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Default on Your Car Lease and…Go To Jail?

Case CommentMercedes-Benz Financial v. Kovacevic (2009 Ontario Superior Court)

In civil matters (i.e. where someone sues you for a breach of a contract) you can, in special circumstances, be sent to jail for contempt.  If you fail to obey a Court order, then this behaviour could eventually lead to jail time.  See Rule 60.11(5) of Ontario’s Rules of Civil Procedure.

This case is an interesting read.  The defendant leased a very expensive Mercedes-Benz and then stopped paying on the lease.  In a convoluted argument, the defendant argued that he “split” himself into two entities – one person who leased the Mercedes-Benz (and was failing to pay for it) and a second person/entity who was not subject to the laws of man, generally.  The Court’s patience and step-by-step rationale for finding in the defendant in contempt is a worthwhile read which reminds us of the importance of the Court having the power to find persons in contempt.  As stated at paragraph 5 of the March 3, 2009 decision:

A court exercises its contempt power to uphold the dignity and process of the court, thereby sustaining the rule of law and maintaining the orderly, fair, and impartial administration of justice.

The defendant here chose to openly reject the Court’s jurisdiction until the very end, at sentencing, when he apologized for his previous conduct.  His wife testified on his behalf; the defendant also indicated that he was attempting to work on improving his relationship with his wife and their two young children.

The defendant lost the lawsuit and is responsible for damages and costs incurred by Mercedes-Benz.  In addition, he was given a sentence of five days in jail for his contempt.

Gregory Chang
Toronto Insurance Litigation Lawyer