Cross Border Statutory Moulder Lien Priority Rules in Tier Two Automotive Insolvency Proceedings
Statutory moulder liens grant possessory tool priority over lenders, but insolvency stays require immediate local notice and adequate protection.
Ontario Repair and Storage Liens Act
Meaning
Provincial statutes in Ontario establish the legal rights of service providers to retain or sell personal property to recover unpaid costs for work performed. The ontario repair and storage liens act applies to tool and die makers who manufacture or maintain injection moulds for plastic production. It provides a structured process for asserting a claim against the asset when a customer fails to pay for services rendered.
This law covers both the labor spent on the tool and the costs associated with keeping the equipment on the premises.
Possession Power
Control of the physical mould remains the most effective tool for a shop seeking payment. A moulder can refuse to release the equipment to the owner until the outstanding balance for repairs or storage is cleared. If the tool is released, the lien is usually lost unless a specific registration is made.
This right of retention is the primary protection for the service provider under the act.
Non-Possessory Filing
Formal registration in the personal property security registry allows a provider to maintain a legal interest even after the tool has returned to the customer. This non-possessory lien must be registered within a specific timeframe to be valid against third parties. It ensures the toolmaker has a claim that follows the equipment into the customer’s facility.
Without this filing, the provider becomes an unsecured creditor once the asset is out of their hands.
Enforcement Action
Public auction or private sale provides the final mechanism for recovering the debt under the statute. The lien claimant must provide formal notice to the owner and any other secured parties before proceeding with a sale. Proceeds from the sale go toward the unpaid invoice, with any surplus returned to the debtor.
This process requires strict adherence to notice periods to avoid legal liability for wrongful sale of the mould.