



COURT OF APPEAL FOR ONTARIO

CITATION: Taylor's Towing v. Intact Insurance Company, 2017
    ONCA 992

DATE: 20171215

DOCKET: C63943

Hourigan and Brown JJ.A. and Himel J. (
ad hoc
)

BETWEEN

Taylors
    Towing, JR Towing and Salvage and

Mohawk
    Towing

Appellants

and

Intact Insurance Company

Respondent

Ian Gerald Smits, for the appellants

Lisa Carr, for the respondent

Heard and released orally: December 13, 2017:

On appeal from the judgment of Justice R. John Harper of
    the Superior Court of Justice, dated November 30, 2016.

REASONS FOR DECISION

[1]

This appeal arises from an
    application under the
Repair and Storage Liens Act
, R.S.O. 1990, C. R.25 (
RSLA
). The primary issue is whether s. 89(1) of the
Indian
    Act
R.S.C., 1985, c. I-5 prevents the
    respondent from exercising its rights under the
RSLA
.

[2]

The background facts may be
    briefly stated as follows. Certain vehicles owned by Ontario residents and
    insured by the respondent were involved in accidents or stolen.  After the
    accidents or thefts, ownership transferred to the respondent.

[3]

The vehicles were towed and stored
    by the appellants, who are towing companies owned by members of the Six Nations
    of Grand River Indian Reserve, Brant County. All of the businesses are located
    within the boundaries of Six Nations. Most of the vehicles were towed and stored
    at the request of Six Nations police.

[4]

There was a dispute among the
    parties regarding towing and storage fees. The respondent brought applications
    under the
RSLA

in Small Claims Court to permit it to retrieve the
    vehicles in exchange for payment of money into court to the credit of any
    actions by the appellants for their fees. The appellants refused to release the
    vehicles. They brought an application seeking declaratory relief to the effect
    that ss. 23 and 24 of the
RSLA
are
    not available to the respondent. They argued
that they acquired a property interest in the vehicles and pursuant to s.
    89(1) of the
Indian Act

the vehicles are exempt from execution or seizure.
    That section reads as follows:

89(1)
Subject to this Act, the real and
    personal property of an Indian or a band situated on a reserve is not subject
    to charge, pledge, mortgage, attachment, levy, seizure, distress or execution
    in favour or at the instance of any person other than an Indian or a band.

[5]

The application judge held that
    the
RSLA

is a provincial law of general application, and
    dismissed the appellants application for exemption. He ordered the appellants
    to immediately release the vehicles to the respondent.

[6]

On appeal, the appellants submit
    that the application judge erred in his interpretation of the interaction of
    the
RSLA
and the
Indian
    Act
. They argue that they have a statutory
    lien on the vehicles as a result of s. 4 of the
RSLA
and/or s. 170(15) of the
Highway Traffic
    Act
, R.S.O. 1990, C.H.8, and/or that their
    storage and preservation of the vehicles was sufficient to establish a common
    law lien. In any case, they submit that personal property in s. 89(1) of the
Indian
    Act
ought to be defined broadly to include
    all choses in action and evidence of debt, including liens. Thus, their
    position is that where assets sought to be attached belong to an Indian or a Band,
    and when the assets are located on a reserve, the property cannot be attached
    by non-Indian parties.

[7]

This appeal raises a number of
    issues regarding the nature of personal property protected by s. 89(1) of the
Indian
    Act
.  However, we are able to decide the
    case on the narrow question of whether s. 89(1) applies to the respondent as a
    non-creditor. In our view, it does not and accordingly the appeal must fail.

[8]

We accept the respondents
    submission that s. 89(1) of the
Indian Act
only protects against seizure from creditors or the
    Crown. In
Mohawk Council of Akwesane v. Toews
, 2012 FC 1442, Justice Near explained at para. 34:

The Supreme Court of Canada has held on more than one occasion
    that the purpose of the exemptions in [s. 89] was to preserve the entitlements
    of Indians to their reserve lands and to ensure that the use of their property
    on their reserve lands was not eroded by the ability of governments to tax, or
    creditors to seize. (Citing
Bastien Estate v. Canada,
2011 SCC 38,
    [2011] 2 SCR 710 at para. 23;
McDiarmid Lumber Ltd. v. Gods Lake First
    Nation
, 2006 SCC 58, [2006] 2 SCR 846 at para. 27;
Williams v. Canada
,
    [1992] 1 SCR 877.).

[9]

In this case, the respondent is a
    debtor not a creditor. It follows that the appellants cannot claim the
    protection of s. 89(1) of the
Indian Act
.

[10]

In reaching this conclusion, we
    reject the submission of the appellants that
Benedict v. Ohwistha
    Capital Corporation
, 2014 ONCA 80, stands
    for the proposition that s. 89(1) protections extend beyond seizure from the
    Crown or creditors. In that case, a creditor loaned $125,000 to an Indian. The
    parties tried to structure the loan to circumvent s. 89(1) protections by
    complying with s. 89(2). This court held that the transaction was effectively
    a sham, and so s. 89(1) applied. The lender was a creditor caught by s. 89(1).
    That case does not depart from the line of Supreme Court cases cited by the
    respondent.

[11]

The appeal is dismissed. The
    appellants Taylors Towing and Mohawk Towing, shall pay costs of the appeal to
    the respondent in the amount of $4,500, all inclusive.

C.W. Hourigan J.A.

David Brown J.A.

Himel J.


