Court of Appeal for Ontario

Citation: BMW Financial Services Canada v. McLean, 2015 ONCA 342

Date: 2015-05-14

Docket: C59659

Before: Feldman, van Rensburg and Huscroft JJ.A.

Between:

BMW Financial Services Canada, a division of BMW Canada Inc. Plaintiff (Respondent)

and

Amy McLean also known as Amy Katz also known as Amy Katz McLean also known as Amy A. Katz also known as Amy A. McLean also known as Amy A. Katz McLean Defendant (Appellant)

Counsel: Howard E. Katz, for the appellant Adam Nathanson, for the respondent

Heard: May 4, 2015

On appeal from the judgment of Justice Jane A. Milanetti of the Superior Court of Justice, dated November 14, 2014.

Endorsement

[1] The appellant appeals from the judgment of Milanetti J. granting summary judgment to the respondent in an action arising out of an alleged default on a conditional sales agreement for the purchase of a used BMW car.

[2] The appellant purchased the car from a BMW dealership and the respondent financed the purchase in two contracts dated August 7, 2009. The purchase price was $109,172.90.

[3] The financing agreement assigned the dealership’s rights and title to the car to the respondent, who registered a security interest in the car under the Personal Property Security Act, R.S.O. 1990, c. P.10 (the “PPSA”). The appellant returned to the dealership for service on several occasions and was ultimately unsatisfied with the car. She failed to keep up with the payment schedule and made a unilateral decision to return the car to the dealership on December 15, 2010.

[4] The respondent sold the car at a public auction for less than the amount outstanding on the loan and brought an action against the appellant for the balance owing. Milanetti J. granted summary judgment for $40,865.92 plus 18% interest.

[5] The appellant says that she raised a genuine issue requiring a trial. She says that the dealership made false and misleading representations to her that induced her to purchase the car. She submits that the relationship between the dealership and the respondent is a close and continuing one and, as a result, she should be able to raise any defences relevant to the dealership against the respondent. In addition, she says that the respondent did not provide the required notice of sale under the PPSA and sold the car for less than its market value.

[6] We reject these arguments. As to the relationship between the dealership and the respondent, it was open to the motion judge to conclude that they are separate entities. The appellant led no evidence on the point and the respondent was never cross-examined on the affidavit it filed indicating its independence from the dealership. The evidence shows no more than that the trade name “BMW” is common to the dealer and the respondent.

[7] Moreover, there was no evidence that the respondent played any role in the relationship between the appellant and dealership. This is not a case like Federal Discount Corporation v. St. Pierre, 1962 CanLII 124 (ON CA), [1962] O.R. 310 (C.A.), on which the appellant relied. In the absence of evidence establishing a relationship between the dealership and respondent, any false or misleading representations the dealership may have made to the appellant are not relevant to the respondent’s actions.

[8] The motion judge concluded that she did not need to resolve the conflicting evidence as to whether notice of the intent to sell the car was properly given under the PPSA. According to the motion judge, even assuming a failure to provide notice occurred, it would not undermine the respondent’s right to claim for a deficiency under the contract. We agree with this conclusion.

[9] Although a failure to provide notice under the PPSA gives rise to a right to compensation, it is for the appellant to establish damages and she did not do so. The appellant argues that the respondent failed to mitigate properly, but the motion judge was entitled to conclude that the appellant led insufficient evidence to permit a conclusion that the sale was improvident and that she incurred a compensable loss as a result.

[10] Although the motion judge’s reasons are brief, her conclusion is supported on the evidentiary record that was before her. There is no reason to interfere with her conclusion that the sale of the vehicle at a public auction was a commercially reasonable approach for the respondent to have taken.

[11] Accordingly, the appeal is dismissed.

[12] The appellant shall pay the respondent costs of $8,000 inclusive of taxes and disbursements.

"K. Feldman J.A."

"K. van Rensburg J.A."

"Grant Huscroft J.A."