CITATION: Shark Investment Group Inc. v. Scarborotown Chrysler Dodge Jeep Ltd. (Quest Automotive Leasing Services), 2009 ONCA 414

DATE: 20090519

DOCKET: C47419

COURT OF APPEAL FOR ONTARIO

Doherty, Moldaver and Simmons JJ.A.

BETWEEN:

Shark Investment Group Inc. and Ralph Papa

Appellants

and

Scarborotown Chrysler Dodge Jeep Ltd., carrying on business as Quest Automotive Leasing Services

Respondent

AND BETWEEN:

1324955 Ontario Ltd. carrying on business as California Sandwiches and Carmela Papa

Appellants

and

Scarborotown Chrysler Dodge Jeep Ltd., carrying on business as Quest Automotive Leasing Services

Respondent

Alan S. Price, for the appellants

William F. Kelly, for the respondent

Heard: May 14, 2009

On appeal from the judgment of Justice J.B. Shaughnessy of the Superior Court of Justice dated June 22, 2007.

APPEAL BOOK ENDORSEMENT

[1] On the virtually unchallenged facts, the appellants were in breach of the terms of the lease requiring that they maintain insurance on the vehicles. That breach placed the appellants in default and entitled the respondent to take the steps it took.

[2] We reject the submission that the fact that the parties had a good long-term relationship somehow required the respondent to exercise the option available to it under the terms of the lease to place the insurance itself and charge the cost against the lease. That provision was exercisable entirely at the respondent’s option.

[3] We also reject the submission that the respondent was obligated to accept the proposed replacement insurance put forward by the appellants. First, the evidence does not support the contention that the appellants had replacement insurance available. The trial judge found there was no “appropriate insurance available”. Second, there was no requirement that the respondent continue the prior arrangement relating to the placement of insurance after the respondent learned that the entities who had made that arrangement were under investigation for insurance fraud.

[4] The other arguments in the factum were not advanced in oral argument and we reject them.

[5] The appeal is dismissed. Costs to the respondent on a partial indemnity basis is fixed at $10,000, inclusive of disbursements and GST.