Every now and then you read a case that seems like a law school
exam question. The recent decision of The Bank of Nova
Scotia and Scotia Dealer Advantage Inc. v Darcy Tucker Holdings
Ltd. is a perfect example. In this case, the Court of
King's Bench of New Brunswick found that a lender to
customers purchasing vehicles from a dealership had priority over a
supplier of those vehicles even though the supplier was never paid
by the dealership for the vehicles and may not have transferred
title to the dealership.
FACTS
DMR Auto Sales (DMR), a car dealership, entered into an
arrangement with Darcy Tucker Holdings Inc. (DTHI), a vehicle
wholesaler, whereby DTHI supplied vehicles to DMR. DMR would sell
those vehicles to its customers in the ordinary course of business
and would sometimes arrange financing of those vehicles with a
bank, in this case, The Bank of Nova Scotia (BNS). Part of this
arrangement included DTHI retaining the registration of the
vehicles in its name
