer” as defined in s. 1(1) of the RSLA. The trial judge’s analysis in support of that conclusion focused on whether Mr. Towing had a storage contract (or some commitment or expectation short of a contract) with either the driver or MBFS in order to meet the requirement in s. 1(1) that Mr. Towing was “person who receives an article for storage … on that understanding that the person will be paid for the storage”. Mr. Towing had a lien for storage charges arising under s. 170(15) of the HTA after towing the vehicle away at the request of the police. It would be reasonable to infer that persons in the towing business would be aware they had a lien for storage charges in those circumstances. The lien provided a means of satisfying all or part of storage charges for the vehicle. In my view, the existence of the lien was sufficient to bring Mr. Towing within the definition of “storer” in the RSLA. There was no requirement in the definition of storer for Mr. Towing’s “understanding” to be with either MBFS or the driver, which was the focus of the trial judge’s analysis.
[53] That being said, my difference of opinion with the trial judge on this point has no bearing on the outcome of the appeal. If Mr. Towing had a storer’s lien under the RSLA, there would be no issue about the application of ss. 4(4) and 4(6) in this case. Therefore, while I do not agree with the trial judge’s conclusion that Mr. Towing was not a storer as defined in the RSLA, I find no reversible error.
IX. Alternative submission – fair value
[54] If Mr. Towing’s lien against MBFS is not limited to unpaid storage charges for 60 days, should the amount covered by the lien be reduced by reference to the “fair value” of the storage charges?
[55] In the alternative, MBFS argued that s. 4(1) of the RSLA would limit any storage charge entitlement Mr. Towing may have to the “fair value” of the storage charges (being $11,000, based the amount MBFS received on sale of the damaged vehicle) less the amount Mr Towing has already received from the driver’s insurer ($9,706.70). Therefore, Mr. Towing would be entitled to $1,293.30.
[56] Since I have found that the trial judge did not err in deciding that Mr. Towing’s lien against MBFS is limited to unpaid storage charges for 60 days, it is unnecessary to decide this issue. I nonetheless offer the following comments.
[57] Based on the trial judge’s finding that there was no storage agreement for the vehicle, the Mr. Towing’s lien would be for the “fair value of the storage”: RSLA, s. 4(1). Section 4(1)(b) (as then in effect) sets out a non-exclusive list of considerations to take into account when determining the fair value of the storage. The value of the vehicle being stored is arguably a relevant factor.
[58] That being said, I am not satisfied that the evidence the parties led at trial was intended to address the issue of “fair value” as an alternative determination should neither party be entirely successful. Among other things, the handwritten “Agreed Statement of Facts” filed as a trial exhibit included the following paragraph: “The ‘fair value’ of storage, as that term is defined in the RSLA, was $60/day.” That statement also raises the question of whether MBFS would be precluded from taking a position on appeal inconsistent with that agreed statement. Counsel did not address that statement in the Agreed Statement of Facts in their appeal submissions (although it was included in the appeal materials).
[59] Had I found that Mr. Towing’s lien against MBFS was not limited to unpaid storage charges for the initial 60 days, I would have been inclined to invite further submissions from counsel on the following issues. (i) Should the “fair value” of the storage be sent back to the court below for determination? (ii) Is MBFS bound on appeal by the agreed fact at trial that the fair value of the storage was $60 per day?
X. Disposition
[60] For the reasons above, Mr. Towing’s appeal is dismissed.
[61] The funds that MBFS paid into court (including any interest earned) shall be released to MBFS.
[62] MBFS is entitled to its costs of this appeal, fixed at $6,000 including disbursement and tax, payable by Mr. Towing within 30 days. I am grateful to the parties and their counsel for their prior agreement on costs payable to the successful party.
The Honourable Mr. Justice R.A. Lococo
Released: May 28, 2020
Services Canada Corp., 2020 ONSC 3223
COURT FILE NO.: DC 18/971 (Kitchener)
DATE: 20200528
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
mr. towing inc.
Plaintiff (Appellant)
- and –
mercedes-benz financial services canada Corporation
Defendant (Respondent)
REASONS FOR JUDGMENT
R. A. Lococo J.
Released: May 28, 2020
[^1]: References in these reasons to the RSLA and other statutory provisions relate to the legislation in effect at the relevant time. Subsequent amendments to the RSLA, among other things, reduced the notice period that would otherwise apply under s. 4(4) from 60 days to 15 days if the stored article is a motor vehicle for which a permit has been issued under the Highway Traffic Act, R.S.O. 1990, c. H.8: see RSLA, s. 4(4.1), and O. Reg. 427/15, s. 4(3).
[^2]: See footnote 1.