Creditors not Qualifying as Repairers for Lien Purposes

December 3rd, 2015 by

By Michelle Stephenson

Affirming a lower court decision, the Ontario Court of Appeal in SG Air Leasing Limited v. Inchatsavane Company (Proprietary) Limited recently addressed who qualifies as a “repairer” under the Repair and Storage Liens Act.

In short, the Act gives a party who has made repairs on an article and does not get paid the right to a possessory or non-possessory lien against that article.

In SG Air, the appellant, SG, asserted a non-possessory lien over an aircraft, owned by the respondent, as a repairer on the basis that it had loaned money to two companies who repaired the aircraft. SG sought this remedy under the Act when those loans were not repaid.

The Court of Appeal confirmed that the status of “repairer” does not extend to parties who lend money to repairers, even for the purpose of the repairs in question, as was the case here.

A repairer is defined as the person bestowing skill, labour, materials or  money “on an article”, for the purposes of altering, improving, restoring or maintaining it.

These repairs include the transportation of the article for repair, and the towing or salvage of the article. They do not include lending money to a third party repairer.

SG’s expectation of repayment stemmed from its loan arrangement with the repairing companies, rather than the repayment of funds expended by SG on the aircraft itself. This arrangement was not within the definition of repairer contemplated by the Act, and SG was therefore not in a position to claim a non-possessory lien against the aircraft.

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