Citation and Court Information

CITATION: 730162 Ontario Ltd. v. Intact Insurance Company, 2026 ONSC 2578

COURT FILE NO.: CV-23-00001524

DATE: 20260508

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

730162 ONTARIO LTD. A/O YORK AUTO REPAIRS AND TOWING Applicant

– and –

INTACT INSURANCE COMPANY Respondent

COUNSEL: W. Xavier Navarette, Counsel for the Applicant

Emily A. Schatzker, Counsel for the Respondent

HEARD: January 28, 2026

REASONS FOR DECISION

J. Di Luca J.

Overview

[1] This application relates to a dispute over the cost of storage services for vehicles towed in the City of Vaughan. The applicant, 730162 Ontario Ltd. a/o York Auto Repairs and Towing (“York Auto”), wants to be paid $70.80 per day for storage services. This is the rate it has agreed to with York Regional Police.

[2] The respondent, Intact Insurance Company (“Intact”), submits that the maximum allowable rate for daily storage in the City of Vaughan is capped at $60 per day by operation of Municipal By-Law 122-2022 (“the By-Law”) as it read at the relevant time.

[3] The parties seek the Court’s direction on the maximum allowable daily rate for storage services.[^1]

[4] For the reasons that follow, the application is dismissed.

[5] I find that the maximum allowable rate for storage services at the relevant time was capped at $55 for outdoor storage and $60 for indoor storage per day by operation of the By-Law.

Factual Background

[6] York Auto is a licensed auto repair, towing and storage service provider operating in the City of Vaughan. Since at least 2017, York Auto has been under contract with York Regional Police Services (“YRP”) and responds to towing and service requests made by YRP in the City of Vaughan.

[7] Intact is a federally incorporated insurance company operating across Canada. It is the insurer for the vehicles that are the subject of storage fee claims in this application. Pursuant to s. 152(1) of the Insurance Act, Intact has subrogated to all rights of its individual policy holders who own the subject vehicles.

[8] The subject vehicles were either recovered after being stolen or stored following involvement in a collision. York Auto towed and stored the vehicles and then billed Intact.[^2]

[9] The storage fees were billed at a rate that was agreed upon as between York Auto and YRP. The initial private contract between York Auto and YRP resulted from a Request for Proposal that closed on March 27, 2017. The contract set out an approved maximum daily rate for outdoor storage of $60 per day and $65 per day for indoor storage. This contract also set out towing rates for vehicles depending on their size.

[10] A one-year month-to-month contract extension was agreed upon on December 29, 2022. This contract extension included a “price adjustment” for towing rates across each category of vehicle size. The maximum outdoor storage fees were increased from $60 to $70.80 per day. The maximum indoor storage fees were increased from $65 to $76.80.[^3]

[11] Neither Intact nor the City of Vaughan are parties to the private contract.

[12] The cover letter to the contract extension and the revised fee schedule both appear to have been signed by Josie Filipelli, a “Bylaw, Citizen Service Representative” of the City of Vaughan on January 24, 2023. To be clear, Ms. Filipelli did not sign the actual contract as a signatory. Her signature and job title appear to have simply been written in ink on the face of the documents. No evidence from Ms. Filipelli was included in the application. Similarly, limited evidence explaining the import of Ms. Filipelli’s signature on the contract extension was provided.

[13] Since the contract extension, York Auto has been billing storage fees at a daily rate of $70.80. It takes the position that this is the applicable rate contractually agreed to by YRP. Intact disputes this assertion. In response, Intact has resorted to the provisions of the Repair and Storage Lien Act (“RSLA”) and has commenced multiple lien applications in Small Claims Court challenging the rate.[^4]

[14] The lien application process has resulted in the vehicles being held subject to further storage fees while the dispute gets settled. York Auto takes the position that it will not release the vehicles until the disputed amounts are paid into court. York Auto also takes issue with resort to the lien application provisions and argues that Intact is acting vexatiously in bringing multiple lien applications under the RSLA.

[15] As of the date of the factum, the disputed amount was approximately $96,000 spread out across 28 lien applications. Given additional lien applications and ongoing fees incurred pending determination of this application, the amount is now over $483,000.

[16] York Auto seeks a declaration that the maximum daily rate for storage is $70.80 as it claims is set out in the contract extension. It also seeks a declaration that Intact is a vexatious litigant in relation to the multiple lien applications commenced in the Small Claims Court.

[17] Intact maintains that the applicable By-Law governs and that York Auto has charged rates that violate the clear terms of the By-Law.

The By-Law Provisions

[18] At the relevant time, section 29.0(61) of By-Law 122-2022 provided:

29.0(61) No Tow Truck Owner or Tow Truck Driver shall charge or permit to be charged by or on behalf of any other Person a fee for the storage of a vehicle exceeding fifty-five dollars ($55.00) per day for outside storage or sixty dollars ($60.00) per day for indoor storage at any building or place where the vehicle is stored, including a Public Garage, storage facility, pound facility, or salvage yard.

[19] Section 29.0(48.1) of the By-Law created an exception to certain fee maximums. It provided:

29.0(48.1) Every Tow Truck Owner or a Tow Truck Broker, that had entered into a written contract or agreement with a government agency, is exempt from the schedule of rates referred to in Sections 29.0(44) and 29.0(46.1), provided that a copy of such written schedule or rates and the contract or agreement relating thereto is filed with the Licensing Officer at least thirty (30) days before any Services to which such contract or agreement applies are to be provided.

[20] Section 29.0(44) provided as follows:

(44) Every Tow Truck Owner and every Tow Truck Driver who tows or otherwise conveys a vehicle with Gross Vehicle Weight Rate not exceeding two thousand seventy-one (2271) kilograms from a Collision Scene in the City of Vaughan to any point within the City or any point outside the City, shall only charge or cause to be charged:

(a) an all-inclusive, flat-rate fee of two hundred and eighty ($280.00) dollars, with no additional charges other than applicable federal and provincial taxes;

(b) a maximum additional fee of one hundred ($100.00) dollars for an Off-Road Recovery, the mileage rate in subsection 29.0(46) of this By-law, or the Collision Reporting Centre wait time rate in subsection 29.0(47) of this Bylaw;

(c) a maximum additional fee of no more than forty-five ($45.00) dollars, if a vehicle requires the use of dollies;

(d) a maximum additional fee of no more than one hundred and fifty ($150.00) dollars, if a vehicle requires the use of a second truck;

(e) a maximum additional winch fee of no more than forty-five ($45.00) dollars per 1/4 hour;

(f) a maximum fee of no more than twenty ($20.00) dollars, if a vehicle requires tarping;

(g) a maximum fee of no more than ten ($10.00) dollars for a bag of absorbent material (oil dry);

(h) any other additional fees shall be approved by the Chief Licensing Officer.

[21] Section 29.0(46.1) provided as follows:

(46.1) Every Tow Truck Owner and every Tow Truck Driver who tows or otherwise conveys a vehicle with a Gross Vehicle Weight Rate exceeding two thousand two hundred and seventy-one (2,271) kilograms but less than eleven thousand seven hundred and ninety-four (11,794) kilograms from a Collision Scene in the City to any point within the City or any point outside the City, shall only charge or cause to be charged:

(a) an all-inclusive, flat-rate fee of three hundred and seventy-three ($373.00) dollars, with no additional charges other than applicable federal and provincial taxes;

(b) a maximum additional fee of one hundred ($100.00) dollars for an Off-Road Recovery, the mileage rate in subsection 29.0(46) of this By-law, or the Collision Reporting Centre wait time rate in subsection 29.0(47) of this Bylaw;

(c) a maximum additional fee of no more than seventy-five ($75.00) dollars, if a vehicle requires driveshaft pulled;

(d) a maximum additional fee of no more than two hundred and fifty ($250.00) dollars, if a vehicle requires the use of a second truck;

(e) a maximum additional winch fee of no more than seventy-five ($75.00) dollars per 1/4 hour;

(f) a maximum fee of no more than twenty ($20.00) dollars, if a vehicle requires tarping;

(g) a maximum fee of no more than ten ($10.00) dollars for a bag of absorbent material (oil dry);

(h) any other additional fees shall be approved by the Chief Licensing Officer.

The Relevant Highway Traffic Act Provisions

[22] Section 134.1 of the Highway Traffic Act provides as follows:

Removal of vehicle, debris blocking traffic

134.1 (1) Where a police officer considers it reasonably necessary,

(a) to ensure orderly movement of traffic; or

(b) to prevent injury or damage to persons or property,

he or she may remove and store or order the removal and storage of a vehicle, cargo or debris that are directly or indirectly impeding or blocking the normal and reasonable movement of traffic on a highway and shall notify the owner of the vehicle of the location to which the vehicle was removed.

Costs of removal

(2) The costs and charges for the removal and storage of the vehicle, cargo or debris removed are a debt due by the owner, operator and driver of the vehicle, for which they are jointly and severally liable, and the debt may be recovered in any court of competent jurisdiction and are a lien upon the vehicle, which may be enforced in the manner provided by the Repair and Storage Liens Act.

The Arguments Advanced

[23] York Auto asserts that it is specifically authorized to bill vehicle storage rates at $70.80 per day because this is the rate that it has contractually agreed to with YRP.[^5] In short, York Auto argues that the police are statutorily obligated under s. 134.1(1) of the HTA to remove and store vehicles in certain circumstances relating to the orderly movement of traffic and the safety of persons and/or property. In order to comply with this statutory obligation, the police hire third party service providers, such as York Auto, to tow and store vehicles. In doing so, the police enter into contracts with service providers which include agreed upon rates.

[24] York Auto argues that the agreed upon rates are fully recoverable under the HTA. In support of this submission, it points to s. 134.1(2) of the HTA which directs that the “costs and charges” relating to the removal and storage of a vehicle are “a debt due by the owner, operator and driver of the vehicle.” York Auto takes the position that the contractual rate that has been agreed upon between it and YRP is a “debt” due by the owner, operator and driver of the vehicle that is towed and stored.

[25] While s. 134.2(2) also stipulates that the costs and charges are a lien upon the vehicle, which may be enforced in accordance with the RSLA, York Auto takes the position that resort to the RSLA in the manner undertaken in this case amounts to a collateral attack on the contractual rates agreed upon between York Auto and YRP. In essence, York Auto claims that Intact is improperly resorting to the RSLA in order to negotiate lower rates and/or seek the court’s determination of applicable rates in individual cases, which results in unnecessary litigation and commercial uncertainty. As a result, York Auto argues that resort to the RSLA applications is not only unnecessary, but also abusive of the court process.[^6]

[26] In terms of the City of Vaughan By-Laws, York Auto takes the position that the contractual rate it has agreed upon with YRP is permissible for two reasons. First, it argues that the HTA is a “higher form of legislation” and as such, to the extent that the By-Laws are inconsistent with the provisions of the HTA, the By-Law must give way to the provincial legislation and, inferentially, give way to the agreed upon contractual rates. That said, York Auto does not suggest that the By-Law is ultra vires of municipality. It is simply alleged to be in conflict with the HTA.

[27] Second, York Auto argues in the alternative that the agreed upon rates fall within an exception in the By-Laws and as a result are permissible. Lastly, it also submits that the agreed upon rate is justified on a quantum meruit basis, considering the rate of inflation over time.

[28] In response, Intact argues that the City of Vaughan By-Law provisions are clear in terms of the maximum rates that can be charged for storage services. On a proper reading of the By-Law, the maximum rates are subject to no exception. While York Auto and YRP agreed to rates higher than the maximum rates in the By-Law, those agreed upon rates are not applicable as they are in violation of the By-Law.

[29] Intact also argues that it is perfectly entitled to resort to the RSLA applications in order to address the issue of the storage rates being charged.

Analysis and Findings

[30] I start my analysis by examining the relevant provisions of the then operative By-Law relating to the storage of towed vehicles.

[31] Section 29(61) of the By-Law is unequivocal. It sets the maximum rate for storage at $55 per day for outdoor storage and $60 per day for indoor storage. There is nothing in section 29(61) of the By-Law that differentiates storage fees for vehicles towed from a “Collision Scene” or vehicles towed following a theft recovery or towed for some for some other reason. The section on its face applies to the storage of all towed vehicles.

[32] Contrary to the submission of York Auto, I do not read the By-Law as permitting an exception in relation to storage fees. Section 29(48.1) of the By-Law permits an exception only to the rates specified in sections 29(44) and 29(46.1), where certain conditions are met.

[33] Tellingly, section 29(48.1) of the By-Law does not create an exception for the maximum storage fees set out in section 29(61) of the By-Law.

[34] Furthermore, sections 29(44) and 29(46.1) set out specific fees for towing cars from a “Collision Scene.”[^7] They do not address the towing of vehicles following something other than a collision. More importantly, they do not specifically address storage of towed vehicles.

[35] I reject York Auto’s submission that sections 29(44)(h) and 29(46.1)(h) create “catch-all” clauses which must include storage fees. This submission is premised on a misreading of the By-Law provisions.

[36] Read in a plain, ordinary and grammatical sense in accordance with the modern principles of statutory interpretation, sections 29(44)(h) and 29(46.1)(h) of the By-Law merely permit additional fees as approved of by the Chief Licensing Officer. These sections, however, must be read in context. Sections 29(44)(a-g) and 29(46.1)(a-g) set out a specific list of fees for a specific enumerated list of towing related services for vehicles towed from a “Collision Scene.” As such, sections 29(44)(h) and 29(46.1)(h) of the By-Law must relate to fees for towing from a collision scene and not storage fees in general. In other words, these sections permit towing related fees, in addition to those specifically listed in sections 29(44)(a-g) and 29(46.1)(a-g), but only where those additional towing related fees are approved of by the Chief Licensing Officer.

[37] To interpret sections 29(44)(h) and 29(46.1)(h) as generally applying to storage fees would be tantamount to re-drafting section 29(48.1) to include an exception to the storage fees listed in section 29(61) of the By-Law.[^8] This interpretation is neither harmonious with the provisions of the By-Law nor contextually supportable.

[38] Even if the interpretation advanced by York Auto was correct, there is no evidence in the record before me that the subject storage fees were “approved by the Chief Licensing Officer” as required under sections 29(44)(h) and 29(46.1)(h). On this issue, I note the absence of evidence relating to the nature and purpose of Josie Filipelli’s signature and handwritten notation on the contract extension. I also note that at the hearing of the application, counsel for the applicant essentially conceded this point.

[39] As well, there is insufficient evidence that a copy of the agreement between York Auto and YRP was filed with the Licensing Officer at least thirty (30) days before any Services to which such contract or agreement applies are to be provided as required by section 29(48.1) of the By-Law. In reaching this conclusion, I note that on January 24, 2023, the City of Vaughan appears to have accepted a Towing Rate Sheet filed by York Auto which sets out the increased fees, including the fees for storage, beyond the By-Law maximums. Under the heading “For Office Use Only”, and the subheading “Reviewed by the following staff:” the name “Victoria McKaig” appears. Ms. McKaig appears to be employed by the City of Vaughan in some unspecified capacity.

[40] Mr. DiMeo’s evidence on this issue is vague and does not assist in establishing the requirements of the By-Law were satisfied, assuming the exception actually applied. I note that Mr. DiMeo was cross-examined on this issue, and he testified that while Ms. Filipelli and a second individual named “Victoria” never specifically told Mr. DiMeo that York Auto was permitted to use the rates agreed upon with YRP, he interpreted the fact that they signed the rate sheet as confirmation. He also testified that Ms. Filipelli and “Victoria” discussed the storage fees when they signed the rate sheet, though he received nothing in writing.

[41] That said, I note that the rate sheet document, which appears to be a form created by the City of Vaughan, but filled in by York Auto, includes “vehicle storage” as a heading on the form which permits the submitter to write in an amount that is different than the set maximum. This portion of the form suggests that fees in excess of the By-Law maximums may be charged for vehicle storage. Notwithstanding this curious aspect of the form, I remain satisfied that the correct interpretation of the By-Law does not permit this possibility. In my view, this appears to be a situation where the form in use does not match the By-Law in operation at the time.

[42] I turn next to addressing York Auto’s alternative argument which is that the By-Law is inconsistent with s. 134.1(2) of the HTA and that therefore the By-Law is, on the basis of paramountcy, inapplicable or invalid to the extent of the inconsistency. Again, I note that there is no challenge to the municipality’s authority to set maximum fees on certain services, such as towing and storage. The only challenge is paramountcy.

[43] On this issue, I note that s. 134.1(2) of the HTA stipulates that the “costs and charges” for the removal and storage of a vehicle are a “debt due by the owner, operator and driver” of the vehicle. This section further stipulates that the debt may be recovered in any court of competent jurisdiction and further that the costs and charges are a lien which may be enforced under the RSLA.

[44] This section of the HTA does not specifically empower the police to set the costs associated with the towing and storage of vehicles. It merely makes the costs associated with towing and storage a debt payable by the owner, operator and/or driver of the vehicle towed and/or stored.

[45] The municipality, through its duly enacted By-Law, governs the licensing process and maximum allowable rates for towing and storage services in the City of Vaughan. It determines what can and what cannot be charged for certain towing and storage services conducted within its borders.

[46] Read together, there is no conflict or inconsistency, see Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161 and 114957 Canada Ltée (Spraytech Société d'arrosage) v. Hudson (Town), 2001 SCC 40, [2001] 2 S.C.R. 241. The provisions of the HTA simply allow the costs and charges related to towing to be treated as a debt enforceable in a court of competent jurisdiction or as a lien enforceable in accordance with the Repair and Storage Lien Act. When the towing takes place in the City of Vaughan, the “costs and charges” are subject to the maximums set by the By-Law, unless an exception in the By-Law applies.

[47] While YRP and York Auto entered into a private contract respecting rates charged for towing and storage services, that private contract cannot override the By-Law unless the rates agreed to in the contract fit within the permissible exceptions, which, as I have already explained, they do not. As such, it appears that YRP and York Auto entered into an agreement for storage services at a rate that was not permitted by the City of Vaughan By-Law applicable at the time. Put another way, while York Auto and YRP were free to enter into a contract for services as they saw fit, to the extent that their contract contemplated the provision of services within the City of Vaughan, their contract should have respected the applicable By-Law. It did not.

[48] In view of these findings, I need not fully consider York Auto’s additional arguments regarding the propriety of Intact’s resort to multiple applications under the RSLA. That said, I note that resort to the RSLA is specifically contemplated in s. 134.1(2) of the HTA and it would appear that, while perhaps cumbersome and costly, the RSLA can be used to challenge rates charged in excess of maximums permitted by the By-Law. As well, I note that in J.P. Towing v. Intact, 2019 ONSC 1495, Pattillo J. refused to find that Intact’s resort to the RSLA warranted a vexatious litigant finding, noting that “the record in this case does not come close…to establishing that Intact’s use of the Act’s procedures…is vexatious.”

[49] Lastly, in view of my finding that By-Law’s maximum fee for storage was applicable at the relevant time, I also need not consider York Auto’s quantum meruit claim. While fair storage costs may or may not be higher than the maximum allowed by the By-Law, there is no challenge to the By-Law’s maximums. In other words, apart from the paramountcy argument, the applicant is not otherwise challenging the By-Law. In these circumstances, quantum meruit is irrelevant.

[50] The application is dismissed.

[51] At the relevant time, the maximum rate for storage of towed vehicles was set by the By-Law, specifically $55 per day for outdoor storage and $60 per day for indoor storage.

[52] I urge counsel to resolve the outstanding RSLA claims in view of this finding.

[53] In terms of costs, within 15 days of the release of these Reasons, the respondent may file written costs submissions no longer than three pages in length, exclusive of appropriate appendices. The applicant shall have 30 days to file its costs submissions, also no longer than three pages, exclusive of appropriate appendices. The costs submissions should be sent to my judicial assistant at mary.galluzzo@ontario.ca.

J. Di Luca J.

Released: May 8, 2026

CITATION: 730162 Ontario Ltd. v. Intact Insurance Company, 2026 ONSC 2578

COURT FILE NO.: CV-23-00001524

DATE: 20260508

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

30162 ONTARIO LTD. A/O YORK AUTO REPAIRS AND TOWING Applicant

– and –

INTACT INSURANCE COMPANY Respondent

REASONS FOR DECISION

J. Di Luca J.

Released: May 8, 2026

[^1]: While this application is of importance to the parties as there is a significant amount alleged to be owed for services provided over the relevant time period, the application is moot going forward as the portion of the By-Law at issue has been repealed and a new province-wide process regulating towing and storage fees is in place, see Towing and Storage Safety and Enforcement Act, 2021 S.O. 2021, c/26, Sched. 3 and the Regulations passed thereunder as of January 1, 2024.

[^2]: There is no dispute over towing fees, only storage fees.

[^3]: Arguably, the contact extension lists the storage fee increases only under the heading “Large Duty Hook Up.” No storage fees are listed in relation to Light Duty and Medium Duty Hook Ups This can be contrasted with the Fixed Pricing Schedule found at s. 4.7 of the 2017 Request for Proposal, wherein storage fees are set out under the heading “Pound Fees” and would thereby apply to all classes of tows. When the two schedules are read together, it is clear that the prescribed storage fees in the contract extension are meant to apply across all classes of tows. In other words, the absence of a heading “Pound Fess” in the 2022 fee schedule does not mean that the revised storage rates are only applicable to vehicles that needed a large tow truck for towing. The fact that other services such as winching, dollies, and waiting time are similarly listed under “Large Duty Hook Up” supports this interpretation. I find that the schedules in both contracts simply set out towing fees for three classes of tow truck and also set out separate fees for storage and other towing related services. This apparent discrepancy appears to have been addressed in a later version of the schedule dated March 31, 2023.

[^4]: The various Small Claims Court lien applications are “on hold” pending determination of this application. The parties have agreed to attempt to resolve these applications based on the outcome of this proceeding.

[^5]: The evidence on the application suggests that there is some inconsistency in Intact’s refusal to pay the storage rate agreed upon between YRP and York Auto. At times, Intact has paid the agreed upon amount. At other times, it has not. It does not appear that Intact has a written policy directing its adjusters on this issue.

[^6]: In support of its arguments, York Auto relies on the decision of Pattillo J. in J.P. Towing v. Intact, 2019 ONSC 1495, wherein the Court found that a daily storage rate of $70.00 was appropriate by application of res judicata doctrine based on the decision of Deputy Judge Ashby in J.P Towing v. Sherwood, (26 January 2016) Toronto SC-12-15217-00, a Small Claims Court test case which examined the issue on a quantum meruit basis. Of crucial note, however, unlike the City of Vaughan By-Law at issue in this case, the Toronto By-Law does not set out maximum fees for storage services.

[^7]: The inclusion of the defined term “Collision Scene” limits the scope of the provision. While some vehicles are towed from a “Collision Scene”, other vehicles, such as those involved in a theft recovery, are often not.

[^8]: It would also lead to other interpretative complications including the fact that sections 29(44) and 29(46.1) only relate to vehicles towed from “Collision Scenes.” As such, it would mean that the maximum storage rates for vehicles towed from a collision scene would potentially be subject to exception, but not maximum storage fees for vehicles not towed from a collision scene.