Overview

1The plaintiff, Royal Auto Inc. (“Royal Auto”), claims payment of storage fees from the defendant, Belair Direct Auto Insurance (“Belair”), after a customer had his vehicle (insured by Belair) towed to its garage following a motor vehicle accident and the vehicle remained at its premises for 73 days.

2The central issue raised by this claim is whether Royal Auto is entitled to charge and recover storage fees in respect of a vehicle towed to its premises at the direction of the vehicle’s owner without holding a vehicle storage certificate under the Towing and Storage Safety and Enforcement Act, 2021, S.O. 2021, c.26, Sched. 3 (“TSSEA”).

3For the reasons which follow, I find that by receiving and storing the vehicle, Royal Auto is prima facie subject to the requirements of the TSSEA. Royal Auto is exempt from the application of the TSSEA only to the extent that it stored the vehicle for the purposes of repairs and did not charge a fee for that purpose. If Royal Auto seeks to charge storage fees, it must

Facts

comply with the TSSEA certification requirements. As Royal Auto does not hold a vehicle storage certificate, it is not entitled to charge storage fees.

Facts

4Royal Auto carries on business providing automobile repair services from premises it leases at 242 Birmingham Street, Unit G, in Toronto. Royal Auto’s premises consist of a small office space and a garage with three repair bays each of which has a vehicle hoist. While Royal Auto temporarily stores vehicles while they are under repair and while waiting for owners to retrieve them, it does not otherwise provide vehicle storage services.

5Royal Auto has no space for vehicle storage beyond its garage. A laneway behind the building provides access to Royal Auto’s garage, but that laneway is shared with four other tenants at the building and vehicles cannot be parked there except for very short periods. Royal Auto also has no space for parking vehicles outside of its premises, such as designated spaces in a parking lot. When Royal Auto needs to “store” a vehicle while under repair or while waiting for the owner to pick it up, the vehicle must be kept in one of the three repair bays in the garage. While the vehicle is being “stored”, Royal Auto is unable to use that repair bay and vehicle hoist for repair of another vehicle.

6Royal Auto does not in the ordinary course charge any fees as this is encompassed in the repair services. There have been five occasions in which an owner failed to pick up their vehicle for an extended period. On those occasions, Royal Auto has charged the owner a fee on the basis that Royal Auto cannot use a hoist and work on other cars while the vehicle remains at its premises. Each hoist reportedly generates approximately $300 per day, and Royal Auto currently charges $120 per day to recoup a portion of its losses.

7On Friday, July 5, 2024, the owner of Royal Auto, Krzysztof Kiernicki (“Chris”), received a call from Jesse Marshall (“Jesse”). Jesse and his family were regular customers of Royal Auto and acquainted with Chris. Jesse explained that he had been in a motor vehicle accident and asked if he could have his vehicle, a Mazda 3G, towed to the garage so that Chris could assess the damages. At trial, Jesse explained that that he called his parents from the scene of the accident to ask their advice. They recommend that Jesse have his car brought to Royal Auto, and Jesse then called Chris to that end. Jesse had a CAA membership so had CAA bring his car to Royal Auto’s premises.

8Jesse also contacted Belair, which insured his vehicle, to report that he had been in an accident. Belair directed Jesse to have his car towed. Jesse explained that he had already arranged to have the car brought to Royal Auto. The Belair representative apparently took no issue with that arrangement.

9Following the car’s arrival at the garage on July 5, 2024, Chris inspected the vehicle and noted damage to the front bumper, grill, and hood. He reportedly told Jesse that the damage was repairable. On Monday, July 8, 2024, Chris received a call from a Belair representative asking that he take photographs of the vehicle. A Belair representative also emailed Chris on that date to specify what photographs were required and to direct Chris to send them to an

@cc.intact.net email address. Chris subsequently took the photographs as requested and emailed them to Belair that day.

10Following receipt of the photographs, Belair informed Jesse that the car was deemed a complete loss. Jesse disagreed and requested that Belair conduct an in-person inspection of his car in order to reconsider its position. On or about July 15, 2024, a Belair representative attended Royal Auto’s premises to inspect the vehicle. At the representative’s request, Chris lifted the car on a hoist so that the undercarriage could be inspected. Following the inspection, the Belair representative informed Chris that the vehicle was not repairable and then left. Belair subsequently informed Jesse that the vehicle was deemed a complete loss and that it would pay him the value of the car and assume ownership. Jesse settled with Belair on that basis.

11For reasons which are unclear, Jesse’s car remained at Royal Auto’s premises occupying one of the three repair bays. It was not until August 2, 2024 that Belair contacted Chris about the vehicle; a representative called to inquire about his per diem storage fees, and Chris advised that his charge would be $120 per day.

12On August 9, 2024, a Belair representative emailed Chris regarding the vehicle. Belair took the position that Royal Auto was not eligible for payment for storage services if it was not “certified with the MTO”. Belair noted that Royal Auto’s “proposed payment” would be

$4,320 for 36 days’ storage plus HST of $561.60 for a total of $4,881.60. Belair offered to settle any claim for storage charges on the basis of no payment, with the vehicle to be removed within two days from receipt of the offer.

13On August 13, 2024, a Belair representative again emailed Chris regarding the vehicle. Belair now took the position that, if Royal Auto refused to release the vehicle with no storage fee, it would pay funds into court to release the vehicle. Belair withdrew its previous offer, and requested information including the location of the vehicle, the towing contract signed by Jese, supporting photos, and any signed work orders.

14Belair’s witness at trial explained that, in considering any demand for payment for vehicle storage, a Belair representative will search an MTO portal and determine whether the provider held a storage license; if it does not hold a license, Belair is unable to offer any storage fee as it can only render payment to licensed storage providers.

15Belair subsequently brought an Application for Initial Certificate under Section 24 of the Repair and Storage Liens Act, and paid the sum of $11,500 into court in order to secure the release of the vehicle. Belair retrieved the vehicle on September 18, 2024, at which time it had been at Royal Auto’s premises for 73 days.

16On October 30, 2024, Royal Auto issued a Plaintiff’s Claim seeking damages in the amount of $9,898.80, plus interest, as the “reasonable and fair value” for the storage of Jesse’s vehicle for a period of 73 days, during which time Royal Auto was unable to use one of the three lifts and hoists in its garage.

17In its Defence, Belair pleads that Royal Auto is not entitled to charge storage fees as it does not hold a Storage Certificate under the TSSEA; and, in the alternative, if it was entitled to charge fees (whether under the TSSEA or some other basis), the fees claimed are excessive and unreasonable.

Analysis

18For the reasons which follow, I find that Royal Auto is prohibited from charging for storage fees without complying with the TSSEA certification requirements; and, as it does not hold the required certificate, it is not entitled to charge or receive payment for storage.

19Until the TSSEA came into force on January 1, 2024, towing and vehicle storage services were regulated through varying bylaws in a number of municipalities. The TSSEA was introduced in order to regulate the province’s towing and vehicle storage industry and address concerns about overcharging, lack of transparency, and inconsistent service standards. To that end, the TSSEA requires (among other things) that anyone offering towing services, operating as a tow operator or tow truck driver, or providing vehicle storage services, must hold the applicable certification.

20It appears that the courts have yet to consider the certification regime established by the TSSEA – and, in particular, whether a repair facility (such as Royal Auto) which does not hold a vehicle storage certificate may nevertheless charge a storage fee in respect of a vehicle brought to its facility and left there for a prolonged period of time. Deciding this question therefore requires a review of the relevant provisions of the TSSEA and related legislation.

21The TSSEA includes the following provisions regarding the storage of vehicles:

In this Act,

“vehicle storage operator” means a person who, directly or indirectly, alone or with others, operates, manages, supervises, runs or directs the offer of or provision of vehicle storage services; (“exploitant de services d’entreposage de véhicules”)

“vehicle storage services” means the receiving and holding of towed motor vehicles and any other prescribed services; (“services d’entreposage de véhicules”)

“vehicle storage yard facility”, subject to the regulations, means a lot, yard or other premises used to provide vehicle storage services. (“installation d’entreposage de véhicules”)

4 No person shall, except under the authority of a vehicle storage certificate and in accordance with this Act and the regulations,

(a) provide or offer to provide vehicle storage services; or

(b) hold themself out as a vehicle storage operator.

32 (1) An amount charged in contravention of or non-compliance with this Act or the regulations is not collectable or payable.

(2) No person shall demand, receive, accept or retain an amount charged or paid in contravention of or non-compliance with this Act or the regulations, and shall provide a refund of such an amount.

(3) Any amount that a person fails to refund under subsection (2) is recoverable by the person who made the payment in a court of competent jurisdiction.

22Regulation 167/23 (the “Regulation”) made under the TSSEA sets out various exemptions to

the provisions of the TSSEA at section6, which provides in relevant part:

(6) The Act does not apply to a motor vehicle that is stored under a self-storage contract for a period of 30 days or more at a facility that rents out or leases space for the self- service storage of motor vehicles.

(7) Any provisions of the Act that apply to vehicle storage services or vehicle storage operators do not apply to a person who never charges a fee for such services.

23The effect of these provisions is twofold: any person holding itself out as a “vehicle storage operator” or providing “vehicle storage services” is prohibited from providing those services except under a vehicle storage certificate; and, any such person is prohibited from charging fees in connection with those services unless they comply with the TSSEA.

24It is my view that Royal Auto does not hold itself out as a vehicle storage operator within the meaning of the TSSEA. As set out above, a “vehicle storage operator” is defined as a person who “operates, manages, supervises, runs or directs the offer of or provision of vehicle storage services”. Royal Auto does not fall within this definition: it operates solely as an auto repair facility, and any vehicle storage is entirely ancillary to those services.

25However, it is my view that Royal Auto did in fact provide “vehicle storage services” with respect to Jesse’s vehicle. As set out above, “vehicle storage services” are defined as “the receiving and holding of towed motor vehicles and any other prescribed services…”. Jesse’s vehicle was towed to Royal Auto’s premises; it therefore received a “towed motor vehicle”. Royal Auto then held Jesse’s vehicle while Chris first assessed the damage, while Jesse waited for Belair to determine whether his vehicle could be repaired, and thereafter until it was retrieved by Belair.

26Royal Auto argues that the definition of “vehicle storage services” does not apply, as it did not receive the vehicle for the purposes of “holding” it but rather for the purpose of repairing it. Royal Auto further argues that, as it does not as a matter of course charge for storage, it is

not subject to the TSSEA and may therefore charge for storage in this case without having to comply with the TSSEA certification requirements.

27Given the clear language of the TSSEA, these arguments cannot succeed. The definition of “vehicle storage services” does not distinguish between “holding” a vehicle for long-term storage and “holding” a vehicle while it is under repair. The definition applies to any person which receives and holds a towed vehicle, regardless of the reasons that that vehicle was towed to and held at the facility.

28The purpose for which a vehicle is stored does have some relevance under the Regulation, and specifically the exemptions set out therein. The TSSEA defines a “vehicle storage yard facility” as “subject to the regulations … a lot, yard or other premises used to provide vehicle storage services.” [emphasis added] The Regulation revises that definition and provides that a “vehicle storage yard facility does not include a lot used by a vehicle repair business, if the storage is ancillary to repairing the motor vehicle and provided at no cost to the vehicle owner or its operator.” [emphasis added] The Regulation further provides, at section 6(7), that TSSEA provisions regarding “vehicle storage services … do not apply to a person who never charges a fee for such services.”

29These further provisions make clear that a person – including an auto repair facility – is only exempted from the certification requirements of the TSSEA to the extent that it stores vehicles solely in the course of repairing them and does not charge for that storage. If the facility seeks to charge for storage – for whatever purpose and in whatever circumstances – it must obtain a certificate and comply with the regime; and, if it does not, it is prohibited from demanding payment for storage.

30Royal Auto also relies upon the provisions of the Repair and Storage Liens Act, R.S.O. 1990,

c.R.25 (“RSLA”), which provides a repairer or storer of an article (defined as tangible personal property other than fixtures) with a possessory lien against the article left for repair or storage: see section 3(1) in the case of a repairer’s lien and section 4(1) in the case of a storer’s lien. Royal Auto argues that it was in fact obligated to maintain possession of Jesse’s vehicle pursuant to section 28, which imposes an obligation upon a lien claimant to take reasonable care of the articles in its possession.

31The RSLA does not assist Royal Auto. Section 4(3.0.1) of the RSLA expressly provides that, where repair or storage includes vehicle storage services regulated under the TSSEA – as is the case here – no lien arises if there was non-compliance with the TSSEA. The effect of this provision is to eliminate an entitlement to lien where vehicle storage services have been provided within the meaning of the TSSEA and the repairer or storer is not certified to provide such services.

32Royal Auto argues that it is unfair to deny it compensation for holding Jessie’s vehicle. It held Jesse’s vehicle with Belair’s knowledge until a Belair representative could perform an inspection. After Belair determined that the vehicle was a total loss, Royal Auto continued to hold Jesse’s vehicle with Belair’s knowledge for approximately two further months until

Belair arranged to retrieve it. Royal Auto was deprived the use of one of its lifts while it held

Jesse’s vehicle, allegedly foregoing $300 per day in revenue during that time.

33Unfair or not, this outcome is clearly mandated by the regime established by the TSSEA. However, it does appear that such a situation would arise only infrequently. Indeed, according to Royal Auto, it has only had occasion to charge a storage fee 5 times in the 21 years it has been in operation. It must also be noted that Royal Auto could have taken steps to have Jesse’s vehicle removed from its premises at an earlier date. Royal Auto was aware that Belair deemed the vehicle a total loss – and therefore unrepairable – by July 15, 2024 or shortly thereafter. However, there is nothing to indicate that Royal Auto requested that either Jesse or Belair remove the vehicle from its premises at any time thereafter.

34It should also be noted that the TSSEA provisions apply only to the receiving and holding of a “towed motor vehicle”. If an owner brings his or her vehicle directly to a garage and leaves it there for an extended period, the garage owner would presumably be able to charge a fee for that extended “storage” as the TSSEA definition of “vehicle storage services” would not appear to apply.

35Given the foregoing, If Royal Auto proposes to charge for storage, regardless of the circumstances, it becomes subject to the TSSEA certification requirements and cannot impose such charges without complying with those requirements. As Royal Auto does not hold a vehicle storage certificate, it cannot demand payment from Belair or any other party.

Conclusion

36Accordingly, Royal Auto’s claim is dismissed. If the parties are unable to agree upon costs, they may deliver submissions of up to 3 pages in length within 30 days of the date of these reasons.

Deputy Judge M. Knapp

Released: April 16, 2026

COURT FILE NO.: SC-24-00010617-0000

DATE: 2026-04-16

ONTARIO SUPERIOR COURT OF JUSTICE

SMALL CLAIMS COURT

BETWEEN:

ROYAL AUTO INC. c/o KRZYSTOF KIERNICKI / CHRIS KIERNICKI

Plaintiff

– and –

BELAIR DIRECT INSURANCE COMPANY

Defendant

REASONS FOR JUDGMENT

Deputy Judge M. Knapp

Released: April 16, 2026

Royal Auto Inc. (Krzystof) v Belair Direct Insurance Company, 2026 CanLII 48294 (ON SCSM)

Case Summary

Overview

Facts

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Analysis

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Conclusion

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Royal Auto Inc. (Krzystof) v Belair Direct Insurance Company, 2026 CanLII 48294 (ON SCSM)

Case Summary

Overview

Facts

Facts

Analysis

Analysis

Conclusion

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