Under Section 23 of the RSLA, any person may apply to the court to resolve disputes relating to:

• Seizure of an article under Part II of the Act or any other right of seizure.

• Sale of the article under Part III.

• Distribution of sale proceeds among competing parties.

• Validity and amount of a lien, including challenges to excessive or improper claims.

• Any other dispute arising from the application of the RSLA.

Courts have broad discretion to make orders to enforce the rights of parties, offering a flexible tool for resolving lien-related conflicts.

1. Lienholders

• Confirm the validity and enforceability of their lien.

• Secure judicial approval before selling or disposing of goods.

• Ensure proceeds from a sale are distributed fairly.

2. Creditors

• Resolve disputes regarding priority and entitlement to sale proceeds.

• Protect interests where multiple parties are claiming against the same goods.

3. Owners

• Challenge the validity or amount of a lien.

• Seek a discharge of improperly registered liens.

• Prevent unfair seizure or sale of their property.

• Applications may be brought in a court of appropriate monetary jurisdiction, including the Ontario Small Claims Court for disputes up to $35,000.

• The prescribed Form is used to commence an application, setting out the relief sought and supporting grounds.

Courts may order the payment of funds into court to secure proceeds pending determination of disputes.

Section 23 interacts with other provisions of the RSLA, including:

• Section 24 – permitting owners to regain possession by paying the lien amount into court.

• Section 28 – imposing duties of reasonable care on lien claimants with goods in their custody.

Our approach to Section 23 applications is informed by leading Ontario decisions, including:

Hamilton v. 1262108 Ontario Inc. (Metrowide Auto Centre) – confirmed that any person may apply under s. 23, providing broad access to the courts.

Castle Auto Collision v. McEachern – clarified jurisdiction and procedural issues for Small Claims Court applications.

Newroads Automotive Group v. F & P Group Ltd. – confirmed use of prescribed forms and the court’s discretion in lien disputes.

Bank of Montreal v. Arros Landscape Contractors Inc. – applied s. 23 to disputes over distribution of proceeds.