W.A. Kelly

The appellant leased a luxury vehicle from the respondent but returned it to a third-party dealership a few months later to purchase a different vehicle, claiming an oral agreement allowed him to do so.

The respondent sued for breach of the lease, claiming accelerated rent and damages for the loss on the sale of the vehicle.

The trial judge found the appellant liable, rejecting the argument that the dealership acted as the respondent's agent.

On appeal, the Court of Appeal upheld the trial judge's findings, concluding there was no evidence of agency, the accelerated rent clause was an enforceable liquidated damages provision, and the respondent had reasonably mitigated its damages.

The appellant appealed the dismissal of its motion seeking to strike an action brought by a debenture trustee and assignee arising from an alleged failure to perform duties undertaken during a corporate restructuring and bankruptcy context.

The court held it had not been demonstrated that the respondent could not succeed at trial on the issue of capacity, accepting that the floating charge over the debtor's assets, including choses in action, could crystallize on bankruptcy and support the trustee's standing.

Assuming without deciding that leave was required to sue the appellant in its role as monitor, the absence of leave was treated as an irregularity and leave was granted nunc pro tunc because there was a proper basis for the claim and no demonstrated prejudice.

The argument that individual debentureholders had to be added as parties was also rejected, and the appeal was dismissed with costs.