A recent Ontario Superior Court decision has held that provincial legislation, Repair and Storage Liens Act applies to tow companies operating on Reserve land.
More specifically, section 24 of the Repair and Storage Liens Act provides a mechanism for owners of vehicles to get their vehicles back when there is a dispute over tow, storage and other fees unilaterally charged by tow companies. The Repair and Storage Liens Act prevents companies from holding vehicles hostage until payment.
When your vehicle is stolen, you may submit a claim to your insurer. Your insurer settles your claim and becomes the owner of the vehicle. Often stolen vehicles are abandoned and recovered by the Police. In the present case, vehicles were recovered in or near Reserve land. Unknown to the owner or insurer, the Six Nations Police instruct tow companies to tow the theft recovered motor vehicles. The problem of payment for these services arises because there is no agreement on the fees to be charged by the tow companies. Some areas of the province regulate tow and storage fees and others do not. There is no regulation on Reserve land.
The owner receives notification that the vehicle is recovered and contacts the tow company to retrieve the vehicle. The tow company then demands payment of its fees and refuses to release the vehicle without full payment. The tow fee may be more than triple the tow fee regulated in other areas of the Province of Ontario. Intact Insurance Company exercised its rights under section 24 of the Repair and Storage Liens Act to dispute the fees as being excessive. Money was paid into court as security for numerous vehicles, but the tow companies refused to release the vehicles arguing that provincial law does not apply to Reserve land and they continued charging ongoing daily storage fees.
Justice Harper made reference to one tow company claiming $19,260.00 for outstanding tow fees and ongoing unpaid storage costs of $322,320.00 as of November 24, 2015 for vehicles in storage that the tow companies refuse to release.
Three tow companies owned by Band Members of the Six Nations of the Grand River Indian Reserve, Brant County, operate within the boundaries of the Six Nations. The tow companies filed an application to question the constitutional applicability of sections 23 and 24 of the Repair and Storage Liens Act that relate to section 89 of the Indian Act Sections 23 and 24 of the Repair and Storage Liens Act are the only sections that permit owners and insurers to dispute fees and get their vehicle back. The tow companies argued that they have a property interest in the vehicle and this interest becomes an asset owned by an Indian or a Band located on a reserve. Section 89 of the Indian Act prevents the owner or insurer from exercising its rights under the Repair and Storage Liens Act to get the vehicle back because the vehicle is now the “real and personal property of an Indian or a Band”.
Intact Insurance Company was represented by Lisa M. Carr of Carr Law Professional Corporation. Intact Insurance Company argued that the Repair and Storage Liens Act is a provincial law of general application and applies to companies operating on Federal land.
Justice Harper followed the arguments of Intact Insurance Company and ordered release of all vehicles. Reserve tow companies are subject to the same provincial laws when providing tow, storage and repair services for articles/vehicles owned by non-Indians.
Citation: Taylor’s Towing, JR Towing and Salvage and Mohawk Towing v. Intact Insurance, 2016 ONSC 7454
The decision of Justice Harper is not yet reported. Check back for link in near future.