The Repairers and Storers Lien Act is the best way to ensure that a marina or sub-trade is paid for an overdue account. Compared to almost any other way to collect monies owing, the Repairers and Storers Lien Act (RSLA) can be the quickest, cheapest and easiest way of taking care of overdue accounts. However, the way in which the RSLA works is complex, as there are strict notice and timing requirements, and there are a number of pitfalls and problems that will trip-up lien claimants. It is for these reasons that we are supplying you with information. We are also recommending that you contact DEACON TAWS so that we might assist you. We will ensure that the Repairers and Storers Lien Act is followed and that you be in a position to collect your accounts and recover your legal fees as soon as possible. At the same time we will ensure the highest possible protection from legal claims that may be made against you.
This article should not be interpreted as being a complete guide to the Act. It is our strong legal opinion that steps taken under the Repairers and Storers Lien Act should be done with a lawyer and we would be pleased to assist you.
Q: WHAT IS THE REPAIRERS AND STORERS LIEN ACT?
A: It is a law of the Province of Ontario that allows for the retention and lien against an article until payment of a debt.
Q: WHO CAN MAKE A CLAIM UNDER THE ACT?
A: Someone who has repaired (meaning invested labour, material, transportation, towing, salvage) or storage (the possession and/or preservation of the article).
Q: WHAT CAN HAVE A LIEN AGAINST IT?
A: Any personal property (not real estate) including boats, motors, vehicles, equipment, furniture, and just about anything else that is not land or a house or a building.
Q: HOW MUCH CAN I CLAIM UNDER THE ACT?
A: There are three possibilities, and they are:
Q: WHEN DOES MY LIEN START?
A: As soon as the repair is started and/or as soon as storage is started as long as you are receiving the article for the purpose of repair and/or storage.
Q: WHEN COULD I SELL SOMETHING UNDER THE ACT?
A: This is a very complex question that really depends upon the facts of each case. It is for this reason that we strongly advise people to consult us so that we might do this for you and ensure compliance with the RSLA. The absolute earliest you could sell an article is 60 days following the day that the amount becomes due, or, if there was no due date, 60 days after the repair was completed. BUT before you can sell, there are a number of steps that must be taken to ensure that you have the authority of the Act.
Q: WHO ELSE CAN HAVE A REPAIRERS AND STORERS LIEN?
A: If somebody repairs the same article while it is in your possession, they also have a (possessory) lien until the time that the repair is completed or "abandoned". It should be noted that somebody who has a lien like this has the right to remove the article from your premises, which clearly could create some conflict. Anyone else who has repaired or stored the article, and remains unpaid, may also have a lien.
Q: IF I STORE THE ARTICLE, HOW MUCH IS MY LIEN FOR?
A: The storer has a lien for an amount equal to the amount agreed for storage or the "fair value" of storage, insurance, transportation, labour, weighing, packing, and other expenses related to storage.
Q: IF I HAVE A LIEN, WHAT DOES THIS MEAN I CAN DO?
A: A lien under the Act gives you many rights, the most important is that you are allowed to retain possession of the article until paid.
Q: WHAT HAPPENS IF SOMEBODY JUST LEAVES THEIR "ARTICLES" WITH ME AND THERE HAS NEVER BEEN ANY AGREEMENT OR UNDERSTANDING OR CONTRACT OR WORK ORDER OR STORAGE AGREEMENT WITH US? FOR EXAMPLE, WHAT IF SOMEBODY JUST TIED UP THEIR BOAT AT OUR DOCK, SAID THEY WOULD BE BACK AND NEVER RETURN? OR WHAT IF THEY DROPPED OFF A GENERATOR OR SOME OTHER MACHINERY, RECEIVED OUR ESTIMATE ON REPAIRS AND THEN SAID "I'LL THINK ABOUT IT" AND NEVER GOT BACK TO US FOR A YEAR?
A: Because there is no agreement on repair or storage, your situation is a little unusual. You are not technically a "repairer" or "a storer". However, if you fulfil different legal requirements and notices, there may be a lien. In this case, as long as there was compliance with the Act, you would be able to be paid your "commercially reasonable expenses" to store, preserve, prepare for sale, insure, and any other reasonable charges, in dealing with the article. You should consult a lawyer.
Q: IF I HAVE A LIEN, WHAT ARE MY RESPONSIBILITIES?
A: You have a responsibility to the owner, any party who has registered a security interest under the Personal Property Security Act (PPSA), and anyone who has an interest in the article. Note that owner does not mean only the registered owner of the article, but potentially anybody who has acted like an owner, for example, the spouse or family member of the registered owner. You are also responsible to anyone else who has claimed a lien against the article and they may have done this by registering that lien under the PPSA.
Q: HOW DO I GIVE SOMEBODY NOTICE OF MY CLAIM?
A: The best way to do this is by registering your lien under the Personal Property Security Act. This is a somewhat technical process and we advise that you see a lawyer. There are other ways of giving your notice in addition to the registration.
Q: WHAT HAPPENS IF I WORK WITH A LAW FIRM, WHERE NOTICE IS GIVEN, AND I AM STILL NOT PAID?
A: So long as the various time deadlines are complied with, you will be in a position to dispose of the article.
Q: WHAT DOES "DISPOSE" REALLY MEAN?
A: A lien claimant may dispose of an article by selling it, retaining it, or donating it to charity.
Q: WHAT IF THE OWNER OF THE ARTICLE WANTS TO USE IT FOR A SHORT PERIOD OF TIME?
A: If the article lawfully comes into the possession of the owner or anyone who claims an interest in the article (for example banks, family members, etc.), then you have lost your possessory lien.
Q: WHAT IS A "POSSESSORY LIEN"?
A: A Possessory Lien gives you priority over anyone (including the owner, banks and any other lien claimants) and enables you to retain the article until you are paid.
Q: WHAT DOES IT MEAN TO ME IF I LOSE MY POSSESSORY LIEN? HAVE I LOST EVERYTHING?
A: You may not have lost everything, but you have lost your right to refuse an owner access to the article. If the amount of the debt owed to you has been acknowledged by the owner in writing and if the owner has also acknowledged in writing the fact that you will have a non-possessory lien under the RSLA, then you still have some rights in priority to others.
Q: IF I LOSE MY POSSESSORY LIEN, HOW CAN I GET IT BACK?
A: You can't.
Q: WHAT IF THE OWNER JUST SHOWS UP AND TAKES THE ARTICLE WITHOUT ASKING ME?
A: You've lost your possessory lien and your non-possessory lien.
Q: YOU MEAN THAT SOMEBODY CAN JUST SHOW UP, TAKE SOMETHING AND NOT PAY FOR IT?
A: Yes. You still have the right to sue for your account, but you have lost your ability to claim a priority ahead of others, unless you have a "non-possessory lien".
Q: WHAT IF THE ARTICLE IS STORED ON MY PROPERTY AND THE OWNER BREAKS IN AND TAKES IT?
A: This would not be "lawful" and therefore an illegal act would not be recognized under the Repairers and Storers Lien Act and your "possessory lien" would continue. The practical answer is, though, that you will still have to chase the debtor and still have to chase the article, although it does mean that once you have tracked the person and/or the article down, that you will still have a priority over anybody else that claims a debt over that article.
Q: WHEN DOES A NON-POSSESSORY LIEN BEGIN?
A: It begins when you give up possession of the article.
Q: I'M GETTING CONFUSED. WHAT ARE THE PRIORITIES, WHO'S FIRST IN LINE AND WHO'S LAST IN LINE?
A: The priorities are as follows:
Q: DO I LOSE MY NON-POSSESSORY LIEN IF I AGREE TO EXTEND CREDIT OR TAKE PAYMENT OVER TIME?
A: No.
Q: HOW DO I KEEP AND PROTECT A NON-POSSESSORY LIEN?
A: You must get a signed acknowledgement of the debt and an acknowledgement that you retain a non-possessory lien. You should have this registered under the PPSA.
Q: WHAT IF THERE IS A DISPUTE ABOUT HOW MUCH IS OWING?
A: Then, simply have the person acknowledge that they do owe you a debt and that you have a non-possessory lien and then this would give you a non-possessory lien. You don't have to agree on an amount, but there has to be an acknowledgement that there is some kind of a debt owing and that the non-possessory lien continues. But ask yourself whether you really want to lose your possessory lien by letting the article go.
Q: WHAT HAPPENS IF I DON'T REGISTER MY LIEN?
A: It means that anyone who honestly has no idea of the debt and buys that article from the debtor takes it free and clear of your lien. The result is you have lost your security, cannot enforce the debt against that article, and are left to sue the debtor personally only. Also, anyone repairing or storing the article is ahead of you in priority.
Q: WHAT IF I DO WORK ON THE ARTICLE, IT LEAVES MY POSSESSION, AND THEN SOMEBODY ELSE DOES WORK ON THE ARTICLE? WHO HAS THE FIRST PRIORITY?
A: Not you. The person most recently doing work on the article has a priority over you, unless you have registered your lien before they did the work.
Q: CAN I CLAIM A LIEN ON MORE THAN ONE ARTICLE?
A: Yes. For example, if you worked on a boat, a boat top, a generator, rigging, lines, upholstery and furnishings, dock boxes, dock parts, trailers, and any other "article" or thing.
Q: IF I HAVE A NON-POSSESSORY LIEN, CAN I GO AND GET THE ARTICLE?
A: No. You must do a number of things to comply with the Repairers and Storers Lien Act (the list is rather long and technical, so we won't go into it here), but once you have done that you have two different options, the first is to have the Sheriff go and seize the article and the second is to have a Bailiff go and seize the article.
Q: IS THERE ANYTHING THAT A SHERIFF OR BAILIFF CANNOT DO TO SEIZE THE ARTICLE?
A: They can't break the law and they also cannot seize the article if it is in the possession of someone else who claims a possessory lien under the Act.
Q: COULD I BUY THE ARTICLE?
A: Yes. A lien claimant can purchase an article, but only at a public sale. Although this is not well defined, a public sale could include public auction or other widely advertised sale, as long as it is "commercially reasonable".
Q: ONCE AN ARTICLE IS SOLD, WHAT'S DONE WITH THE MONEY?
A: The dollars are paid out as follows:
Q: BESIDES SELLING AN ARTICLE, WHAT OPTIONS DO I HAVE?
A: You can elect to retain the article. However, if you retain the article, you are deemed to have chosen to take the article in full satisfaction of the debt (and cannot sue the debtor for the unpaid balance). If you do not elect to retain the article, you may sell the article, then you are still able to proceed against the debtor for any balance that is unpaid after sale proceeds have been used up.
Q: WHAT IF I GO THROUGH THE PROCESS OF RETAINING THE ARTICLE AND THE VALUE OF THE ARTICLE IS WORTH A LOT MORE THAN MY LIEN?
A: This could be a difficult situation, because the Act says that you are entitled to keep the article, free and clear from any claims by the owner. However, it also allows the owner at some point in the future to apply to the Court to interpret the sale as to whether it is commercially reasonable. Therefore, the answer here is not absolutely clear.
Q: IS IT EASY TO GO THROUGH THE PROCESS TO RETAIN AN ARTICLE?
A: Not really, the steps are numerous and technical and although they are similar to the process of selling an article, there are additional steps involved and we recommend hiring a lawyer to do this.
Q: WHAT OTHER OPTIONS DO I HAVE BESIDES SELLING OR RETAINING AN ARTICLE?
A: If you retain an article for 12 months after you've gained the right to sell it, you could donate it to charity.
Q: WHAT WOULD HAPPEN IF I TRIED TO DO A LIEN MYSELF AND IT DIDN'T WORK OUT OR I DID IT INCORRECTLY?
A: If anyone else suffers damages or is in any way harmed by an improper Repairers and Storers Lien, then they could sue for an amount of $200 or their actual damages, whichever is greater. A Court would decide on what is to be done.
Q: WHAT WOULD HAPPEN IF I HAVE AN ARTICLE AND HAVEN'T YET SOLD IT, OR RETAINED IT, OR DONATED IT TO CHARITY, AND AN OWNER OR A PARTY TO WHOM I'VE GIVEN NOTICE WANTS TO PAY OFF THE LIEN?
A: Then they are entitled to do so, and once that has been done, so long as your lien and all costs have been paid, then your lien will end and that party may have the power and right to take the article.
Q: WHAT HAPPENS IF THE POLICE SHOW UP AND THE OWNER PROVIDES PROOF OF OWNERSHIP AND THE POLICE THREATEN TO CHARGE ME WITH THEFT?
A: This has happened to a number of our clients and they are put in a very difficult position. However, the law is clear that you have every right to hold onto the property. Because you have that right under the Repairers and Storers Lien Act, this would be a good and complete defence to any charge that would be brought against you. Of course, as in any situation, once the police become involved, it is prudent to immediately contact a lawyer before taking further steps. The proper route is for the owner or anyone else claiming an interest in the article to apply to the Court to have your lien and your claim interpreted. The proper course of action is not to take the article away from the possessory lien claimant.
Q: WHAT IF I HAVE STORED AN ARTICLE AT VARIOUS POINTS IN TIME AND HAVE REPAIRED IT ON A NUMBER OF OCCASIONS?
A: A separate lien is created each time an article is repaired or stored and repaired. If the article leaves your possession after each repair, or after each period of storage, then you have lost your possessory lien. Again, unless you have received an acknowledgement of debt and an acknowledgement of your non-possessory lien, you will also lose your non-possessory lien (but you could still sue to recover the debt).
Q: WHILE I AM HOLDING ONTO AN ARTICLE, WHAT AM I SUPPOSED TO DO WITH IT?
A: You are to use reasonable care in the preservation of that article, keep the article identifiable, and you are entitled to recover "the commercially reasonable expenses" for the custody, preservation and preparation for sale, including the cost of insurance, payment of taxes, other charges and legal fees.
Q: DOES MY LIEN INCLUDE INTEREST ON ANY AMOUNTS OWING?
A: This is a difficult answer to make, but in most cases, no. It is a highly technical area and a lawyer should be consulted.
Q: WHILE I AM HOLDING ONTO THE ARTICLE, CAN I USE IT?
A: Yes, but only to preserve its value, or to make reasonable demonstration of it for the purposes of sale, or in the direction of any Court Order, or under an agreement with the owner.
Q: WHAT DOES A SHERIFF OR A BAILIFF DO?
A: With the sufficient legal authority, a Sheriff or a Bailiff may use reasonable force to enter a premises and to seize an article. They are also legally able to use reasonable force to carry out their objectives. It should be noted that they cannot enter a home or a dwelling, unless they have a court Order.
Q: WHAT IF I HAVE ANY OTHER QUESTIONS ABOUT THE REPAIRERS AND STORERS LIEN ACT?
A: If you are in the Midland/Penetanguishene/Georgian Bay area, Deacon Taws Law Firm will be pleased to assist. Otherwise, we would suggest that you contact a Solicitor in your area
| The foregoing articles are meant for informational purposes only and are not to be taken as legal advice. In the case of any questions, issues or needs arising from the above please contact us at Admin@deacontaws.com, Phone: (705)526-3791 or Fax: (705)526-2688 |