Court of Appeal decision on vicarious liability (Highway Traffic Act)

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Court of Appeal decision on vicarious liability (Highway Traffic Act)

Fernandes v. Araujo, 2015 ONCA 571

The Ontario Court of Appeal just clarified the law with respect to the vicarious liability attributed to motor vehicle owners who by consent allow another to possess their vehicle.

The issue in this case surrounded the interpretation of s. 192(2) of the Highway Traffic Act, which states that, a vehicle owner is liable for the negligent behavior of a vehicle’s operator if the operator’s possession has been consented to.

The Court of Appeal, recognizing conflict within the case law, reviewed various precedents cited by the parties and ultimately decided to overturn their previous decision of Newman v Terdik, [1953] O.R. 1 (C.A.).  The 5 judge panel selected to hear the appeal determined that Newman decision could not be followed, since it did not align with precedents dating back as far as 1933. Upon reaching that conclusion, the Court committed itself to clarifying this murky area of law.

“[41] The proposition upon which Newman rests, namely, that “possession can change from rightful possession to wrongful possession, or from possession with consent to possession without consent,” where the person in possession violates a condition imposed by the owner, is inconsistent with the reasoning of this line of authority.

[44]       In my view, Newman was wrongly decided. It is inconsistent with the reasoning and principle expressed in the long line of cases commencing with Thompson that if the owner has consented to possession, the owner will be vicariously liable even if there is a breach of a condition imposed by the owner relating to the use or operation of the vehicle.”

The Court re-iterated that, consent to possession is different from consent to operate; a crucial distinction for the purposes of s. 192(2).  Simply stated, if the owner of a vehicle transfers possession of the vehicle for “safekeeping” while on vacation, but strictly declares that the car should not be driven, it does not matter – if the person in possession of the car disobeys the owner’s instructions, operates the vehicle and gets into an accident, the owner is still vicariously liable, as liability is triggered upon consenting to possession.

The one wrinkle is that the Court of Appeal confirmed the correctness of the Newman-esque decision from Myers-Gordon (Litigation Guardian of) v. Martin, 2013 ONSC 5441. In that case, a mother left the keys to her car on her dresser before leaving the house. The son took the keys and drove the car while impaired, getting into an accident. The son has previously driven the car, but there was no discussion on that date that he could possess the vehicle.  The Court of Appeal stated that Myers-Gordon rested on the particular factual situation, where both the mother and the son agreed that the son did not have the requisite consent to drive. Therefore, a “subjective” element still exists with respect to “possession,” although, in my opinion, it has been weakened substantially.