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Fernandes v. Araujo, 2014 ONSC 6432 (CanLII)

Date:
2014-11-04
File number:
CV-09-379206
Other citations:
123 OR (3d) 294 — 247 ACWS (3d) 929 — 41 CCLI (5th) 222 — [2014] OJ No 5248 (QL)
Citation:
Fernandes v. Araujo, 2014 ONSC 6432 (CanLII), <https://canlii.ca/t/gf641>, retrieved on 2024-03-28

Fernandes v. Araujo et al.; Allstate Insurance Company of Canada, Third Party

[Indexed as: Fernandes v. Araujo]

Ontario Reports

 

Ontario Superior Court of Justice,

Perell J.

November 4, 2014

 

123 O.R. (3d) 294   |   2014 ONSC 6432

Case Summary

 

 


Insurance — Automobile insurance — Statutory conditions — Insurer of all-terrain vehicle denying third party liability coverage to driver because she was not authorized by law to drive at time of accident — Minister of Finance issuing third party claim against insurer — Insurer's motion for summary judgment dismissing claim granted — Driver clearly breaching statutory condition of policy as she only had G1 licence at time of accident and was not licensed to drive ATV — No genuine issue existing which required trial.


Motor vehicles — Liability — Vicarious liability of owner — Owner permitting driver to have possession of his all-terrain vehicle on farm property — Owner vicariously liable for driver's negligence in operation of vehicle on highway even if he expressly prohibited her from driving on highway. [page295]

The plaintiff was injured while a passenger on an all-terrain vehicle owned by CA and driven by EA, who only had a G1 class licence, a learner's permit, at the time. The plaintiff sued CA and EA. The ATV was insured by Allstate. Allstate denied third party liability coverage for EA because she was operating the ATV while not authorized by law as she only had a G1 licence and therefore contravened statutory condition 4.1 of the standard Ontario automobile policy. Allstate also denied coverage to CA because he permitted EA to operate the ATV while she was not authorized by law to do so. EA was defended by the Minister of Finance through the Motor Vehicle Accident Claims Fund Act, R.S.O. 1990, c. M.41. The minister issued a third party claim against Allstate. Allstate brought a motion for summary judgment dismissing the main action against CA on the basis that there was no genuine issue that EA was operating the ATV on a highway without CA's consent. Allstate also moved for summary judgment dismissing EA's third party claim on the basis that EA was off insurance coverage.


Held, the motion for summary judgment in the main action should be dismissed; the motion for summary judgment in EA's third party proceeding should be granted.


An owner's vicarious liability under s. 192 of the Highway Traffic Act, R.S.O. 1990, c. H.8 for a driver's negligence in the operation of the owner's vehicle on a highway is based on possession, not operation, of the vehicle. If an owner gives a person possession of a vehicle that is capable of being driven on a highway, the owner is vicariously liable for any damages that are suffered as a result of that person's negligent operation of the vehicle on a highway even if the owner expressly prohibited the person from operating the vehicle, or from operating it on a highway. The evidence in this case established that CA permitted EA to possess and drive the ATV and did not impose any restrictions on the use of the ATV. Even if CA expressly told EA that the ATV was not to be taken on the highway, that restriction would not exculpate him from vicarious liability. There was no genuine issue requiring a trial that EA had possession of the ATV with the consent of CA.


There was no genuine issue requiring a trial that EA only had a G1 licence at the time of the accident and was not licensed to drive an ATV. If she was an insured under the Allstate policy, she was in breach of statutory condition 4.1.


Finlayson v. GMAC Leaseco Ltd. (2007), 86 O.R. (3d) 481, [2007] O.J. No. 3020, 2007 ONCA 557, 284 D.L.R. (4th) 747, 228 O.A.C. 17, 53 C.C.L.I. (4th) 84, 50 M.V.R. (5th) 1, 159 A.C.W.S. (3d) 750; Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641, apld


Henwood v. Coburn (2007), 88 O.R. (3d) 81, [2007] O.J. No. 4883, 2007 ONCA 882, [2008] I.L.R. I-4664, 54 M.V.R. (5th) 190, 289 D.L.R. (4th) 157, 232 O.A.C. 31, 162 A.C.W.S. (3d) 1039; Newman v. Terdik, 1952 CanLII 97 (ON CA), [1953] O.R. 1, [1952] O.J. No. 477, [1953] 1 D.L.R. 422, [1953] O.W.N. 8 (C.A.), consd


Other cases referred to


Baird v. Abouibrahim (2012), 110 O.R. (3d) 600, [2012] O.J. No. 2588, 2012 ONSC 859, 12 C.C.L.I. (5th) 117, 217 A.C.W.S. (3d) 571 (S.C.J.); Barham v. Marsden, [1960] O.J. No. 60 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 1994 CanLII 814 (ON CA), 18 O.R. (3d) 481, [1994] O.J. No. 1214, 115 D.L.R. (4th) 557, 72 O.A.C. 178, 21 M.P.L.R. (2d) 73, 39 R.P.R. (2d) 1, 48 A.C.W.S. (3d) 443 (C.A.); Bruno Appliance and Furniture, Inc. v. Hryniak, [2014] 1 S.C.R. 126, [2014] S.C.J. No. 8, 2014 SCC 8, 314 O.A.C. 49, 453 N.R. 101; Campos v. Aviva Canada Inc., [2006] O.J. No. 2298, 38 C.C.L.I. (4th) 218, 149 A.C.W.S. (3d) 686 (S.C.J.); [page296] Canada (Attorney General) v. Lameman, [2008] 1 S.C.R. 372, [2008] S.C.J. No. 14, 2008 SCC 14, 292 D.L.R. (4th) 49, [2008] 2 C.N.L.R. 295, 86 Alta. L.R. (4th) 1, J.E. 2008-689, EYB 2008-131651, 372 N.R. 239, [2008] 5 W.W.R. 195, 429 A.R. 26, 68 R.P.R. (4th) 59, 164 A.C.W.S. (3d) 873; Case v. Coseco Insurance Co. (2011), 106 O.R. (3d) 472, [2011] O.J. No. 3233, 2011 ONSC 2499, 18 M.V.R. (6th) 69, [2011] I.L.R. I-5182, 99 C.C.L.I. (4th) 321 (S.C.J.); Cimino v. Dauber, [2013] O.J. No. 1418, 2013 ONSC 1609 (S.C.J.); Co-Operative Fire & Casualty Co. v. Ritchie, 1983 CanLII 155 (SCC), [1983] 2 S.C.R. 36, [1983] S.C.J. No. 61, 150 D.L.R. (3d) 1, 50 N.R. 106, 61 N.S.R. (2d) 437, 2 C.C.L.I. 215, [1983] I.L.RÂ1-1697 at 6530, 22 A.C.W.S. (2d) 5; Dawson v. Rexcraft Storage and Warehouse Inc., 1998 CanLII 4831 (ON CA), [1998] O.J. No. 3240, 164 D.L.R. (4th) 257, 111 O.A.C. 201, 26 C.P.C. (4th) 1, 20 R.P.R. (3d) 207, 81 A.C.W.S. (3d) 783 (C.A.); Donald v. Huntley Service Centre Ltd. (1987), 1987 CanLII 4199 (ON SC), 61 O.R. (2d) 257, [1987] O.J. No. 829, 42 D.L.R. (4th) 501, 7 M.V.R. (2d) 203, 6 A.C.W.S. (3d) 46 (H.C.J.); Gerl v. Barton, [2010] O.J. No. 5237, 2010 ONSC 6022 (S.C.J.); Pizza Pizza Ltd. v. Gillespie (1990), 1990 CanLII 4023 (ON SC), 75 O.R. (2d) 225, [1990] O.J. No. 2011, 45 C.P.C. (2d) 168, 33 C.P.R. (3d) 515, 23 A.C.W.S. (3d) 728 (Gen. Div.); Seegmiller v. Langer, 2008 CanLII 53138 (ON SC), [2008] O.J. No. 4060, 77 M.V.R. (5th) 46, 301 D.L.R. (4th) 454, 170 A.C.W.S. (3d) 638 (S.C.J.); Sked (Litigation guardian of) v. Henry, [1991] O.J. No. 339, 28 M.V.R. (2d) 234, 25 A.C.W.S. (3d) 988 (Gen. Div.); Sweda Farms Ltd. v. Egg Farmers of Ontario, [2014] O.J. No. 851, 2014 ONSC 1200 (S.C.J.); Thompson v. Bourchier, 1933 CanLII 106 (ON CA), [1933] O.R. 525, [1933] O.J. No. 356, [1933] 3 D.L.R. 119 (C.A.); Thorne v. Prets, 2003 CanLII 22084 (ON CA), [2003] O.J. No. 5241, 180 O.A.C. 41, 45 M.V.R. (4th) 69, 127 A.C.W.S. (3d) 800 (C.A.); Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co., [1997] O.J. No. 3754, 1997 CarswellOnt 3496, 74 A.C.W.S. (3d) 207 (C.A.), affg (1996), 1996 CanLII 7979 (ON SC), 28 O.R. (3d) 423, [1996] O.J. No. 1568, 2 O.T.C. 146, 62 A.C.W.S. (3d) 891 (Gen. Div.); Tut v. RBC General Insurance Co. (2011), 107 O.R. (3d) 481, [2011] O.J. No. 4509, 2011 ONCA 644, 285 O.A.C. 100, 19 M.V.R. (6th) 188, 342 D.L.R. (4th) 464, 1 C.C.L.I. (5th) 186, 208 A.C.W.S. (3d) 573; Watts v. Boyce, [2013] O.J. No. 5014, 2013 ONSC 6848, 56 M.V.R. (6th) 245, 28 C.C.L.I. (5th) 57, 234 A.C.W.S. (3d) 1088 (S.C.J.)


Statutes referred to


Highway Traffic Act, R.S.O. 1990, c. H.8, ss. 32(1), 192 [as am.], (1) [as am.], (2) [as am.], (3) [as am.], (4) [as am.]


Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41 [as am.]


Rules and regulations referred to


O. Reg. 316/03 (Highway Traffic Act), ss. 1, 18


O. Reg. 777/93 (Insurance Act), statutory condition 4(1)


Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 20, 20.04(2)(a), (2.1), (2.2)


Authorities referred to


Halsbury's Laws of England, 4th ed., vol. 354


Pollock, Frederick, and Robert Samuel Wright, An Essay on Possession in the Common Law (Oxford: Clarendon Press, 1888)

MOTIONS for summary judgment.

Stacey Stevens, for plaintiff.


Lorraine E. Takacs, for defendant Eliana Araujo and for the Superintendent of Financial Services.


Ken Page, for Carlos De Almeida and Carlos M. Almeida.


Sheldon A. Gilbert, Q.C., for Allstate Insurance Company of Canada. [page297]

 


PERELL J.: —


A. Introduction

[1] On May 26, 2007, the plaintiff, Sara Fernandes, was seriously injured while a passenger on a 2004 Polaris, an all-terrain vehicle ("ATV"), owned by the defendant Carlos M. Almeida ("Mr. Almeida Jr.") and insured by the statutory third party, Allstate Insurance Company of Canada. The ATV was being driven by the defendant Eliana Araujo, who only had a learner's permit, a G1 driver's licence.

[2] Allstate brings two summary judgment motions about its liability to provide insurance coverage to the owner of a vehicle involved in an accident on a highway when the vehicle was allegedly being driven without the consent of the owner.

[3] Allstate moves for a summary judgment dismissing the main action as against Mr. Almeida Jr. because it submits that there is no genuine issue that Ms. Araujo was driving the ATV on a highway without the consent of the owner, Mr. Almeida Jr., and, therefore, he cannot be vicariously liable for her alleged negligence.

[4] Allstate relies on the Court of Appeal's decision in Newman v. Terdik, 1952 CanLII 97 (ON CA), [1953] O.R. 1, [1952] O.J. No. 477 (C.A.) to distinguish the Court of Appeal's decision in Finlayson v. GMAC Leaseco Ltd.  (2007), 86 O.R. (3d) 481, [2007] O.J. No. 3020, 2007 ONCA 557, which is regarded as the modern governing authority about what it means to drive a vehicle on a highway without the consent of the owner. Allstate's argument raises the troublesome jurisprudential possibility that the two Court of Appeal cases are inconsistent and cannot be rationalized.

[5] Allstate also moves for a summary judgment to dismiss Ms. Araujo's third party claim, because Allstate submits that Ms. Araujo was off insurance coverage because (a) she was operating the ATV without the consent of the owner; or (b) she was operating the ATV with only a G1 licence, in contravention of statutory condition 4(1) of O. Reg. 777/93 of the insurance policy.

[6] For the reasons that follow, I dismiss Allstate's summary judgment motion in the main action and I grant its motion for a summary judgment in Ms. Araujo's third party proceeding.


B. Factual and Procedural Background

[7] On the morning of May 26, 2007, Mr. Almeida Jr. drove to his farm in Dundalk, Ontario, in the Municipality of Southgate. He was accompanied by his cousin Jean Paul Almeida and by [page298] Ms. Araujo, who was Jean Paul's girlfriend. The purpose of the trip appears to have been to fix a fence on the farm.

[8] Sometime after the arrival of this group, they were joined by (1) Frank Almeida, who is Mr. Almeida Jr.'s uncle; (2) David Almeida, another cousin; and (3) Ms. Fernandes, who was David's girlfriend. David is the owner of a nearby farm property.

[9] At Mr. Almeida Jr.'s farm, he had an ATV. His father was financing the purchase of the vehicle, and it was registered in the name of the father, but it is not disputed that Mr. Almeida Jr. was the owner of the ATV. His father did not insure the vehicle, but Mr. Almeida Jr. had a valid insurance policy with Allstate.

[10] On May 26, 2007, the Almeidas and their companions used the ATV to transport tools from the farm buildings to the field where the fence was being repaired. Upon returning from the field, Mr. Almedia Jr. parked the ATV in the garage with the key in it.

[11] On the farm property, Ms. Fernandes, who has never had a driver's licence, drove the ATV with Ms. Araujo as passenger.

[12] Mr. Almeida Jr. told Ms. Araujo that she could try out the ATV on the farm property. Mr. Almeida Jr. did not know, and he did not inquire about, the status of Ms. Araujo's driver's licence. Nobody, including Ms. Araujo, seems to have appreciated that O. Reg. 316/03 requires an operator of an ATV to have at least a G2 licence.

[13] Mr. Almeida Jr. saw both Ms. Fernandes and Ms. Araujo driving the ATV around the farm.

[14] Mr. Almeida Jr. was present when Jean Paul explained to Ms. Araujo how to operate the vehicle, and he was also present when Jean Paul told Ms. Araujo not to leave the farm property on the vehicle.

[15] Although he did not forbid Ms. Araujo or Ms. Fernandes from leaving the property, Mr. Almeida Jr. did not anticipate that they would do so, and he said that had Ms. Fernandes and Ms. Araujo asked, he would not have permitted them to drive off the farm property.

[16] Late in the afternoon, Ms. Fernandes suggested to Ms. Araujo that they drive to David Almeida's nearby farm, and with Ms. Fernandes driving, they set off. They did not ask permission to leave the farm property or permission to drive on the public road that was the route between the farms.

[17] Mr. Almeida Jr. did not know that Ms. Fernandes and Ms. Araujo had left his farm to travel to his cousin's farm.

[18] After a trip time of approximately 25 minutes, Ms. Araujo and Ms. Fernandes arrived without incident at David's farm. [page299]

[19] With Ms. Araujo now driving the ATV for the return trip and Ms. Fernandes now the passenger, they set out to return to Mr. Almeida Jr.'s farm. Unfortunately, at about 5:00 p.m. on Side Road 19, near its intersection with County Road 9, the vehicle rolled over and Ms. Fernandes was seriously injured.

[20] On May 30, 2007, Mr. Almeida Jr. provided Allstate with a signed statement about what he knew about the accident. He stated:

I own a 2004 Polaris ATV . . . On Saturday May 26, 2007, I went with Jean Paul and Eliana Araujo to my farm in Dundalk, Ontario. We left in the morning and I drove my pick-up truck. Jean Paul is my cousin and Eliana is his girlfriend of 5 months. I have known her for just 5 months. Our intentions were to go there for the day. When I got there I started putting up the electric fence in the field and Jean Paul and Eliana were helping me. We used the ATV to get out to the field. It is a 4-wheel ATV with a seat for only one driver. I did have Eliana and Jean Paul on it with me, but I would drive it very slow. We came back to the house around 4:15 p.m., and I went and used the bobcat to do other work near the house and barn -- and I was alone doing this. The ATV was left outside the garage with the key in it. I was working and I saw Eliana later driving the ATV and she was alone on it driving slowly around the garage area. . . . My uncle Frank and Sara [plaintiff] and David show up. David is my cousin and Sara is his girlfriend. . . . Frank came over and helped me and Jean Paul with the bobcat. . . . I did not see where the ATV was or Eliana. I figured out later that she left on the ATV with Sara. I never told her not to use it as I never thought she would go beyond the garage and field area. I would never lend it out to 2 girls without experience. . . . I was not aware of Eliana having a driver's licence or not. . . . I knew she had not driven on an ATV before and she wanted to try it out and she talked to Jean Paul about it and she was just driving it slowly near us and I had told them that it was okay for her to try it as both Jean Paul and I were nearby and she was not going too fast or far. When the other people showed up she -- Eliana -- did not ask if she could leave the property driving the ATV.

[21] On May 22, 2009, Ms. Fernandes issued her statement of claim, which was subsequently amended on March 14, 2012. She sued the Almeidas, Jr. and Sr.

[22] The defendant Almeidas, Jr. and Sr., did not defend, and they were noted in default.

[23] Ms. Araujo was defended by the Minister of Finance through the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41.

[24] Allstate denied third party liability coverage for Ms. Araujo as the operator of the ATV, because she was operating the ATV while not authorized by law because she only had a G1 class driver's licence, and therefore contravened statutory condition 4(1) of the standard Ontario Automobile Policy (OAP 1). Allstate also denied coverage to Mr. Almeida Jr. by reason of his permitting Ms. Araujo to operate the ATV while not authorized by law to do so. [page300]

[25] On November 4, 2009, on behalf of Ms. Araujo, the Minister of Finance issued a third party claim against Allstate. The third party claim was amended on April 29, 2010.

[26] On July 9, 2012, Ms. Araujo delivered a statement of defence and cross-claim.

[27] Allstate defended the third party claim, and by order dated July 14, 2011, Allstate was added to the main action as a statutory third party.

[28] On January 17, 2012, Ms. Fernandes was examined for discovery.

[29] On July 9, 2012, the defendant Ms. Araujo delivered a statement of defence and cross-claim.

[30] By order dated January 14, 2013, the Superintendent of Financial Services was let out of the action.

[31] On February 6, 2013, Ms. Araujo was examined for discovery.

[32] On February 14, 2013, Allstate delivered an amended statement of defence in the main action.

[33] Allstate now brings two motions for summary judgment that if successful will take it out of the main action and Ms. Araujo's third party proceedings.


C. Discussion and Analysis

1. Introduction

[34] Allstate's summary judgment motion in the main action is made on behalf of Mr. Almeida Jr., who has not defended the main action. Allstate's argument is that Mr. Almeida Jr. is not vicariously liable for Ms. Araujo's negligence because she was driving the ATV on the highway expressly or impliedly without his consent. Allstate relies on the Court of Appeal's decision in Newman v. Terdik, supra. Allstate submits that Ms. Fernandes' action against Mr. Almeida Jr. based on vicarious liability, for which there would be insurance coverage, should be summarily dismissed.

[35] Ms. Araujo and Ms. Fernandes resist the summary judgment motion. Ms. Araujo submits that there are genuine issues for trial about vicarious liability and that the consent issue should not be decided on a motion for summary judgment.

[36] Further, relying on the Court of Appeal's decision in Finlayson v. GMAC Leaseco Ltd., supra, Ms. Araujo and Ms. Fernandes submit that it has been established that Mr. Almeida Jr. consented to Ms. Araujo having possession of the ATV, and, therefore, he consented to her use of it on the highway and he is vicariously liable for Ms. Araujo's vehicular negligence. If this [page301] submission is correct, then Allstate's obligation to indemnify Mr. Almeida Jr. is engaged.

[37] Allstate also brings a summary judgment motion in Ms. Araujo's third party claim that seeks a declaration that there is insurance coverage for her under Mr. Almeida Jr.'s insurance policy with Allstate.

[38] In the discussion that follows, after first discussing the court's jurisdiction to grant summary judgment, I will review the law, the jurisprudence, and the competing arguments to come to the conclusion that Allstate's summary judgment motion in the main action should be dismissed and there should be a binding determination that Mr. Almeida Jr. is vicariously liable for the negligence, if any, of Ms. Araujo.

[39] I will then turn to Allstate's motion for summary judgment in the third party proceedings. Here, I will conclude that Allstate's summary judgment motion should be granted.

2. The court's jurisdiction to grant summary judgment

[40] As a matter of procedure, rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that the court shall grant summary judgment if "the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence".

[41] With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04(2.1) states:

20.04(2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

 1.   Weighing the evidence.

 2.   Evaluating the credibility of a deponent.

 3.   Drawing any reasonable inference from the evidence.

[42] In Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC No. 7, the Supreme Court of Canada held that on a motion for summary judgment, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers enacted when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and [page302] justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[43] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rule 20.04(2.1) and (2.2). As a matter of discretion, the motion judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[44] Hryniak v. Mauldin encourages the use of a summary judgment motion to resolve cases in an expeditious manner provided that the motion can achieve a fair and just adjudication. Speaking for the Supreme Court, Justice Karakatsanis opened her judgment by stating [at paras. 1-2]:

Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. . . .

Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.

[45] At para. 22 of her judgment Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8 (CanLII), [2014] 1 S.C.R. 126, [2014] S.C.J. No. 8, Justice Karakatsanis summarized the approach to determining when a summary judgment may or may not be granted; she stated:

Summary judgment may not be granted under Rule 20 where there is a genuine issue requiring a trial. As outlined in the companion Mauldin appeal, the motion judge should ask whether the matter can be resolved in a fair and just manner on a summary judgment motion. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. If there appears to be a genuine issue requiring a trial, based only on the record before her, the judge should then ask if the need for a trial can be avoided by using the new powers provided under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice.

[46] Justice Corbett provided a useful summary of the Hryniak v. Mauldin approach in Sweda Farms Ltd. v. Egg Farmers of Ontario, [2014] O.J. No. 851, 2014 ONSC 1200 (S.C.J.), where he stated, at paras. 33 and 34: [page303]

As I read Hryniak, the court on a motion for summary judgment should undertake the following analysis:

(1)   The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;

(2)   On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;

(3)   If the court cannot grant judgment on the motion, the court should:

(a)   Decide those issues that can be decided in accordance with the principles described in (2), above;

(b)   Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues;

(c)   In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.

The Supreme Court is clear in rejecting the traditional trial as the measure of when a judge may obtain a "full appreciation" of a case necessary to grant judgment. Obviously greater procedural rigour should bring with it a greater immersion in a case, and consequently a more profound understanding of it. But the test is now whether the court's appreciation of the case is sufficient to rule on the merits fairly and justly without a trial, rather than the formal trial being the yardstick by which the requirements of fairness and justice are measured.

[47] Hryniak v. Mauldin does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have respectively advanced their best case and that the record contains all the evidence that the parties will respectively present at trial: Dawson v. Rexcraft Storage and Warehouse Inc., 1998 CanLII 4831 (ON CA), [1998] O.J. No. 3240, 164 D.L.R. (4th) 257 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 1994 CanLII 814 (ON CA), 18 O.R (3d) 481, [1994] O.J. No. 1214 (C.A.); Canada (Attorney General) v. Lameman, 2008 SCC 14 (CanLII), [2008] 1 S.C.R. 372, [2008] S.C.J. No. 14, at para. 11. The onus is on the moving party to show that there is no genuine issue requiring a trial, but the responding party must present its best case or risk losing: Pizza Pizza Ltd. v. Gillespie (1990), 1990 CanLII 4023 (ON SC), 75 O.R. (2d) 225, [1990] O.J. No. 2011 (Gen. Div.); Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 1996 CanLII 7979 (ON SC), 28 O.R. (3d) 423, [1996] O.J. No. 1568 (Gen. Div.), affd [1997] O.J. No. 3754, 1997 CarswellOnt 3496 (C.A.).

3. Driving on the highway without the owner's consent

[48] Pursuant to s. 192(1) and (2) of the Highway Traffic Act, R.S.O. 1990, c. H.8, the driver of a motor vehicle is liable and the [page304] owner of the vehicle is vicariously liable for negligence in the operation of the vehicle on highway.

[49] The owner, however, is not vicariously liable if the vehicle is without the owner's consent in the possession of some other person. Section 192(1) and (2) state:

Liability for loss or damage

192(1) The driver of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street car on a highway.

(2) The owner of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street car on a highway, unless the motor vehicle or street car was without the owner's consent in the possession of some person other than the owner or the owner's chauffeur.

[50] Pursuant to s. 192(3) and (4), a lessee of a motor vehicle is treated in a similar fashion to an owner. Section 192(3) and (4) state:

Liability for loss or damage

192(3) A lessee of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street car on a highway, unless the motor vehicle or street car was without the lessee's consent in the possession of some person other than the lessee or the lessee's chauffeur.

Consent of lessee

(4) Where a motor vehicle is leased, the consent of the lessee to the operation or possession of the motor vehicle by some person other than the lessee shall, for the purposes of subsection (2), be deemed to be the consent of the owner of the motor vehicle.

[51] The onus of proving that a vehicle on a highway was in another's possession without the consent of the vehicle's owner is on the owner: Watts v. Boyce, [2013] O.J. No. 5014, 2013 ONSC 6848 (S.C.J.).

[52] The question of whether a motor vehicle is in the possession of some person without the consent of the owner is a question of fact to be determined by the evidence in a particular case: Newman v. Terdik, supra; Barham v. Marsden, [1960] O.J. No. 60 (C.A.); Thorne v. Prets, 2003 CanLII 22084 (ON CA), [2003] O.J. No. 5241, 180 O.A.C. 41 (C.A.); Henwood v. Coburn (2007), 88 O.R. (3d) 81, [2007] O.J. No. 4883, 2007 ONCA 882, at para. 25.

[53] In Finlayson v. GMAC Leaseco Ltd., supra, following an old line of authority that begins with Thompson v. Bourchier, 1933 CanLII 106 (ON CA), [1933] O.R. 525, [1933] O.J. No. 356 (C.A.), the Court of Appeal held that vicarious liability under s. 192(1) of the Highway Traffic Act is based on possession, not operation, of the vehicle. The [page305] owner does not escape vicarious liability simply because the person with possession breaches some condition of having possession. At para. 16 of her judgment for the court, Justice Gillese stated that if an owner gives a person (in that case, a lessee) possession of a vehicle that may be driven on a highway, even if the person is expressly prohibited from operating the vehicle, the owner remains vicariously liable for any damages that are suffered as a result of the negligent operation of the vehicle.

[54] In Finlayson v. GMAC Leaseco Ltd., supra, Justice Gillese applied the old case of Thompson v. Bourchier, supra. The facts of the Thompson case were that the defendant Bourchier, carrying on business as Hertz-Drive-Yourself System, rented an automobile under a written contract of hire to Lupson. The contract stipulated that the vehicle was not to be operated by anyone other than Lupson or his employee. Lupson took a man named Brown for a ride, and after a stop to make a purchase, Lupson returned to the car to find Brown behind the steering wheel. Brown insisted that he be allowed to drive. Lupson resisted the request, but he gave in, and several hours later, while Brown was driving, there was an accident, and Thompson was injured. It was admitted that Brown was grossly negligent, and the issue was whether Bourchier, the owner of the vehicle, was vicariously liable, which would be the case, unless the vehicle was in the possession of someone without Bourchier's consent. Justice Fisher reasoned that Bourchier had consented to Lupson's possession of the vehicle and that possession not operation was the key to the interpretation of the vicarious liability provisions of the Highway Traffic Act.

[55] To explain why Bourchier was vicariously liable, Justice Fisher stated [in Thompson, at paras. 13-15]:

I think a clear distinction can be made between the operation and the possession of an automobile. A car may be operated by a chauffeur whilst driving his master and owner to his office, and I do not think any one would contend that in such a case the owner was not in possession and the chauffeur not in charge of the operation. Supposing, for example, Lupson had asked his seventeen-year-old son, instead of Brown, to drive with him and the son, having requested his father to permit him to drive -- and the father remaining in the car, consented -- and an accident happened, I do not think it could be said the son was in possession of the car within the meaning of the statute.

It would, in my opinion, be placing a too narrow construction on the word "possession," as used in sec. 41(a), to hold that Lupson was not in possession of the motor vehicle when Brown was driving. Brown was, in fact, never in possession as owner but in the occupancy as Lupson's guest to operate, subject to Lupson's possession, which of course was the owner's possession. [page306]

My conclusion is that Lupson, in all the circumstances of this case, was in possession of the motor vehicle, with the defendant's consent, at the time of the accident and that the defendants are liable.

[56] The facts of Finlayson v. GMAC Leaseco Ltd., were similar. In this case, GMAC, the owner of a vehicle, leased it to John Simon. The lease expressly prohibited Mr. Simon from operating the vehicle, but he disobeyed and the vehicle was involved in a collision. The court held that GMAC was vicariously liable for Mr. Simon's negligence. Justice Gillese stated, at para. 28 of her judgment for the court:

GMAC entered into the Lease with Mr. Simon. It was the Lease that gave Mr. Simon possession of the vehicle. Therefore, GMAC consented to his possession of the vehicle. It is true that GMAC did not consent to Mr. Simon's operation of the truck and that by the terms of the Lease, Mr. Simon was expressly prohibited from operating the truck. However, as already discussed, possession and operation are not the same thing, in law. GMAC consented to Mr. Simon's possession of the vehicle; it did not consent to his operation of it. Breach of conditions placed by the owner on another person's possession of the vehicle, including those relating to who may operate the vehicle, do not alter the fact of the second person's possession.

[57] In Finlayson v. GMAC Leaseco Ltd., Justice Gillese identified the legislative policy behind the vicarious liability provisions of the Highway Traffic Act by referring to what Justice Fisher stated in Thompson v. Bourchier, supra, at pp. 527-28 O.R.:

I think it must be conceded that the object of the Legislature in enacting sections 41 and 41(a) of the Highway Traffic Act [now s. 192] was to protect the public by imposing upon the owner of a motor vehicle the responsibility of careful management thereof and of assuming the risk of those to whom he entrusted possession that they would observe the law, and that if they failed in the discharge of that duty, the owner -- using the words of the statute -- would be responsible "for all losses and damage sustained in the operation thereof".

[58] In Henwood v. Coburn, supra, the Court of Appeal followed Finlayson v. GMAC Leaseco Ltd., supra, and held that the fact that the driver may be operating the vehicle without the consent of the owner, or even contrary to the express wishes of the owner, is irrelevant if the vehicle is in the possession of a person with the owner's consent. For vicarious liability, the determinative question is whether there was consent to possession that can be attributed to the owner.

[59] The decision of the Court of Appeal in Henwood v. Coburn reveals that vicarious liability under s. 192 of the Highway Traffic Act is an extensive long-arm policy and that if an owner expressly or impliedly, for example, by making available the keys to the vehicle, entrusts the physical possession of the vehicle to another person, then the vehicle owner will be vicariously [page307] liable for the operation of that vehicle on a highway by the person entrusted with the vehicle and any others who come to be operating the vehicle while it is in the possession of the entrusted person.

[60] The facts of Henwood v. Coburn were that Ontario Car and Truck Rental ("Ontario Car") leased a truck to Fitzgerald to be used by his employee Henwood for deliveries of frozen meat that Fitzgerald sold door-to-door. Fitzgerald asked Henwood to train Coburn (who did not have a driver's licence or insurance) by taking him along on a sales trip. After their delivery work was completed, Henwood and Coburn went to a tavern, and when the inebriated Henwood refused to drive the inebriated Coburn to Barrie, several hours distance from the tavern, Coburn punched Henwood in the face and took the keys to the truck. They both then got into the truck, and despite Henwood's protest, Coburn set off to Barrie with Henwood as passenger. About 20 minutes into the drive, Coburn crashed the truck. Henwood was injured in the accident, and he sued Ontario Car (the owner), Coburn (the driver) and his insurer, Pembridge Insurance Company, under his uninsured motorist coverage.

[61] Reversing the motion judge, Justice Rosenberg in the Court of Appeal dismissed Ontario Car's motion for summary judgment because there was a genuine issue for trial about whether notwithstanding that Henwood was a passenger, he had possession of the vehicle, in which case the owner, Ontario Car, would be vicariously liable, or whether Henwood had lost legal possession and, therefore, Coburn was driving the vehicle without the consent of the owner.

[62] Justice Rosenberg (who along with Justice Cronk had been a member of the panel that decided Finlayson v. GMAC Leaseco Ltd.) described the long reach of the vicarious liability provisions of the Highway Traffic Act, in paras. 12 to 16 and 25 of his judgment [Henwood], where he stated:

The appellant submits that the evidence demonstrates without question that Coburn was not in possession with the owner's consent and this fact determines the s. 192(2) issue in its favour, entitling it to summary judgment. In my view, this argument cannot succeed. It is inconsistent with the reasons of the majority in Thompson v. Bourchier, 1933 CanLII 106 (ON CA), [1933] O.R. 525, [1933] O.J. No. 356 (C.A.), which have repeatedly been followed by this court, the Divisional Court and trial courts for over eighty years. I can see no basis for not following or applying that decision in this case.

It was held in Thompson that an owner will be liable under s. 192(2) where the person to whom the owner entrusted possession of the vehicle is in possession of the vehicle at the time of the collision, even if that person was not actually driving at the time. [page308]

Cases applying Thompson have made it clear that the fact that the driver may be operating the vehicle without the consent of the owner, or even contrary to the express wishes of the owner, is irrelevant provided that the person to whom the owner entrusted the vehicle is in possession of the vehicle, albeit as a passenger. Some of these cases include:

-- Lajeunesse v. Janssens (1983), 1983 CanLII 1714 (ON SC), 44 O.R. (2d) 94, [1983] O.J. No. 3241 (H.C.J.): The owner allowed her son to use the car on condition that only he drove it. The son allowed his friend to drive while he remained as a passenger. Since the son remained in possession with the consent of the owner, the owner was liable.

-- Berge v. Langlois (1982), 1982 CanLII 3151 (ON SC), 138 D.L.R. (3d) 119, 15 A.C.W.S. (2d) 415 (Ont. H.C.J.), affd 1984 CanLII 3080 (ON CA), [1984] O.J. No. 51, 6 D.L.R. (4th) 766 (C.A.): The owner lent the car to a friend who in turn allowed another person to drive. The friend was a passenger at the time of the collision. Since the friend was in possession with the consent of the owner at the time, the owner was liable.

-- Gunn v. Birch, [1986] O.J. No. 2702, 47 M.V.R. 212 (Dist. Ct.), affd [1987] O.J. No. 645 (Div. Ct.): The owner loaned his car to a friend on condition that only licensed drivers operate the car (the friend was not licensed). At the time of the collision the friend and another unlicensed driver were driving. Since the friend was in possession at the time, the owner was liable.

-- McKay v. McEwen (1999), 1999 CanLII 14777 (ON SC), 43 O.R. (3d) 306, [1999] O.J. No. 744 (Gen. Div.): The owner loaned his car to his son on condition that he let no one else drive. At the time of the accident, a friend of the son was driving the car, but the son was a passenger. Since the son remained in possession at the time, the owner was liable.

Another example is the recent decision of this court, Finlayson v. GMAC Leaseco Ltd.  (2007), 2007 ONCA 557 (CanLII), 86 O.R. (3d) 481, [2007] O.J. No. 3020 (C.A.). In that case, the owner leased the vehicle to Simon and Jefferies on condition that Simon not operate it because he was not licensed. Simon was driving at the time of the accident. However, since the owner had consented to Simon's possession, it was liable even though it did not consent to his driving. This court reiterated the point that the issue under s. 192 is possession, not operation. Provided that the vehicle is in the possession of a person with the owner's consent, the owner is liable regardless of whether the person actually operating the vehicle has the owner's consent, and even if that person is operating the vehicle contrary to the owner's express wishes.

The appellant urges this court to follow the dissenting reasons of Masten J.A in Thompson, rather than the majority decision. Masten J.A. would have held that the person actually operating the vehicle is the only person in possession (barring a chauffeur situation). Whatever the logic of that position, it is now far too late to abandon over eighty years of settled law.


. . . . .

It is a question of fact whether Henwood had regained possession of the vehicle at the time of the accident. As this court has said in a number of decisions, most recently in Thorne v. Prets [(2003), 2003 CanLII 22084 (ON CA), 45 M.V.R. (4th) 69 (Ont. C.A.)] at para. 18, "the question of whether a motor vehicle was in the possession of some other person without the owner's consent is a question of fact to be decided by the evidence in each particular case". I note that in [page309] Finlayson at para. 23, this court stated that, "Possession is a question of law whereas operation of a vehicle is a question of fact." I think it more correct to say that the meaning of possession is a question of law; the application of that definition to any particular set of facts is not a question of law alone. There is no suggestion in Finlayson that the court intended to depart from the line of authority referred to in Thorne holding that whether a person is in possession of a vehicle depends on the particular facts.

[63] See, also, Donald v. Huntley Service Centre Ltd. (1987), 1987 CanLII 4199 (ON SC), 61 O.R. (2d) 257, [1987] O.J. No. 829 (H.C.J.); Sked (Litigation guardian of) v. Henry, [1991] O.J. No. 339, 28 M.V.R. (2d) 234 (Gen. Div.); Seegmiller v. Langer, 2008 CanLII 53138 (ON SC), [2008] O.J. No. 4060, 77 M.V.R. (5th) 46 (S.C.J.); Gerl v. Barton, [2010] O.J. No. 5237, 2010 ONSC 6022 (S.C.J.); Case v. Coseco Insurance Co.  (2011), 106 O.R. (3d) 472, [2011] O.J. No. 3233, 2011 ONSC 2499 (S.C.J.); Baird v. Abouibrahim (2012), 110 O.R. (3d) 600, [2012] O.J. No. 2588, 2012 ONSC 859 (S.C.J.); Cimino v. Dauber, [2013] O.J. No. 1418, 2013 ONSC 1609 (S.C.J.); and Watts v. Boyce, supra. Of particular interest are (a) Donald v. Huntley Service Centre Ltd., where the owner of the vehicle was vicariously liable for his son's negligent driving, because, although the son's driver's licence was suspended and he had been forbidden to drive the vehicle, he had been given possession of it; (b) Sked v. Henry, where an unlicensed 15-year-old had been given possession of the keys of his father's car so that a licensed driver could drive it to the auto shop at the son's school; the father, the owner of the vehicle, was held to be vicariously liable when the son started up the car in the school's parking lot; and (c) Seegmiller v. Langer, supra, where the owner of the vehicle was held vicariously liable because she had given control over the keys to the vehicle to her unlicensed-to-drive daughter, who drove the vehicle notwithstanding instructions that she should not do so until she had obtained a licence.

[64] Applying this law to the facts of the case at bar and putting to the side for a moment the significance of the Court of Appeal's decision in Newman v. Terdik, there is no genuine issue for trial that Ms. Araujo was driving the ATV with the consent of Mr. Almeida Jr., who entrusted the physical possession of the vehicle to her.

[65] The evidence establishes that Mr. Almeida Jr. permitted Ms. Araujo to possess and drive the ATV and did not impose any restrictions on the use of the ATV, unless Jean Paul Almeida's prohibition from leaving the farm property can be attributed to Mr. Almeida Jr., which, in my opinion, it cannot. Whatever Mr. Almeida Jr. may have thought, he did not expressly forbid the ATV from being taken off the property and he did nothing to prevent that from happening. [page310]

[66] But, in any event, it matters not, because even if Jean Paul's command could be attributed to Mr. Almeida Jr., it was Mr. Almeida Jr. that entrusted possession of the ATV to Ms. Araujo and pursuant to the authority Finlayson v. GMAC Leaseco Ltd., any restrictions on her use of the ATV would not exculpate him from vicarious liability.

[67] This brings the discussion to Newman v. Terdik, which is relied on by Allstate to distinguish Finlayson v. GMAC Leaseco Ltd.

[68] The facts of the Newman case were that Terdik owned a tobacco farm upon which there was a farm lane connecting two groups of kilns that were approximately one-half mile apart. Terdik employed Perkinson on the tobacco farm. Perkinson was given permission to use Terdik's automobile to travel between the kilns. There were express instructions that Perkinson was not to go on the highway with the automobile. Perkinson, however, disobeyed instructions, and on a trip to Simcoe, he was involved in an accident in which Newman was injured. The trial judge, Justice Smily, and the Court of Appeal, in a judgment written by Justice Mackay held that Perkinson did not have possession of the vehicle with Terdik's consent and, therefore, Terdik was not vicariously liable.

[69] Justice Mackay explained his reasoning, at paras. 16-18 of his judgment [Newman], as follows:

The meaning of the word "possession" was discussed in Thompson v. Bourchier and recently in Marsh v. Kulchar, 1951 CanLII 56 (SCC), [1952] 1 S.C.R. 330, [1952] 1 D.L.R. 593. I think it is clear from the reading of these cases and of Hirshman v. Beal (1916), 1916 CanLII 561 (ON CA), 38 O.L.R. 40 at 51, 32 D.L.R. 680, 28 C.C.C. 319, that possession can change from rightful possession to wrongful possession, or from possession with consent to possession without consent, without any change in the actual physical possession of the chattel. In Hirshman v. Beal, Mr. Justice Masten refers to the definition of theft as set out in s. 347 of The Criminal Code, R.S.C. 1927, c. 36, particularly subs. 4, which is as follows:

"It is immaterial whether the thing converted was taken for the purpose of conversion, or whether it was, at the time of conversion, in the lawful possession of the person converting."

This was also the law in cases of conversion under the common law.

Whether the owner of a motor car has satisfied the onus of showing that his car at the time of the accident was on the highway in the possession of some other person without his consent is a question of fact to be determined on the evidence in each case, and in this case I think the learned trial judge, on the evidence that Terdik not only had not consented to Perkinson using his car on the highway but had expressly forbidden such use, was right in holding that there was no consent to the use of his motor car within the meaning of s. 50 of The Highway Traffic Act. [page311]

[70] For present purposes of considering the application of Newman v. Terdik to the case at bar, it should be noted that in reaching his conclusion that Terdik was not vicariously liable, Justice Mackay, although aware of his own court's earlier decision in Thompson v. Bourchier, relies on the fact that [at para. 18] "not only had [Terdik] not consented to Perkinson using his car on the highway but had expressly forbidden such use". For present purposes, it follows that Newman v. Terdik is distinguishable, because I have found as a fact that Mr. Almeida Jr. did not expressly forbid Ms. Araujo from using the ATV.

[71] It also follows that Newman v. Terdik may be wrongly decided because Justice Mackay did not correctly apply Thompson v. Bourchier, although he professed to be doing so. And, in turn, it further follows, that I should, therefore, follow Thompson v. Bourchier and Finlayson v. GMAC Leaseco Ltd. and not Newman v. Terdik.

[72] In Case v. Coseco Insurance Co., supra, where the owner of a school bus was held to be vicariously liable for an accident caused by an employee who was driving the bus after the hours prescribed for its use and notwithstanding a directive against such a practice, Justice Mullins followed Finlayson v. GMAC Leaseco Ltd. as the more recent decision of the Court of Appeal, and he declined to follow Newman v. Terdik. Justice Mullins noted that the Court of Appeal in Newman v. Terdik had not considered the difference between consent to possession and consent to use in a prescribed manner.

[73] A third possibility is that Newman v. Terdik can be explained based on a finding of fact that Terdik had never consented to Perkinson having legal possession of the automobile at all. In this regard, it needs to be recalled that the legal conception of what counts for possession is a very complex and sophisticated concept. The classic work is F. Pollock and R.S. Wright, An Essay on Possession in the Common Law (Oxford: Clarendon Press, 1888). The essay is 244 pages in length.

[74] In law, possession is a complex concept. What counts for possession will vary depending on the circumstances and depending on the nature of the property right in question. The law considers two main factors in determining whether a person has possession of property: (1) factum, physical control or the ability to exclude others from enjoyment of the property; and (2) animus possidendi, the intention to possess. In Halsbury's Laws of England, 4th ed., vol. 354, para. 1211, the authors state:

The elements normally characteristic of legal possession are an intention of possessing together with that amount of occupation or control of the [page312] entire subject matter of which it is practically speaking capable and which is sufficient for practical purposes to exclude strangers from interfering.

[75] With the factors of factum and animus possidendi in play, possession from a legal perspective may be, but is not always, the same as possession in a physical sense. There is the further complication that the law often does not differentiate between possession and the right to possession. For example, if a lawyer leaves his or her clothes in the robing room to go to the courtroom, he or she will still have possession of the clothes from a legal although not from a physical perspective. Constructive possession is a situation where a person out of physical possession is, nevertheless, regarded as having possession. Sometimes, to make this point, the idea of custody is used. An employee, for instance, may have custody of the employer's car, but with legal possession remaining with the employer, and it may be that in Newman v. Terdik, Justice Mackay concluded that Perkinson had custody but never possession of the automobile with the consent of the owner.

[76] In any event, I conclude that Newman v. Terdick is not helpful to Allstate in the circumstances of the case at bar.

[77] Applying the authority of Hryniak v. Mauldin, I am satisfied that I can decide this matter without a trial and without the necessity of Ms. Araujo or Ms. Fernandes bringing a cross-motion for a partial summary judgment, I hold that there is no genuine issue requiring a trial that Ms. Araujo had possession of the ATV with the consent of Mr. Almeida Jr. and that Allstate's motion for summary judgment in the main action should be dismissed on this basis.

[78] The main action should continue in the normal course to determine the negligence, if any, of the defendants and the merits, if any, of their defences.

4. Driving an ATV in contravention of statutory condition 4(1)

[79] I turn now to Allstate's motion for summary judgment in the third party proceedings brought by Ms. Araujo. As will appear from the analysis below, with her G1 licence, Ms. Araujo was not licensed to drive an ATV and, therefore, she was in breach of Mr. Almeida Jr.'s insurance policy by driving the ATV because she was not authorized by law to drive it.

[80] I wish to make clear that I am not making any determination whether Mr. Almeida Jr. is in breach of the statutory conditions of his insurance policy with Allstate. Whether the driver is in breach of a statutory condition in the insurance policy is a separate question from whether the owner of the car [page313] is in breach of the statutory condition: Tut v. RBC General Insurance Co. (2011), 107 O.R. (3d) 481, [2011] O.J. No. 4509, 2011 ONCA 644, at paras. 37-39; Campos v. Aviva Canada Inc., [2006] O.J. No. 2298, 38 C.C.L.I. (4th) 218 (S.C.J.), at paras. 14-15; Co-Operative Fire & Casualty Co. v. Ritchie, 1983 CanLII 155 (SCC), [1983] 2 S.C.R. 36, [1983] S.C.J. No. 61. Whether Mr. Almeida Jr. knew or ought to have known under all the circumstances that Ms. Araujo was not authorized to operate the ATV remains to be determined and whether he breached the statutory conditions remains to be determined.

[81] Section 32(1) of the Highway Traffic Act provides that no person shall drive a vehicle, unless the person has a driver's licence to drive the vehicle. Section 32(1) states:

Driver's licence

32(1) No person shall drive a motor vehicle on a highway unless the motor vehicle is within a class of motor vehicles in respect of which the person holds a driver's licence issued to him or her under this Act.

[82] Section 18 of O. Reg. 316/03 (Operation of Off-road Vehicles on Highways) requires the driver of an off-road vehicle to hold a valid Class A, B, C, D, E, F, G, G2, M or M2 driver's licence. Section 18 states:

18. The driver of the off-road vehicle shall hold a valid Class A, B, C, D, E, F, G, G2, M, or M2 driver's licence issued under the Act unless he or she is exempt, under section 34 of the Act [residency requirements] from the application of section 32 [class of licence requirements] of the Act.

[83] Under O. Reg. 316/03, s. 1, an "all-terrain motor vehicle" ("ATV") qualifies as an "off-road vehicle". Under the regulation, an "all-terrain vehicle" is defined as follows:

In this Regulation,

"all-terrain vehicle" means an off-road vehicle that,

(a)   has four wheels, the tires of all of which are in contact with the ground,

(b)   has steering handlebars,

(c)   has a seat that is designed to be straddled by the driver, and

(d)   is designed to carry a driver only and no passengers[.]

[84] Statutory condition 4(1) [of O. Reg. 777/93], under the Insurance Act, as amended, provides:

4(1) The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it. [page314]

[85] Statutory condition 4(1) is reproduced under s. 8 of the standard Ontario Automobile Policy (OAP 1), as follows:

Section 8 -- STATUTORY CONDITIONS

Note: the Insurance Act (Ontario) requires that these conditions be printed as part of every automobile insurance policy in Ontario[.]

Authority to Drive

4(1) The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.

[86] There is no genuine issue requiring a trial that Ms. Araujo only had a G1 licence at the time of the accident and that she was driving the ATV without being licensed to do so. If she was an insured under the Allstate insurance policy, she, therefore, breached the statutory condition of the policy that the insured shall not drive or operate the automobile unless authorized by law to drive or operate it.


D. Conclusion

[87] For the above reasons, I dismiss Allstate's summary judgment motion in the main action but grant its summary judgment motion in the third party proceedings.

[88] If the parties cannot agree about the matter of costs, they may make submissions in writing, beginning with Ms. Fernandes' and Ms. Araujo's submissions within 20 days of the release of these reasons for decision, followed by Allstate's submissions within a further 20 days.

Motions granted in part.

 


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