The Hertz Corporation v. McLaren Collision Centre
CITATION: The Hertz Corporation v. McLaren Collision Centre, 2016 ONSC 1327
COURT FILE NO.: CV-15-536538
DATE: 20160315
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE HERTZ CORPORATION Applicant
– and –
MCLAREN COLLISION CENTRE Respondent
Counsel: Harrison Cooper, for the Applicant Eric B. Heath, for the Respondent
HEARD: February 22, 2016
BEFORE: G. DOW, J
REASONS FOR DECISION
[1] The applicant, the Hertz Corporation ("Hertz"), a vehicle rental company, seeks an order returning a 2014 Mazda CX9 vehicle in possession of the respondent, McLaren Collision Centre ("McLaren"), a repair shop which has held the vehicle since it was towed there in a damaged condition on December 13, 2014. McLaren seeks to exercise its repairer's lien rights under applicable Ontario legislation in the amount of $14,181.50 inclusive of HST relating to repairs and $10,860 of storage fees for the period December 13, 2014 until June 11, 2015. Alternatively, McLaren seeks payment of a sum under the legal doctrine of unjust enrichment first enumerated by the Supreme Court of Canada in Pettkus v. Becker, [1980] 2 S.C.R. 834.
[2] The background facts can be summarized as follows. On November 22, 2014 a female attended at the Hertz Hurontario Street location and proceeded to rent the 2014 Mazda CX9 for one month. The rental was to cost $1,499. She provided a MasterCard. The number is recorded by Hertz in its rental records.
[3] It is not clear what identification was provided to Hertz to persuade them to rent the vehicle to a Tammy Koponyas that day.
[4] On December 13, 2014 the Mazda CX 9 arrived at McLaren's premises by way of a tow truck with significant front end damage from a collision indicated to be at Hurontario and Robert Speck Parkway. The Mazda arrived with its purported owner, Melanie Brown indicating, as deposed by an associate with counsel representing McLaren she "filled out her insurance information on the work order" but subsequently stated she would be paying for repairs herself. The details of her "insurance information" was not tendered before me. Further, it is not clear what identification, if any, she provided to McLaren to verify herself as owner of the vehicle aside from the oral representation which was accepted by McLaren.
[5] The initial estimate was prepared in the amount of $22,175.62 inclusive of HST. Ms. Brown advised she had just moved to British Columbia and sought the cost of repairs be lowered to essential repairs and authorized an updated work order in the amount of $14,181.50 inclusive of HST.
[6] The vehicle was not returned to Hertz on December 22, 2014 and they wait until January 14, 2015 to send a letter to the renter of the vehicle demanding its return and threatening to have it reported as stolen to the police. This apparently proceeds on January 30, 2015 at which time Hertz contacts MasterCard and learns the credit card used had been blocked for fraud.
[7] McLaren proceeds to complete the repairs to the vehicle and stores it on its "large parking lot" charging $60 per day in this regard.
[8] It is not until May 22, 2015 that McLaren retains a bailiff that conducts an ownership search from the Vehicle Identification Number (or "VIN") and learns from the Ministry of Transportation of its reported theft from Hertz. On July 14, 2015 the bailiff advises Hertz, in writing, of its demand for payment of $27,091.75 pursuant to a repairer's lien. Payment is required by August 7, 2015 at noon failing which the vehicle would be "sold or disposed of" as McLaren "sees fit".
[9] Hertz maintains that all of its vehicles have standardized vehicle unit stickers or barcodes affixed to them on five locations, visible on the outside of the vehicle with the exception of one on the driver's door jamb. McLaren maintains the vehicle has no barcodes attached to it.
[10] There is no evidence of any effort made by Hertz to inspect the vehicle and determine the value of the repairs made.
[11] Counsel was retained. They agreed the vehicle would not be sold and this application was issued September 16, 2015.
Issue
[12] Both parties seek to utilize select portions of the Repair and Storage Liens Act, R.S.O. 1990, c.R. 25 ("RSLA") to support their arguments. Hertz seeks return of the vehicle without payment to the applicant. McLaren seeks payment for the repairs completed and storage expense incurred. Section 3 of the RSLA provides the repairer with a lien from "the person who requested the repair" which Hertz accurately states was not them.
[13] McLaren is seeking $10,860 for storage (181 days between December 13, 2014 and June 11, 2015) under section 4 of the RSLA. This section considers how payment in a situation where the storer fails to give notice against the person who should have been given notice, an argument the storage expense should be limited to 60 days under subsection (6). There was no evidence about whether the space used by the vehicle in McLaren's large parking lot deprived it of any revenue from storing another vehicle in its place.
[14] Importantly, the parties agree the RSLA provides wide discretion to me under Part IV – Dispute Resolution and section 23 of the RSLA to determine the "rights of the parties" and "to make such order as it considers necessary to give effect to those rights".
[15] Counsel for Hertz raised policy concerns as part of its argument. My intention is to identify how and why the business practices of each party was lacking in this motion. Alternatively, the evidence each party chose to place before the Court was deficient and I shall attempt to provide insight as to how a claim like this could be more favourably considered should similar circumstances reoccur.
[16] The conduct of Hertz, or their failure to tender evidence was deficient with regard to:
Details as to steps taken to confirm the identity of the renter (which presumably included producing a valid driver's licence) at the time the rental was made;
Confirmation the credit card tendered and used at the time of rental was valid before the vehicle departed the premises whether by charging a small deposit or other means;
The absence of evidence why it took from December 22, 2014 when the vehicle was due back until January 14 to take steps to locate the vehicle and its renter;
Attempts to mitigate its loss by inspecting or at least requesting to inspect the vehicle upon determining its location to satisfy itself as to the value of repairs completed, and/or the existence of the barcodes, and McLaren's claim for unjust enrichment;
Any evidence of its potential loss of revenue or profit from not having the vehicle available to rent to others during the time McLaren refused to release it to them while this proceeding was pending.
[17] The conduct of McLaren, or their failure to tender evidence was deficient with regard to:
a) What it did or did not do to verify ownership of the vehicle, particularly after the purported owner advised she would not be going through insurance and paying for the repairs herself;
b) After the repairs were completed and Ms. Brown failed to contact them or make arrangements to pay the account or pick up the vehicle what contact, if any, or why no contact was made to the insurer initially identified to them;
c) What steps, if any, were taken to secure contact information from Ms. Brown such as a cell phone number or contact person in Ontario as part of accepting her instructions to commence $14,181.50 inclusive of HST of repairs to the vehicle;
d) Aside from an associate with the firm representing McLaren, the failure to tender any evidence that only genuine approved Mazda parts were used in repairing the vehicle or offering to make the vehicle available for inspection by Hertz in order to determine the value of the repairs completed following the onset of this litigation and its claim for unjust enrichment.
Conclusion
[18] Hertz is entitled to its vehicle back. McLaren is entitled to something for the cost of parts, labour and storage expenses it has incurred. The legal doctrine of unjust enrichment that, upon return of the vehicle, Hertz will have its property back in a better condition than it would have received had no repairs been done, that McLaren incurred expenses in conducting the repairs and the "absence of any juristic reason for the enrichment" is as noted in paragraph 38 of Petkus v. Becker, supra. I would also note and agree with the statement, in the previous paragraph of this decision that the principles of equity provide flexibility so judges are able to accommodate the changing needs of society in order to achieve justice.
[19] As a result, Hertz is entitled to an order the Mazda be returned to it upon payment to McLaren of $7,090, representing approximately 50 percent of the repair invoice intending to compensate McLaren for the cost of parts used and now affixed to the vehicle as well as 60 days of storage fees at $60 per day or $3,600 inclusive of taxes for a total of $10,690.
Costs
[20] Counsel for Hertz submitted an account totaling $21,086.38 for its full indemnity legal fees, HST and disbursements. Its Amended Amended Notice of Application sought costs on a partial indemnity basis calculated to be $13,150.15 inclusive of fees, HST and disbursements.
[21] Counsel for McLaren submitted a Costs Outline $12,804.02 inclusive of fees, HST and disbursements at its actual rate.
[22] In my view, the claim for costs by Hertz is excessive. Further, they were only successful at the most basic level, that is determining the amount it must pay for return of the vehicle. In that regard, the quantum claimed on a partial indemnity basis by McLaren in the amount of $8,544.01 is more reasonable. However, in my view, as indicated to counsel, it is inappropriate for McLaren or any other repair facility seeking to take advantage of the provisions of the RSLA provisions not to take independent steps to determine the actual owner of a vehicle upon which is about to perform repairs, particularly in a province with compulsory automobile insurance and where the individual advises the repair shop that he or she instead intends to pay for the repairs him or herself.
[23] The parties should also be encouraged to resolve matters without judicial intervention. In my view, there was little or no effort made in this regard. As a result, in accordance with the discretion permitted to the Court under section 131 of the Courts of Justice Act, R.S.O. 1990 c.C. 43 and the factors enumerated in Rule 57.01, there shall be no costs payable to either party with regard to this application.
Mr. Justice G. Dow
Released: March 15, 2016
CITATION: The Hertz Corporation v. McLaren Collision Centre, 2016 ONSC 1327
COURT FILE NO.: CV-15-536538
DATE: 20160315
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE HERTZ CORPORATION Applicant
– and –
MCLAREN COLLISION CENTRE Respondent
REASONS FOR JUDGMENT
Mr. Justice G. Dow
Released: March 15, 2016