If you allow another person to take possession of your motor vehicle you will be held liable for any damages caused by the negligent operation of the vehicle. It is therefore important to protect yourself from a possible lawsuit as a result of the negligent operation of your motor vehicle (either by you or by someone else) by buying adequate motor vehicle liability insurance. Speak to your broker.
The Highway Traffic Act makes the owner of a motor vehicle liable for the negligence of any driver who “possesses” the motor vehicle with the owner’s “consent”. The policy behind this unique “vicarious liability” is “to protect the public by imposing on the owner of a motor vehicle responsibility for the careful management of the vehicle”.
The Ontario Court of Appeal has determined that vicarious liability applies even if the vehicle is operated in a manner forbidden by the owner. The court found that there is a significant distinction between the concepts of possession and operation: “possession and operation are not the same thing, in law.” As long as the driver has the owner’s consent for possession, vicarious liability applies, even if the operation is in a manner forbidden by the owner. Vicarious liability applies to any motor vehicle governed by the Highway Traffic Act including off-road vehicles.
In the case under consideration by the Ontario Court of Appeal, the plaintiff suffered serious injuries as a passenger on an ATV that was driven on the highway by the defendant. Driving the ATV on the highway was in contravention of the instructions given by the owner to only operate it on his farm. While the ATV was being driven on a public road it rolled over, injuring the passenger. The passenger sued the driver and the owner of the ATV. The owner’s insurance company took the position that vicarious liability did not apply because the driver did not follow the owner’s explicit instructions to stay on the farm.
After reviewing a number of older cases, the court decided to overturn a prior decision which held that breach of the restrictions placed on use of the vehicle terminated “consent to possession”. It found that the policy did cover the defendant driver even though she “broke the rules” by driving the ATV on a highway.
Vicarious liability has been applied in a variety of factual circumstances:
· when the owner consented to possession but stipulated that the person with possession not drive;
· when the owner consented to possession but stipulated that only the person with possession drive the vehicle
· when the owner consented to possession but stipulated that the person with possession only drive the vehicle for a specified purpose;
· when the vehicle was driven by another party contrary to owner’s stipulation that no one else drive.