COURT FILE NO.: CV-20-644392
DATE: 20200828
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DAIMLER TRUCK FINANCIAL, a business unit of Mercedes-Benz Financial Services Canada Corporation
Applicant
– and –
9936726 CANADA INC. operating as TIGER TOWING AND HEAVY RECOVERY, TIGER TOWING AND HEAVY RECOVERY operating as a Sole Proprietorship of BALWANT SINGH SRAN, and RUDRAKSHA TRANSPORT LTD.
Respondents
Elaine Gray and Matthew Bradley, for the Applicant
Yuvraj S. Chhina, for the Respondents 9936726 Canada Inc. operating as Tiger Towing and Heavy Recovery, and Tiger Towing and Heavy Recovery operating as a Sole Proprietorship of Balwant Singh Sran
No one appearing for the Respondent Rudraksha Transport Ltd., although on notice of the proceeding
HEARD: August 17, 2020
KIMMEL J.
REASONS FOR DECISION
Overview
[1] This application was scheduled for an urgent hearing by the triage endorsement of Myers J. dated July 21, 2020. The applicant, Daimler Truck Financial, a business unit of Mercedes-Benz Financial Services Canada Corporation (“MBFS”) seeks an order pursuant to s. 23 of the Repair and Storage Liens Act, R.S.O. 1990, c. R.25 (the “RSLA”) and s. 67(1) of the Personal Property Security Act, R.S.O. 1990, c. P.10 (“PPSA”) for immediate and permanent possession of four freightliner trucks identified as #1941, #0085, #0517 and #3987 valued at approximately $280,000.00 (the “Trucks”).
[2] The Trucks, owned by MBFS, were leased to Rudraksha Transport Ltd. (“RTL” or the “lessee”) and are in the possession of the respondent 9936726 Canada Inc., operating as Tiger Towing and Heavy Recovery (“Tiger Towing”). Tiger Towing claims a repairer’s or storer’s lien over the Trucks. MBFS claims that Tiger Towing was not entitled to seize and retain possession of the Trucks and has no entitlement to any lien claims against the Trucks.
[3] RTL’s representative Mr. Dara swore an affidavit in support of the respondents’ position on this application. He was cross-examined on that affidavit by the applicant. RTL was aware of the application and Mr. Dara participated on the initial case conference before Myers J. but filed no material on behalf of RTL beyond the Dara affidavit. Mr. Dara was provided with the information to access the remote hearing but did not join it. The application proceeded in the absence of any submissions on behalf of RTL.
[4] The issues on this application turn on the determination of whether Tiger Towing is a “repairer” or a “storer” of the Trucks within the meaning of the RSLA. This, in turn, depends on the determination of whether Tiger Towing transported or towed the Trucks for the purpose of them being repaired and/or stored them pending repair, on the understanding that it would be paid for such.
[5] Tiger Towing has the onus to establish that it is entitled to a lien under the RSLA. I find that it has not met that onus.
[6] Tiger Towing has not satisfied me that it is a repairer or storer of the Trucks within the meaning of the RSLA. The evidence falls short of establishing that there were any repairs of the Trucks arranged or undertaken, or even intended, at the time they were towed, nor is there any evidence that there were any arrangements with Tiger Towing for paid storage of the Trucks pending any planned or intended repairs. It is not suggested that Tiger Towing ever intended to undertake any repairs itself. Furthermore, even if I were to infer that at least some of the Trucks were towed so that they could eventually be repaired and even if the mere intention of eventual repair is enough to connect the towing to a repair, Tiger Towing willingly gave up possession of the Trucks to RTL after towing and storing them and did not ask for any payment or security at the time of its dispossession. Tiger Towing has not satisfied me on a balance of probabilities, based on the evidence before me, that the invoices it issued were acknowledged in writing by RTL, as it would have to do to enforce a non-possessory lien claim.
[7] Tiger Towing argued that the absence of direct evidence from RTL on certain critical issues (such as the proof, through direct admissible evidence, of written acknowledgments of its invoices by RTL and reliable contemporaneous evidence of any repairs having been made to the Trucks after they were towed) was as much the responsibility of MBFS as its own. It was suggested that the court should defer the final determination of each of its lien claims to individual small claims court trials. Justice Myers observed in his triage endorsement, and I concur, that such an approach would not be an efficient, affordable or proportionate manner of proceeding given the commonality of issues regarding the lien claims in respect of each Truck.
[8] The parties have devoted considerable time and expense to developing an extensive application record over the past four weeks, including with evidence from a representative of RTL who agreed to swear an affidavit in support of the respondents’ position. That his evidence and the evidence tendered by the Tiger Towing representative was insufficient for Tiger Towing to meet the onus to prove its lien claims is not a reason to defer the determination of the validity of Tiger Towing lien claims so that the evidence can be improved.
[9] The court is entitled to expect that it has received the best available evidence on the issues. It has not been suggested that any individuals with direct knowledge of the key factual matters that are lacking were unavailable to give evidence on this application or that they would testify if the matter is deferred. The entitlement of Tiger Towing to a lien claim can be determined now based on the record before me, which all interested parties have had the opportunity to contribute to. I have not been presented with any reason to defer that determination.
[10] The July 21, 2020 triage endorsement reflects the undertaking of the respondents to keep the Trucks secure and in Ontario until the application has been finally resolved. The applicant does not have up to date information about the current location of the Trucks and has requested, but not been provided with evidence, that the Trucks are insured.
[11] The application is granted on the terms outlined at the end of these reasons.
The Facts
[12] The existence, terms and amounts outstanding under the lease agreements entered into between MBFS and RTL in 2016 and 2017 for a total of six trucks is not in dispute. It is not disputed that MBFS owns the Trucks. In accordance with the lease agreements, MBFS registered security interests in the leased trucks under the PPSA. One of the standard lease terms is that, upon the occurrence of any event of default, MBFS is entitled to repossess the leased vehicle.
[13] During the lease terms, the Trucks were re-plated in Nova Scotia and re-branded under the operating name “Northern Alliance Logistics.” RTL continued to operate them across Canada. RTL went into default of its payment obligations under its leases with MBFS in February 2020. There were other subsequent breaches of the leases by RTL as well.
[14] It is also not disputed that Tiger Towing towed certain of RTL’s trucks (five in total, including the four Trucks at issue in this proceeding). Specifically:
a. On January 23, 2020, RTL’s Freightliner bearing VIN 1FUJGLDR6HLHW1941 (“Truck 1941”), was towed from Quebec City, Quebec to Tiger Towing’s yard in Woodbridge, Ontario;
b. On January 27, 2020, RTL’s Freightliner bearing VIN 1FUJGLDR7HLJE0085 (“Truck 0085”), was towed from Delta, British Columbia to Tiger Towing’s yard in Woodbridge, Ontario;
c. On February 19, 2020, RTL’s freightliner bearing VIN 1FUJGLDR6HLJC3988 (“Truck 3988”), was towed from Lethbridge, Alberta to Tiger Towing’s yard in Woodbridge, Ontario[^1];
d. On March 6, 2020, RTL’s Freightliner bearing VIN 3AKJHHDR9JSJM05l7 (“Truck 0517”), was towed from Winnipeg, Manitoba to Tiger Towing’s yard in Woodbridge, Ontario;
e. On May 15, 2020, RTL’s Freightliner bearing VIN 1FUJGLDR6HLJC3987 (“Truck 3987”), was towed from Windsor, Ontario to Tiger Towing’s yard in Brampton, Ontario.
Collectively, the “towing services”.
[15] RTL was unable to pay Tiger Towing’s fees for its towing services.
[16] Tiger Towing agreed to allow RTL to take back the Trucks in February and March 2020. Both the witnesses for Tiger Towing and the RTL witness testified that the reason the Trucks were released to RTL was so that RTL could operate them to try to generate income. MBFS was not privy to the fact that the Trucks had been towed by Tiger Towing or to their return to RTL.
[17] MBFS tried to negotiate a resolution with RTL of the lease defaults. When it was unable to do so, MBFS engaged the services of Don McWilliams & Associates Inc. (the “bailiff”) who recovered two of the six leased trucks directly from RTL (truck #0515 and #3988). Arrangements were initially made between RTL and the bailiff for MBFS to recover the remaining four Trucks, but they were not voluntarily surrendered.
[18] In the meantime, and unbeknownst to MBFS, the Trucks were taken into the possession of Tiger Towing in late May 2020. Eventually the bailiff was told to contact Tiger Towing to inspect three of the Trucks in June 2020, two of which were parked in a field (Trucks #0085 and #1941) and one of which was in a towing yard (Truck #0517). Tiger Towing later disclosed in mid-July 2020 that it also had possession of the fourth Truck (#3987).
[19] After the bailiff inspected the three Trucks, on June 17, 2020 he requested copies of Tiger Towing’s invoices for its towing services. That same day, Tiger Towing registered claims for possessory liens under the PPSA for three of the four Trucks, Truck No.s. 1941, 0085 and 3987.[^2] A set of Tiger Towing invoices for towing services was provided to MBFS through its bailiff on June 25, 2020.
[20] After reviewing this first set of invoices, certain missing information was identified by MBFS in a July 9, 2020 email, such as the VIN # of the Truck towed, and the time and date of the tow. A second set of revised invoices was provided by Tiger Towing in an attempt to address these deficiencies. Ms. Dias, the affiant on behalf of Tiger Towing, explained that these invoices were generated from Tiger Towing’s electronic accounting records in response to the requests from MBFS’s bailiff. The second set of invoices was revised by her to include the requested further information that was not in the system when the first set of invoices was generated. She obtained the additional information from other persons within the company, none of whom have provided any testimony in this proceeding.
[21] Following a July 20, 2020 triage appointment to schedule this application at which it was noted that none of the Tiger Towing invoices had been signed or acknowledged by RTL, a third set of handwritten invoices for towing services of the same five Trucks was produced in the responding record on this application on July 27, 2020. Ms. Dias explained on cross-examination that this third set of invoices are what Tiger Towing refers to as order sheets, prepared by the driver at the time of each tow and then used to input information into their accounting system. None of the drivers who prepared these original handwritten invoices/order sheets provided any evidence on this application.
[22] This third set of handwritten invoices/order sheets each purport to have the name Aman or Aman Kumar printed or signed acknowledging them on behalf of RTL. Mr. Kumar did not testify in this proceeding either. He was identified by Mr. Dara (RTL’s representative) on cross-examination as someone who worked in the Brampton Yard for “Northern”, the shipping company that Mr. Dara says he is currently working for based in Nova Scotia. Despite requests, no employment or payroll information has been provided for Mr. Kumar to confirm his employer as at the dates of these handwritten-invoices/order sheets, nor has he provided any direct or indirect evidence to authenticate his handwriting or signature on them.
[23] The invoice numbers on the handwritten invoices/order sheets are not sequential over time. They are numbered as follows:
a. Invoice # 180205 for Truck #3988 is dated February 19, 2020;
b. Invoice # 180227 for Truck #3987 is dated May 15, 2020;
c. Invoice #180274 for Truck #0085 is dated January 27, 2020;
d. Invoice #180283 for Truck #1941 is dated January 23, 2020; and
e. Invoice # 180296 for Truck #0517 is dated March 6, 2020.
[24] In addition to not following a chronological sequencing, the invoice numbers on Tiger Towing’s handwritten invoices/order sheets are different than the invoice numbers on the original and revised invoices generated from its accounting system. They are also for slightly different amounts, even when the May to June 2020 storage charges are backed out of the computer-generated versions. These discrepancies between the sequencing of the handwritten-invoices/order sheets, and between the amounts of these and the computer-generated invoices, have not been explained.
[25] The handwritten Tiger Towing invoices/order sheets refer only to towing services. Storage fees indicated on the computer-generated invoices are for the period May to June 2020, after the Trucks had been returned to RTL and then given back to Tiger Towing. Tiger Towing acknowledges that it is only in the business of towing. It is not in the business of truck repair or storage.
[26] There is no documentary evidence before the court of any repairs to the Trucks having been made or quoted.
[27] Most of the facts are not controversial. The primary dispute on the facts is about whether RTL acknowledged the towing services in writing before Tiger Towing allowed RTL to take the Trucks back in February/March, 2020. Related to this, MBFS challenges the authenticity of the various sets of invoices for the towing services that Tiger Towing has provided, and challenges the suggestion that the towing services were associated with any repairs of the Trucks.
The Issues to be Decided
[28] The Tiger Towing respondents agree that the only entity that could make a lien claim against the Trucks is Tiger Towing (the numbered company defendant). Tiger towing remains in possession of the four Trucks, although it is disputed whether it was entitled to seize and take possession of them.
[29] The applicant seeks a determination of the rights of the parties pursuant to s. 23(1) of the RSLA and, specifically, a determination of whether Tiger Towing has a right to a lien against any of the Trucks and whether it was entitled to seize the Trucks.[^3] To determine this, the following issues need to be decided in respect of each of the four Trucks:
a. Is Tiger Towing a “repairer” within the meaning of the RSLA?
b. Is Tiger Towing a “storer” within the meaning of the RSLA?
c. Did a lien exist in favour of Tiger Towing under the RSLA against any Truck it repaired and/or stored for an agreed amount or the fair value of such repair and/or storage?
d. If Tiger Towing had a possessory lien against any Truck, was its lien converted into a non-possessory lien at the time that possession was given up and is that non-possessory lien enforceable?
e. Did Tiger Towing have the right to seize and take possession of the Trucks in late May 2020?
f. Should the Applicant be Required to Pay the Amounts of the Tiger Towing Invoices into Court if it Takes Possession of the Trucks?
Analysis
[30] Tiger Towing has the burden of proof to establish that it has an enforceable lien against each of the Trucks under the RSLA. See National Bank of Canada v. CJC Bottling Ltd., 2006 13774, at para. 20 (Ont. S.C.).
[31] The applicant maintains that the lien claimant’s burden must be met with admissible evidence that complies with Rules 39.01(5) and 4.06(8) of the Rules of Civil Procedure. The applicant argues that the respondents’ evidence is woefully deficient in this regard and the impugned evidence should either not be admitted or given no weight. I agree with the applicant that there are deficiencies in the evidence tendered by Tiger Towing.
[32] First, I have read the transcript of the cross-examination of Mr. Dara and it is clear that he has difficulty reading and understanding English. No attempt was made to adhere to the requirements of interpretation under Rule 4.06(8) for his affidavit that is in English. His explanation of how the affidavit was translated for him by a friend before he signed it is far from satisfactory and I have serious concerns about the extent to which he understood what he was attesting to. Furthermore, in many instances when confronted with a discrepancy during his cross-examination, Mr. Dara’s excuse was that the drafter of his affidavit made a mistake. Mr. Dara also testified that he had relied on information contained in the affidavit of Ms. Dias (also in English), which was sent to him for review and apparently relied upon by him as the source of information about many of the contested points relating to the invoices. In these circumstances, an affidavit sworn by someone who does not read or write English and who did not have a certified interpreter of his own affidavit or of the affidavit he says he relied upon can be given little or no weight. See Vaticano Holdings Inc. v. Greco, 2011 ONSC 2513, at paras. 29 and 31.
[33] Second, and related to the last point, Mr. Dara does not disclose in his affidavit that he relied upon Ms. Dias for information about the invoices and towing services that he did not personally recall. This came out during his cross-examination. If he had disclosed that his testimony about these contested facts was based in whole, or in part, on information and belief from her, that would have been problematic under Rule 39.01(5), especially because Ms. Dias also confirmed that some of the information that she attested to about the invoices was not within her direct knowledge.[^4] The problem of hearsay (and, even more so, double or triple hearsay) on contentious matters in an application is not to be taken lightly. See Ontario (Attorney General) v. Paul Magder Furs Ltd. (1989), 1989 4253 (ON SC), 71 OR (2d) 513 (H.C.), at pp. 270-271; see also Aker Biomarine AS v. KGK Synergize Inc., 2013 ONSC 4897, at para. 10, cited by the applicant during oral argument. This, coupled with the apparent inability of Mr. Dara to understand what was written in his affidavit, gives rise to concerns about the reliability of his evidence.
[34] Even on matters about which Mr. Dara purported or might be expected to have direct knowledge, such as the repairs of the Trucks associated with any of the towing services and the identification and authorization of the RTL signatory on the invoices, he was unable to produce any corroborating documents from RTL.
[35] I find that much of the evidence presented to the court on this application about the contested facts surrounding the written acknowledgement by RTL for the invoiced towing services and about the repairs allegedly associated with any of those towing services to be unreliable. While I am not ruling this evidence to be inadmissible, I am unable to place much, if any, weight on it. That evidence is simply not persuasive, especially when considered in light of other evidence.
A. Is Tiger Towing a “repairer” within the meaning of the RSLA?
[36] The RSLA defines “repairer” as follows:
1 (1) In this Act, …
“repair” means an expenditure of money on, or the application of labour, skill or materials to, an article for the purpose of altering, improving or restoring its properties or maintaining its condition and includes,
a) the transportation of the article for purpose of making a repair,
b) the towing of an article,
c) the salvage of an article; (“réparation”)
“repairer” means a person who makes a repair on the understanding that the person will be paid for the repair; (“réparateur”)
[37] To be a “repairer” and entitled to a repair lien under the RSLA, Tiger Towing would have to establish:
i. That it towed the Trucks on the understanding that it would be paid for its towing services; and
ii. That the towing of the Trucks was a necessary expenditure in connection with an intended repair service. See G2000 Express Inc. v. 2251760 Ontario Inc., 2015 ONSC 6031, at para. 12, citing 858579 Ontario Inc. v. QAP Parking Enforcement Limited, 1994 CarswellOnt 775 (Gen. Div.), aff’d 1995 CarswellOnt 442 (Div. Ct.), at paras. 27 and 42.
[38] MBFS disputes that Tiger Towing towed the Trucks at all, and questions its invoices. However, I am satisfied that there is sufficient direct evidence from Mr. Dara given on his cross-examination that the Trucks were towed by Tiger Towing and that there was an understanding that Tiger Towing would be paid for its towing services, despite the unresolved discrepancies previously noted between its handwritten invoices/order sheets and various iterations of its computer-generated invoices. The precise dates and amounts of the towing services may not have been proven, but I am satisfied that the fact of the Trucks having been towed by Tiger Towing prior to May of 2020 has been established on a balance of probabilities.
[39] The evidence before me does not, however, establish on a balance of probabilities that the towing of the Trucks was a necessary expenditure in connection with an intended repair service.
[40] There can be no suggestion that Tiger Towing itself repaired any of the Trucks “by the application of labour, skill or materials to [them] for the purpose of altering, improving or restoring [their] properties or maintaining [their] condition.” Tiger Towing is not in the business of repairing and did not invoice for any repairs or register claims for anything other than its towing services. A “repair”, as defined under the RSLA, can however include the towing of an article.
[41] The courts have been clear in the interpretation of the RSLA that towing an article for the purpose of shifting its location is not a “repair” within the meaning of that statute and does not give rise to a repairer’s lien. See QAP Parking Enforcement (Div. Ct.), at paras. 27 and 36-38. In that case, the Divisional Court concluded that the absence of the phrase “for purposes of repair” in the RSLA definition of “repair” in sub-paragraph (b) towing an article (in contrast with the presence of these words in connection with RSLA definition of repair in sub-paragraph (a) relating to the transportation of an article) was not intended by the legislature to create an anomalous distinction between transportation of a vehicle on a flatbed truck and towing a vehicle. The court emphasized that the RSLA must be read purposefully. Its intent, as its name indicates, is to ensure that an owner does not benefit from a repair or improvement made to an article without paying for it.
[42] In G2000 Express, at para. 12 (citing QAP Parking Enforcement), the court found that there was no repairer’s lien, reiterating that: “In order to qualify for protection under the legislation, the service performed must result in improvement, alteration or some change in the properties of the condition of the tractor. The towing must be a necessary expenditure in connection with the repair service intended.”
[43] There is no documentary evidence before the court on this application of any repairs having been undertaken or arranged in respect of any of the Trucks. Tiger Towing contends that all that matters is the purpose or intent at the time of the towing, and not whether the repairs were actually done. However, the evidence falls short of establishing that purpose or intent.
[44] Tiger Towing argues that it understood the purpose of the tow was for the repair of three of the Trucks over which it claims liens (#0085, #0517 and #3987), and the purpose of the fourth tow (of Truck #1941) was to maintain its condition (because the driver refused to stay and drive it back to Ontario). Tiger Towing argues that in order to meet its onus, all it has to do is demonstrate that that RTL intended to repair or maintain the Trucks when they were towed. For this, it relies upon the evidence of Mr. Dara.
[45] While Mr. Dara says three of the Trucks (#0085, #0517 and #3987) were in need of repair and that the purpose of the tows was to bring them to Ontario so that arrangements could be made for those repairs to be done, he was unable to corroborate this with any direct evidence from the truck drivers, or the company logs (which did not contain any details about the needed or intended repairs at that time), nor has that evidence been sought out by Tiger Towing.
[46] Furthermore, there is no evidence to corroborate the unparticularized statement of Mr. Dara during his cross-examination that the Trucks were repaired before being put back on the road when they were returned to RTL in February/March 2020. Both Mr. Dara and Ms. Dias had attested in their affidavits that the Trucks were returned to RTL in February/March of 2020 with the intention and understanding that RTL would operate them to try to generate income. Mr. Dara’s passing remark on cross-examination that repairs were done at that time before the Trucks were put back into use, without corroboration, cannot be accepted as proof that any repairs were done given the concerns about the reliability of his testimony. This is especially so given that the Carfax reports, obtained by the applicant with respect to the Trucks, do not indicate any repairs in or around the relevant times (of the towing services or when the Trucks were returned to RTL to use).[^5]
[47] I have found that the towing services were provided by Tiger Towing. The evidence is that the Trucks were towed to get them back to Ontario. While they might have been in need of some repairs (it is not difficult to identify some repair that could be done in most vehicles that are driven regularly), that is not enough. For me to find that the towing services were ancillary to repairs of the Trucks in this case, I would need some reliable evidence of repairs having been undertaken within some reasonable time after the towing services were provided, or a quote for repairs having been arranged or obtained around the time of the tow or some other particulars of the needed repairs from the truck drivers or persons with direct knowledge.
[48] The fact that Mr. Dara says now after the fact and without any corroboration, in an affidavit that was not properly translated for him in his native language, that he planned to do repairs at the times of these tows is not sufficient to establish that the towing services were ancillary to repairs.
[49] Regarding the fourth Truck for which no repairs are suggested (#1941), Tiger Towing argues that it was moved from Quebec to Ontario to “maintain its condition” (for fear it might otherwise be damaged if left in Quebec). That does not meet the s.1(1) RSLA definition, which requires that there have been “an expenditure of money on, or the application of labour, skill or materials to, an article for the purpose of…maintaining its condition.” In this instance, nothing was done to maintain the condition of the Truck, it was simply moved from point A to point B and that is the classic example that Divisional Court said in QAP Parking Enforcement was not intended to be covered by the RSLA.
[50] I am not satisfied on the record before me that Tiger Towing towed the Trucks so that they could be repaired (through the application of labour, skill or materials to for the purpose of altering, improving or restoring the properties or maintaining the condition of any of the Trucks).
[51] Tiger Towing was not a “repairer” of the Trucks within the meaning of the RSLA.
B. Is Tiger Towing a “storer” within the meaning of the RSLA?
[52] The RSLA defines “storer” in s. 1(1) as follows:
“storer” means a person who receives an article for storage or storage and repair on the understanding that the person will be paid for the storage or storage and repair, as the case may be. (“entreposeur”).
[53] There is no evidence of any agreement or understanding between Tiger Towing and RTL concerning storage of the Trucks. There is no evidence of any storage fees having been agreed to or charged from the time of the towing services until the Trucks were released back to RTL in February/March 2020. Tiger Towing’s admitted purpose for taking possession of the Trucks between May 20 and 30, 2020 was as security for its unpaid invoices (although the computer-generated invoices subsequent to this refer to storage charges in May and June 2020).
[54] The record does not support a finding that Tiger Towing received possession of the Trucks for storage or for storage and repair, either at the time it provided its towing services or when they were re-possessed. Nor does it support a finding that there was any understanding between Tiger Towing and RTL that Tiger Towing would be paid for the storage or for the storage and repair of the Trucks.
[55] Tiger Towing was not a “storer” of the Trucks within the meaning of the RSLA.
C. Did a lien exist in favour of Tiger Towing under the RSLA against any Truck it repaired and/or stored for an agreed amount or the fair value of such repair and/or storage?
[56] Pursuant to s. 3(1) of the RSLA, a repairer has a lien against an article that the repairer has repaired. Pursuant to s. 4(1) of the RSLA, a storer has a lien against an article that the storer has stored or stored and repaired. If those liens are established then the “repairer” or “storer” is entitled to retain possession of the article until the amount of the lien is paid (that amount is determined based on certain criteria, including the agreed amount or fair value of the repairs or storage).
[57] In light of my findings that Tiger Towing is not a “repairer” nor a “storer” of the Trucks, I find that no possessory lien arose in its favour pursuant to either s. 3 or s. 4 of the RSLA.
[58] Nor has Tiger Towing demonstrated that it provided any services in respect of the Trucks that resulted in any improvement or betterment of the Trucks that would enrich or benefit the applicant. In the circumstances of this case, Tiger Towing is in no different position than any other unsecured creditor of RTL for recovery of its unpaid invoices, for which it had no security.
[59] Tiger Towing’s conduct is also not consistent with its belief that it had lien claims. It did not register its lien interests under the PPSA when it gave up possession of the Trucks. It only did so in June 2020 when its possession of the Trucks was being challenged by the applicant’s bailiff. And then, it only registered possessory lien claims against three of the four Trucks that it had possession of at that time (#1941, #0085 and #3987).
D. If Tiger Towing had a possessory lien against any Truck, was it converted to a non-possessory lien at the time that possession was given up and is that non-possessory lien enforceable?
[60] I do not need to decide this point in light of my previous findings that there is insufficient evidence to establish that Tiger Towing had either a repairer’s or storer’s lien under either s. 3 or s. 4 of the RSLA. Pursuant to s. 7 of the RSLA, a non-possessory lien only arises when a person who is entitled to a possessory lien (under s. 3 or s. 4 of the RSLA) gives up possession without having been paid the full amount of the lien.
[61] Even if I had found that a possessory lien existed in favour of Tiger Towing in respect of any of the Trucks (in other words, if my earlier findings that Tiger Towing was not a “repairer” or “storer” of the Trucks are wrong), it gave up that possessory lien when it returned the Trucks to RTL in February/March 2020 without having been paid for its towing services. After that, at best Tiger Towing could only have had a non-possessory lien.
[62] Pursuant to s. 7(5) of the RSLA, a non-possessory lien is not enforceable unless evidenced by a signed acknowledgment of indebtedness from RTL.
[63] For this, Tiger Towing relies on the handwritten invoices/order sheets that it produced for the first time in response to this application, which it maintains are signed and acknowledged by Aman Kumar on behalf of RTL. Its witness Ms. Dias had no direct knowledge of these documents, which were only produced after it was pointed out to Tiger Towing’s lawyer that no signed acknowledgements had been provided with the invoices originally produced.
[64] Mr. Dara did not identify Mr. Kumar in his affidavit as the person authorized by RTL to acknowledge Tiger Towing’s invoices/order sheets.[^6] He refers only to “RTL staff” having acknowledged the invoices. There is no evidence about Mr. Kumar’s authority to sign on behalf of RTL. On cross-examination, Mr. Dara undertook to produce the employee payroll and other records for Mr. Kumar after having identified him as the yard manager for Northern Alliance, but none were produced.
[65] Further, there is no evidence from Mr. Kumar directly about whether he signed these handwritten invoices/order sheets or under what authority he did so, nor was Mr. Dara even asked to identify Mr. Kumar’s signature on these records produced by Tiger Towing. Mr. Dara also undertook, but did not produce, RTL’s copies of these records.
[66] Mr. Dara also has no direct knowledge or recollection of the handwritten invoices/order sheets that Tiger Towing relies upon as signed acknowledgments of RTL’s indebtedness and his affidavit suffers from other deficiencies, previously noted, that render it unreliable on this subject.
[67] Having been alerted to the deficiencies in Mr. Dara’s evidence and to the position of MBFS that the non-possessory lien it was claiming had not been established on the record, Tiger Towing had the opportunity to seek out further evidence to support its non-possessory lien claim. Although undertakings were given by Mr. Dara during his cross-examination to look for such contemporaneous records, Tiger Towing did not follow up with Mr. Dara to obtain these records.
[68] Any lien that Tiger Towing had was converted to a non-possessory lien when the Trucks were returned to RTL in February/March 2020. That non-possessory lien is not enforceable in the absence of evidence to satisfy me that the indebtedness of RTL to Tiger Towing was acknowledged in writing at the time the Trucks were towed and/or at the time that they were returned to RTL.
E. Did Tiger Towing have the right to seize and take possession of the Trucks in May 2020?
[69] Tiger Towing had no enforceable lien against the Trucks in May 2020. In the absence of such, it had no right to seize and take possession of (or sell) them.
[70] The subsequent PPSA registrations in respect of three of the Trucks in June 2020 does not establish rights that did not exist.
[71] As the owner of the Trucks under leases from RTL that are in default, the applicant has a higher and better right to possession of the Trucks.
F. Should the Applicant be required to pay the amounts of the Tiger Towing invoices into court if it takes possession of the Trucks?
[72] The regime for payment of the lien amount into court under s. 24 of the RSLA only applies where a lien is acknowledged but the amount is in dispute. See Intact Insurance, at para. 46.
[73] That is not this case, where the applicant challenges Tiger Towing’s entitlement to any liens, and Tiger Towing has failed to establish that it has any enforceable liens. Having successfully challenged that entitlement, there is no basis on which MBFS would be required to pay the Tiger Towing invoice amounts into court as a condition of it taking possession of the Trucks.
[74] Tiger Towing argued that even if not within the regime of s. 24, if there is a need for a more fulsome adjudication of the question of Tiger Towing’s lien entitlements, it is open to the court to fashion a remedy under s. 23 to require the payment of the Tiger Towing invoice amounts into court pending that further determination as a condition of any order returning the Trucks to the applicant.
[75] I do not think deferring the determination of Tiger Towing’s lien entitlements is a proportionate or an efficient way in which to proceed. The parties dedicated significant time and effort to the record for this application. Tiger Towing had the chance to make its case for lien claims and failed to do so. The deficiencies that rendered much of the evidence relied upon by Tiger Towing unreliable might have been remedied if it had presented evidence from individuals with direct knowledge, or followed up on the undertakings given by Mr. Dara. I have not been advised of any further or better evidence that would be made available if I were to defer the ultimate determination of Tiger Towing’s lien entitlements to another day. The record has been created and the issues that I need to decide can be decided on the basis of the record as it stands before me.
[76] Tiger Towing has not provided the addresses or locations of the Trucks or confirmed whether they are insured. While it undertook, though its counsel, at the case conference before Myers J. to hold the Trucks in its yard and indicated at the hearing that it was prepared to continue that undertaking if the court defers final adjudication, the lack of information about location and insurance is of some concern.
Disposition, Costs and Implementation
[77] For the foregoing reasons, the following orders are made:
a. Granting MBFS immediate and permanent possession of the four Trucks
b. Declaring that Tiger Towing has no lien against the Trucks under the RSLA;
c. Declaring that Tiger Towing had no right to seize and does not have the right to sell the four Trucks in May of 2020.
[78] The applicant seeks its costs of this application. Given the urgency and speed with which the application proceeded, neither party had shared with the other their bills of costs, but it was agreed at the hearing that they would be exchanged within five days afterwards and I assume that has occurred. I encourage MBFS and the Tiger Towing respondents to try to reach an agreement on costs after receiving my decision. If they are able to do so, counsel are directed to advise the court of such agreement on costs on or before September 11, 2020.
[79] If no agreement is reached on costs, each side may deliver to the other and file with the court a brief submission on costs (of no more than 3 pages double spaced), together with their bill of costs on September 18, 2020 and each may deliver and file a brief response to the other side’s costs submission (of no more than 1.5 pages double spaced) on September 25, 2020. The court copies of these costs submissions may be filed by email to my assistant: linda.bunoza@ontario.ca. If the court has not received any cost submissions from the parties by September 25, 2020, or such later date as the parties may ask the deadline to be extended to and the court may permit, the issue of costs will be deemed to be settled without the necessity of any further ruling from the court.
[80] Notwithstanding Rule 59.05, the orders and directions contained herein are effective from the date of this decision and are enforceable without any need for entry and filing. In accordance with Rules 77.07(6) and 1.04, no formal Order need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this decision may nonetheless submit a formal Order for original signing, entry and filing when the court returns to regular operations.
Kimmel J.
Released: August 28, 2020
COURT FILE NO.: CV-20-644392
DATE: 20200828
BETWEEN:
DAIMLER TRUCK FINANCIAL, a business unit of Mercedes-Benz Financial Services Canada Corporation
Applicant
– and –
9936726 CANADA INC. operating as TIGER TOWING AND HEAVY RECOVERY, TIGER TOWING AND HEAVY RECOVERY operating as a Sole Proprietorship of BALWANT SINGH SRAN, and RUDRAKSHA TRANSPORT LTD.
Respondents
REASONS FOR DECISION
Released: August 28, 2020
[^1]: This truck was never repossessed by Tiger Towing and is not the subject of any lien claim by Tiger Towing.
[^2]: It was confirmed during oral argument on the application that no relief is being sought by the Respondents arising out of the PPSA filings made in June 2020.
[^3]: The applicant seeks relief under s. 23 of the RSLA because it is seeking a determination of Tiger Towing’s rights to a lien and to seize and take possession of the Trucks. Since MBFS does not concede Tiger Towing’s entitlement to a possessory lien, the procedure for payment of the disputed amount of the lien into court under s.24 of the RSLA is not engaged at this time. See Intact Insurance v. 229152 Ontario Limited, 2017 ONSC 3282, at para. 49.
[^4]: There is a list at Schedule “C” to the applicant’s factum of challenged statements in the Dias affidavit relating to contentious matters that she purports to attest to, based on information and belief. This has been factored into my assessment and weighing of the evidence. I have decided, in the exercise of my discretion, not to strike the impugned paragraphs of her affidavit.
[^5]: Tiger Towing argues that the Carfax reports are unreliable because they do not refer to a repair of one of the Trucks acknowledged to have been done under warranty at a different time (but within the Carfax report period). However, it is not the applicant’s onus to disprove that there were repairs done. The evidence of any repairs having been done is lacking and the Carfax reports simply corroborate that there is no independent or objective source that could establish the repairs having been done.
[^6]: Mr. Dara’s evidence that he authorized his (unnamed) site manager to give possession of the Trucks back to Tiger Towing between May 20 and 30, 2020, even if accepted, is not evidence of a contemporaneous acknowledgement by RTL of indebtedness to Tiger Towing for the towing services at the time the Trucks left the possession of Tiger Towing in February/March, 2020.