A $96,000 towing storage dispute ballooned to nearly half a million dollars – and an Ontario court just told the towing company it overcharged.
In a decision filed on May 8, 2026, the Ontario Superior Court of Justice sided with Intact Insurance Company in a fight over how much a Vaughan-area towing operator could charge for storing vehicles. The answer, the court found, was a lot less than what was being billed.
The case, 730162 Ontario Ltd. v. Intact Insurance Company, 2026 ONSC 2578, centered on a deceptively simple question: does a private contract between a towing company and the police override a municipal cap on storage fees?
York Auto Repairs and Towing had been under contract with York Regional Police since at least 2017 to tow and store vehicles in the City of Vaughan. When the contract was extended in late 2022, outdoor storage rates climbed to $70.80 per day and indoor rates to $76.80. York Auto billed Intact accordingly, on vehicles that were either recovered after theft or stored following collisions. Intact had stepped into the shoes of its policyholders through subrogation under section 152(1) of the Insurance Act.
The problem was that the City of Vaughan’s By-Law 122-2022 capped storage fees at $55 per day for outdoor and $60 for indoor. York Auto argued its police contract trumped the by-law, pointing to section 134.1(2) of the Highway Traffic Act, which makes towing and storage costs a debt owed by a vehicle’s owner, operator, and driver. If the police agreed to those rates, the reasoning went, insurers should have to pay them.
Justice Di Luca was not persuaded. The by-law’s exemption for government contracts covered only towing fees – not storage. And the Highway Traffic Act, the court found, simply makes storage costs collectible as a debt. It does not give police the power to set those costs. There was also no evidence that the rates had been approved by the Chief Licensing Officer or that the contract had been properly filed as the by-law required.
The financial toll of the dispute is hard to ignore. What began as roughly $96,000 across 28 lien applications under the Repair and Storage Liens Act grew to over $483,000 as vehicles sat in storage while the parties litigated. On the question of whether Intact’s multiple lien applications amounted to vexatious litigation, the court said it need not fully decide the issue, but pointed to J.P. Towing v. Intact, 2019 ONSC 1495, where Justice Pattillo refused to make that finding.
For insurers and claims teams, the takeaway is clear: municipal by-laws setting maximum storage rates hold, even when a towing operator has negotiated higher rates with law enforcement. A private contract does not rewrite a public rule.
The specific by-law at issue has since been repealed. Ontario introduced the Towing and Storage Safety and Enforcement Act, 2021, which established a province-wide framework effective January 1, 2024 – replacing the patchwork of municipal rules that made disputes like this one possible in the first place.
