Daily Life Troubles: Who Do You Return A Leased Car To?

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 salesperson.

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.