Court rejects repairer’s $1.9M truck lien claim

Royal Bank of Canada v. Trans Emerge Transport Inc., 2026 ONSC 3550
What must a repairer prove to enforce a RSLA lien in a receivership?

Summary: The Ontario Superior Court rejected Hub Truck Centre’s asserted repair and storage liens over trucks formerly operated by Trans Emerge Transport, holding that Hub failed to prove it was either a “repairer” or “storer” entitled to lien protection under the Repair and Storage Liens Act. The decision arose in TET’s receivership, where msi Spergel Inc., as receiver, and Daimler Truck Financial Services challenged Hub’s claimed liens over leased equipment, including more than $432,000 in repair liens and $947,000 in storage liens asserted against Daimler vehicles. Justice Dunphy found serious evidentiary problems with Hub’s claims: inspections cast doubt on whether the claimed work had been performed, allegedly installed parts were missing, invoices had not been shown to have been delivered, and Hub failed to establish any agreement or “understanding” that TET would pay for the alleged repairs or storage. The Court also emphasized that Hub could not claim storage charges for the period after the receivership order required the trucks to be delivered to the receiver. The ruling is a useful reminder for secured creditors, receivers and equipment lessors that RSLA lien claims in an insolvency proceeding require vehicle-specific proof of the work or storage, a genuine payment arrangement, and compliance with court orders, not merely invoices generated by a related party.

msi Spergel Inc., the court-appointed Receiver of Trans Emerge Transport Inc. (“TET”), and Daimler Truck Financial Services Canada Corporation (“Daimler”), an equipment lessor of the debtor, sought declarations that the respondent, 2352628 Ontario Inc. o/a “Hub Truck Centre” (“Hub”), did not have the benefit of claimed liens under the Repair and Storage Liens Act on certain trucks formerly operated by the debtor, TET. The issue to be determined was whether any of the RSLA liens claimed by Hub were valid and enforceable liens at the time of the commencement of the receivership when Hub was ordered to deliver possession of the vehicles in question to the Receiver or at the time when Hub eventually complied with the Court’s order and surrendered possession of them.

TET had a fleet of 125 vehicles, 150 drivers and specialized in heavy haul and refrigerated transportation services across North America. On November 17, 2023 the controlling mind of TET, Mr. Binapal, entered into a letter of intent (the “LOI”) with a newly-incorporated company, 1000711945 Ontario Inc. (“1000”), acting as bare trustee to purchase all of the shares of TET for nominal consideration. Prior to the appointment of the Receiver, TET appeared to have ceased independent operations and transferred its fleet and operations to be managed by the principal of 1000, Mr. Mander, or companies controlled by him. Mr. Mander was also the directing mind of Hub.

As a trucking company, TET’s financing included a significant number of equipment lessors. Daimler had 58 units under lease to TET, of which 38 were the subject of liens claimed by Hub. Of those Daimler units, 24 were returned to the Receiver, and one remained unsold. Five others were repossessed directly by Daimler and nine remained unaccounted for. As against the Daimler vehicles formerly in its possession, Hub asserted repair liens of $432,207.60 and storage liens of a further $947,166.00. Hub also asserted repair claims totalling $559,906.38 in respect of units ultimately released to the Receiver and $1,224,244 in storage charges in respect of the units delivered to the Receiver for sale and auction.

The Receiver argued that Hub was neither a “storer” nor a “repairer” of the subject units over which it was asserting lien claims. The units inspected by the Receiver cast considerable doubt on whether the claimed work had been done at all in the majority of cases. New parts allegedly installed were simply not found. In many cases there was no sign of any work at all corresponding to the claims on the work orders or invoices.

Under s. 1(1) of the RSLA, a “repairer” is “a person who makes a repair on the understanding that the person will be paid for the repair”. For there to be “an understanding” there must be an agreement of some kind that encompasses some of the formal elements of a contract. Even if the parties have not agreed how much will be paid for a repair, they must have agreed that a repair will be done and that payment for the repair will be made.

It is axiomatic that one cannot make an agreement with oneself. The extensive degree of operational control over the operations of TET exercised by Mr. Mander and his companies over TET from and after the LOI cast considerable doubt that any “understanding” emerging in those circumstances would be capable of meeting this statutory definition. Mr. Mander’s evidence did not satisfy the requirement for “an understanding” that payment would follow. There was no evidence of the duration of the understanding, particularly in light of the LOI then being negotiated, which contemplated only nominal consideration and Mr. Mander’s expressed hope that it would enable his own companies to expand their business through the LOI. There was no indication of which vehicles were the subject of that alleged oral agreement and for what period of time or whether there was any expectation of payment for the repairs themselves as opposed to an expectation of absorbing the entire business of TET (for which there was evidence).

It was Hub’s burden to prove that it qualified as a “repairer” for each and every repair for which it claimed a lien, and Hub failed to discharge that burden. Hub failed to establish what repairs were actually performed. There being no evidence whatsoever of any agreement as to the price to be charged for repairs, the only amount for which a lien might be alleged to arise was the “fair value of the repair, determined in accordance with any applicable regulation” in accordance with s. 3(1) of the RSLA. The Court concluded that Hub was not a “repairer” as defined by the RSLA and could assert no lien under s. 3 of the RSLA.

Under s. 1(1) of the RSLA, a “storer” is “a person who receives an article for storage or storage and repair on the understanding that the person will be paid for the storage or storage and repair, as the case may be”. Similarly, there was no evidence that any of the invoices were ever delivered to TET, and still less that there was ever any kind of understanding regarding payment for storage. From and after January 22, 2024 (being the date of the appointment of the Receiver), all of the subject trucks had been ordered to be handed over to the Receiver and Hub could not claim a lien for storage charges incurred while it defied a court order. Hub was not a storer and established no basis for a claim to any storage lien.

Judge: Justice Dunphy

Professionals involved:

• Tim Hogan and Thomas Masterson of Harrison Pensa for the Receiver msi Spergel Inc.

• Fraser MacKinnon Blair, Sara-Ann Wilson and Elaine Gray of Dentons for Daimler Truck Financial Services Canada Inc.

• Patrick Dimonte, for the Respondent Trans Emerge Transport Inc.

• Mark Klaiman of Spetter Zeitz Klaiman for 3242628 Ontario HUB