Friday, November 25th, 2016

By Clarence Lui

I am often asked by our astute clients whether they should apply under the two procedures provided in section 23 or 24 of the Ontario Repair and Storage Liens Act, on disputes with repair shops and tow operators over repair, tow and storage charges.

In most cases, a section 24 application is the preferable method. It provides an expeditious process of securing a release of the vehicle, especially since storage charges may continue to accrue while the vehicle remains at the shop.

As a precondition to commencing a section 24 application, the Act requires the applicant – vehicle owners, usually insurers on their behalves – to deposit the amount in dispute into court.  The amount may, or may not, include an offer to resolve the dispute.  Section 24 stipulates deadlines by which the respondent shop must release the vehicle and dispute the sum paid into court.  That section also permits removal of the vehicle through issuance, and enforcement, of a writ of seizure.

There is no mechanism for obtaining release of the vehicle under section 23. Where release of the article is not an issue if, for example, the vehicle has been sold, section 23 is the process to follow for a determination of the lien dispute.

It is important to note of a distinction in the two procedures: section 23 may be used by “any person” that includes the lien claimant (e.g. the repair shop), whereas section 24 is available initially only to the “owner or other person lawfully entitled to the article”.

Courts have held that the two procedures are mutually exclusive. Section 23(2) of the RSLA specifically prohibits commencement of a section 23 application, where an application has been made under section 24 for determination on “the amount of a lien or the rights of any person to a lien”.  This prohibition applies to most cases in which our clients are involved.

DISCLAIMER

This blog entry has been placed on our website to inform readers in a general way of the authors’ view of the law at the time of its presentation. It is not intended as legal advice and no reliance may be placed on its contents. Some principles of law or procedure may have changed and may no longer be applicable since its publication. The authors and Monaghan Reain Lui Taylor LLP disclaim any liability arising from reliance on any part of this blog entry.

Category: Update.