



COURT OF APPEAL FOR ONTARIO

CITATION: Eden Agency Inc. v. Palinkas, 2017 ONCA 421

DATE: 20170524

DOCKET: C62934

Lauwers, Hourigan and Benotto JJ.A.

BETWEEN

Eden Agency Inc.

Plaintiff (Appellant)

and

Michael W. Palinkas

Defendant (Respondent)

Barry L. Yellin, for the appellant

Marc A. Munro, for the respondent

Heard: May 16, 2017

On appeal from the judgment of Justice
Jane A. Milanetti
of the Superior Court of Justice,
    dated
November 16, 2015
.

REASONS FOR DECISION

[1]

The respondent, Palinkas, stored food processing
    equipment owned by the appellant, Eden Agency Inc., and claimed a storage lien
    under the
Repair and Storage Liens Act
, R.S.O
    1990, c. R.25.

[2]

The respondent retained the equipment in breach
    of his obligation under s. 17 of the
Act
to sell
    it after receiving a letter from the appellant dated May 30, 2012. Under s. 21
    of the
Act
, the effect of his failure to
    comply was that the respondent became liable to pay damages. The trial judge
    ordered him to pay damages to the appellant in the amount of $129,500 USD.

[3]

The trial judge reduced the damages to be paid
    by giving the respondent a credit of $27,900 for storage fees calculated at
    $900 a month for 31 months, from January 1, 2010 to July 31, 2012.

[4]

The appellants appeal is limited to whether
    credit should have been given to the respondent and to the amount.

[5]

The appellant makes two arguments. First, the
    respondent is not entitled to a credit because he did not claim a set-off in the
    statement of defence and did not counterclaim for the credit.

[6]

We reject this argument. As is noted in the
Canadian
    Encyclopedic Digest
(Ont. 4th), vol. 37, title 94 at § 3:

A legal lien is a defence rather than a cause
    of action, although it will usually relate to a cause of action. Generally
    speaking, such liens are not subject to limitations periods, since under the law
    of Ontario limitation periods generally tend only to bar recourse to judicial
    remedies, rather than to extinguish rights. However, in the case of some
    statutory liens, the lien expires at the end of a relevant limitation period
    and ceases to exist as a right. [Footnotes omitted.]

It was open to the trial judge to reduce
    the measure of damages by the value of the amount of the lien:
Debor
    Contracting Co. v. Core Rentals Ltd.
, (1982), 40 O.R.
    (2d) 24, 1982 CarswellOnt 3564 (H.C.), at para. 40 [
per
Pennell J.].

[7]

Second, the appellant argues that there was no
    evidence to support the amount of the credit for storage fees.

[8]

We do not give effect to this argument. There
    was evidence before the trial court that the consignor of the equipment (not
    the appellant) and the respondent had agreed on a storage fee of $900 per
    month. This was known to the appellants principal who acknowledged by letter
    of May 30, 2012 to pay at that rate for a short period of time. The
Act
does not require the relevant agreement to be between the owner of
    an article and the storer. Further, there is no evidence that the amount
    charged was unreasonable. The trial judge properly exercised her authority
    under s. 4 of the
Act

by providing for a
    credit.

[9]

The appellant also submits that the time period
    for the credit should be no longer than the two year limitation period under
    the
Limitations Act, 2002
, S.O. 2002, c. 24,
    Sched. B. This would reduce the credit from $27,900 to $21,600. However, as noted
    above, the limitations period does not generally run against possessory liens.
    The appellant has offered no contrary authority to us.

[10]

The appeal is dismissed, with costs payable by the
    appellant to the respondent in the amount of $6,500.

P.
    Lauwers J.A.

C.W.
    Hourigan J.A.

M.L.
    Benotto J.A.


