There are many ways in which people run into disputes in daily
life. Leasing a vehicle is an area of life where people
can run into troubles. Not many situations lead to court, but
those few cases that do can provide useful information for others
to avoid or resolve disputes that may arise in their lives.
The lesson that you can learn from a recent case is to be
careful that you return the vehicle to the leasing company, which
may not be the same as returning it to the same lot or
In Hav-A-Kar Leasing Ltd. v. Vekselshtein,
2012 ONCA 826, a trial and an appeal arose from a dispute, in
part, that arose because a leased car was returned to the car sales
company rather than the leasing company. As is common, an
individual negotiated with a car sales company for the purchase of
a vehicle. The individual wanted to lease the vehicle and
discussed a lease with the salesperson. The actual leasing
company was a different company than the sales company.
The written lease required the defendant to pay specified
amounts if he breached the lease - all of the monthly payments due
for the rest of the four year lease period ("accelerated
rent"), the cost of repairs to sell the car, the lawyer's
fees and other costs paid by the leasing company to deal with any
breach. The defendant "returned" the car to the car
sales company only six months into the four year lease and
purchased another car. The defendant spoke only to the
salesperson and not the leasing company. At trial, the
defendant was found to be responsible to pay $72,358.80 to the
leasing company for the accelerated rent, storage fees paid by
Hav-A-Kar Leasing Ltd. to the car sales company, repairs, and
legal fees of the leasing company. The defendant claimed at
the appeal that the car salesperson who negotiated the lease and
later "received" the returned car was an agent of the
leasing company. The courts rejected this and held that the
leasing company was a different entity and the salesperson had not
been "clothed" in authority to act for the leasing
company, in the face of the written lease saying that the car had
to be returned to the leasing company.
The recent decision of the Ontario Court of Appeal in BMW Financial Services Canada, a Division of BMW Canada Inc. v. McLean provides some useful insight into the relationship between automobile dealers and the financing arms of the manufacturers for whom those dealers are franchisees.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).