General Motors Acceptance Corp. of Canada Ltd. v. Town and Country Chrysler Ltd. et al., 2007 ONCA 904

• Judge: Armstrong, Juriansz and LaForme, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 20, 2007
• Jurisdiction: Ontario
• Citations: 2007 ONCA 904;(2007), 232 O.A.C. 168 (CA)

GMAC v. Town & Country Chrysler (2007), 232 O.A.C. 168 (CA)

MLB headnote and full text

Temp. Cite: [2008] O.A.C. TBEd. JA.013

General Motors Acceptance Corporation Of Canada, Limited (plaintiff/respondent) v. Town and Country Chrysler Limited and Devolin Auto Group Limited (defendants/appellants)

(C43483; 2007 ONCA 904)

Indexed As: General Motors Acceptance Corp. of Canada Ltd. v. Town and Country Chrysler Ltd. et al.

Ontario Court of Appeal

Armstrong, Juriansz and LaForme, JJ.A.

December 28, 2007.

Summary:

An Ontario car dealer (T & C) purchased a car from a wholesaler in Quebec with whom it had done business for a long time. The wholesaler represented there was no other interests in the car. The same day, T & C sold the car to an Ontario wholesaler (Devolin). Neither of the Ontario purchasers conducted a search under the Register of Personal and Movable Real Rights (a Quebec equivalent of the Personal Property Security Act of Ontario). If they had done a search on the day of the transactions, they would have found nothing registered against the car. Twelve days later, a finance company (GMAC) registered its security interest in the car under the Quebec legislation which registration was said to be retroactive to the day before T & C made the initial purchase. GMAC later registered the security interest in Ontario. GMAC sought to enforce its security interest against the Ontario purchasers.

The Ontario Superior Court, in a decision reported at [2005] O.T.C. 260, held that both Ontario purchasers were presumed to have knowledge of GMAC's security interest and found that their presumed good faith conduct in proceeding as they did was rebutted by their failure to act with due diligence. The trial judge awarded damages against the purchasers. The purchasers appealed.

The Ontario Court of Appeal dismissed the appeal.

Conflict of Laws - Topic 9621

Evidence and proof - Proof of foreign law - General - The Ontario Court of Appeal held that an Ontario trial judge erred in determining the issues of Quebec law without reference to the expert evidence called by the parties respecting the Quebec law - The court found that the trial judge delivered relatively lengthy and detailed reasons - However these reasons did not contain a single reference to the expert evidence and the trial judge made no findings in respect of that evidence - He did not indicate whether he accepted or rejected the opinions expressed by either expert and appeared to decide the case as if he were a judge sitting in a Quebec court - The court concluded that where a trial judge failed to make findings respecting the evidence of foreign law, the court was at liberty "to apply its own mind" to the questions of foreign law - See paragraphs 36 to 38.

Conflict of Laws - Topic 9621

Evidence and proof - Proof of foreign law - General - The Ontario Court of Appeal held that the appropriate standard of review on appeals concerning questions of foreign law was correctness - The rationale that supported a high degree of deference for findings of fact made by a trial judge did not apply to findings and determinations made respecting foreign law - Those factors, supporting a high degree of deference to a trial judge's findings of fact, were either not present in a trial judge's consideration of foreign law or, if they were present, they were not significant - See paragraphs 28 to 35.

Personal Property - Topic 6201.1

Security interests - Priorities - Effect of actual or constructive notice - An Ontario car dealer (T & C) purchased a car from a wholesaler in Quebec with whom it had done business for a long time - The wholesaler represented that there was no other interests in the car - The same day T & C sold the car to an Ontario wholesaler (Devolin) - Neither of the Ontario purchasers conducted a search under the Register of Personal and Movable Real Rights (a Quebec equivalent of the Personal Property Security Act of Ontario) - If they had done a search on the day of the transactions, they would have found nothing registered against the car - Twelve days later, a finance company (GMAC) registered its security interest in the car under the Quebec legislation which registration was said to be retroactive to the day before T & C made the initial purchase - GMAC later registered the security interest in Ontario - GMAC sought to enforce its security interest against the Ontario purchasers - The trial judge allowed the action - The purchasers appealed - The Ontario Court of Appeal held that the presumption under art. 2943 of the Civil Code that purchasers had knowledge of GMAC's security interest had not been rebutted by good faith (defined in art. 932 of the Civil Code ) - The court held that the evidence of GMAC's expert in Quebec law as to the steps that a prudent purchaser should have taken in the situation was sufficient to rebut the presumption of good faith - See paragraphs 39 to 47.

Personal Property - Topic 6468

Security interests - Loss of title to third parties - Transferee for value without notice (bona fide purchaser) - [See Personal Property - Topic 6201.1 ].

Personal Property - Topic 6530

Security interests - Remedies of secured party - Claims against third parties - [See Personal Property - Topic 6201.1 ].

Cases Noticed:

Honda Canada Finance Inc. v. Guèvremont, [2003] J.Q. No. 1175 (C.Q. civ.), dist. [para. 21].

Caisse populaire Pointe-Gatineau v. Martel, [2002] J.Q. No. 5022 (C.Q. civ.), dist. [para. 21].

Banque Nationale du Canada v. Michel et Serge Auto Inc., [1989] R.J.Q. 2905 (C.Q. civ.), dist. [para. 21].

Bank of Nova Scotia v. Wassef, [2000] O.T.C. 954 (Sup. Ct.), refd to. [para. 29].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 30].

Minister of National Revenue v. Schwartz, [1996] 1 S.C.R. 254; 193 N.R. 241, refd to. [para. 31].

Gillet (Rouyer) et Cie v. Guillet (Rouyer) & Co., [1949] 1 All E.R. 244 (C.A.), refd to. [para. 38].

Authors and Works Noticed:

Phipson, Sidney Lovell, The Law of Evidence (16th Ed. 2005), para. 1-35 [para. 34].

Counsel:

Ronald G. Slaght, Q.C. and Jennifer King, for the appellants;

Rolf M. Piehler, for the respondent.

This appeal was heard on June 20, 2007, by Armstrong, Juriansz and LaForme, JJ.A., of the Ontario Court of Appeal. The following decision of the court was delivered by Armstrong, J.A., on December 28, 2007.