Can you buy or sell a stolen vehicle? In most cases, the simple answer is no.

A thief can’t sell a stolen vehicle, because they don’t have lawful ownership to pass to the buyer. For this reason, even though the buyer may pay good money, the buyer can’t acquire ownership.

Having said this, sometimes legalities can complicate matters.

Imagine this scenario. You are the owner of a dealership. You enter into an agreement with a third party who helps you to locate cars and you compensate them accordingly. Each time they help you find a vehicle, you pay the owner of each car directly. From time to time, the third party holds these vehicles for you claiming that they needed repairs before pick-up. This works fine for a while.

The problem starts when you go to pick up some vehicles that have supposedly been repaired, but they’ve gone missing. You’ve already paid the sellers for over 200 such vehicles, and the third party is now nowhere to be found.

You notify the police, and they locate them. It turns out, the third party purported to sell the vehicles to innocent buyers, who paid good money, without your knowledge.

The police seize the vehicles for you; however, when you go to register the vehicles into your name at ServiceOntario they refuse to do so. They require a court order. This once profitable arrangement has now cost you hundreds of thousands of dollars!

You file a court application naming ServiceOntario and the buyers of these vehicles, in the hopes that a court will rule that you are the lawful owner of these stolen vehicles.

This is a real court case that was recently argued and it’s more of a legal issue than it is a moral one. While the dealership argued the rule that a thief cannot sell a stolen vehicle, the innocent buyers got creative. They argued that because the dealership entered into an agreement to locate cars for it in exchange for money, the third party was the dealership’s “agent”. They argued that since the third party was the dealership’s agent, and since they paid good money as innocent buyers under the Sale of Goods Act, lawful ownership should still pass to them, despite any fraud.

As interesting as this case was, we did not get a final decision from the court. That’s because it was brought as a court application, rather than a court action. Most people think of lawsuits as involving a full trial with witnesses giving evidence in court. That’s generally an action.

Applications are different. They’re usually decided using written evidence and legal arguments, without live witnesses. Where a judge concludes that disputed facts cannot fairly be resolved using only written evidence, the judge can order that all or part of the application proceed to trial.

That’s exactly what happened in this case and that’s why we’re still waiting for a final decision.

The judge recognized that everyone involved appeared to be a victim of the same fraud. The difficult question wasn’t who deserved to lose, it was what the law required.

Another way of putting it is … it’s complicated.

Members interested in reading the full decision can do so by following this link HERE