Fernandes v. Araujo et al., 2015 ONCA 571

• Judge: Sharpe, MacFarland, Rouleau, Lauwers and Pardu, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 18, 2015
• Jurisdiction: Ontario
• Citations: 2015 ONCA 571;(2015), 337 O.A.C. 46 (CA)

Fernandes v. Araujo (2015), 337 O.A.C. 46 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. AU.013

Sara Fernandes (plaintiff/respondent) v. Eliana Araujo, Carlos De Almeida, Carlos M. Almeida, and The Superintendent of Financial Services (defendants/respondents) and Allstate Insurance Company of Canada added by Order pursuant to section 258(14) of the Insurance Act, R.S.O. 1990, c. I.8 (third party/appellant)

(C59682; 2015 ONCA 571)

Indexed As: Fernandes v. Araujo et al.

Ontario Court of Appeal

Sharpe, MacFarland, Rouleau, Lauwers and Pardu, JJ.A.

August 10, 2015.

Summary:

Section 192(2) of the Highway Traffic Act imposed liability on the owner of a vehicle for damage caused by a person who was driving the vehicle with the owner's consent. Almeida told Araujo and Fernandes that they could ride his ATV. Almeida's cousin, in Almeida's presence, told Araujo and Fernandes not to leave the farm property with the ATV. Araujo drove the ATV off the property with Fernandes as a passenger. The ATV rolled. Fernandes was injured. She sued for damages. Almeida's insurer moved for summary judgment to dismiss the action on the basis that Araujo was not driving the ATV with Almeida's consent.

The Ontario Superior Court denied the motion. The insurer appealed.

The Ontario Court of Appeal dismissed the appeal.

Courts - Topic 77

Stare decisis - Authority of judicial decisions - Prior decisions of same court - Reconsideration - Section 192(2) of the Highway Traffic Act imposed liability on the owner of a vehicle for damage caused by a person who was driving the vehicle with the owner's consent - In Finlayson et al. v. GMAC Leaseco Ltd. (2007 Ont. C.A.), the court affirmed a long line of authority which held that, as the vicarious liability of the owner rested on possession, rather than operation, of the vehicle, the owner was liable if the owner consented to the possession, even if the driver operated the vehicle in a way that was prohibited by the owner - However, in Newman v. Terdik (1953 Ont. C.A.) (Newman), the court held that, where the owner gave the driver permission to drive on private property but expressly prohibited driving on the highway, the owner was not liable for damages sustained in a highway accident - The Ontario Court of Appeal overruled Newman as wrongly decided - The rule of stare decisis was not absolute - Decisions that rested on an unstable foundation tended to undermine the very values of certainty and predictability that stare decisis was meant to foster - Newman created an anomaly that undermined the law's coherence and was likely to lead to confusion - Further, for all practical purposes, this was the final court of appeal on the issue - The court could not shirk from the responsibility for ensuring that the law rested on a coherent principle - Newman no longer represented the law of Ontario - See paragraphs 45 to 53.

Courts - Topic 90.3

Stare decisis - Authority of judicial decisions - Prior decisions of same court - Prior wrong decision and whether error should be perpetuated (communis error facit jus) - [See Courts - Topic 77 ].

Torts - Topic 302

Negligence - Motor vehicle - Liability of owner for negligence of driver of owner's vehicle - Scope or application of principle - Section 192(2) of the Highway Traffic Act imposed liability on the owner of a vehicle for damage caused by a person who was driving the vehicle with the owner's consent - Almeida told Araujo and Fernandes that they could ride his ATV - Almeida's cousin, in Almeida's presence, told Araujo and Fernandes not to leave the farm property with the ATV - Araujo drove the ATV off the property with Fernandes as a passenger - The ATV rolled - Fernandes was injured - She sued for damages - Almeida's insurer moved for summary judgment to dismiss the action on the basis that Araujo was not driving the ATV with Almeida's consent - The motion was denied - At issue on the insurer's appeal was whether the motion judge had erred by concluding that, in the absence of an express prohibition against taking the ATV off the farm property, Almeida had consented to Araujo's possession - The Ontario Court of Appeal dismissed the appeal - It was entirely open to the motion judge to conclude that, despite the cousin's statement, Almeida had not forbidden Araujo from driving the ATV on the highway - Araujo's subjective belief that she did not have permission to drive on the highway was not the test - The focus and purpose of s. 192(2) was on the owner who was charged with the responsibility of exercising appropriate caution when lending a vehicle - See paragraphs 21 to 29.

Torts - Topic 302

Negligence - Motor vehicle - Liability of owner for negligence of driver of owner's vehicle - Scope or application of principle - Section 192(2) of the Highway Traffic Act imposed liability on the owner of a vehicle for damage caused by a person who was driving the vehicle with the owner's consent - In Finlayson et al. v. GMAC Leaseco Ltd. (2007 Ont. C.A.), the court affirmed a long line of authority which held that, as the vicarious liability of the owner rested on possession, rather than operation, of the vehicle, the owner was liable if the owner consented to the possession, even if the driver operated the vehicle in a way that was prohibited by the owner - However, in Newman v. Terdik (1953 Ont. C.A.) (Newman), the court held that, where the owner gave the driver permission to drive on private property but expressly prohibited driving on the highway, the owner was not liable for damages sustained in a highway accident - The Ontario Court of Appeal, in dismissing the appeal, overruled Newman - It was fundamental to the purpose and operation of s. 192(2) that the owner's liability was triggered by consenting to possession - Possession and operation were distinct - Newman rested on the proposition that possession could change from rightful possession to wrongful possession or to possession without consent when a person in possession violated a condition imposed by the owner - That was inconsistent with the reasoning in the Finlayson line of authority - Newman was wrongly decided - If an owner consented to possession, the owner was liable even if there was a breach of a condition imposed by the owner relating to the vehicle's operation - See paragraphs 35 to 44.

Torts - Topic 308

Negligence - Motor vehicle - Liability of owner for negligence of driver of owner's vehicle - Meaning of "possession" - [See both Torts - Topic 302 ].

Torts - Topic 309

Negligence - Motor vehicle - Liability of owner for negligence of driver of owner's vehicle - Meaning of "consent" - [See both Torts - Topic 302 ].

Cases Noticed:

Finlayson et al. v. GMAC Leaseco Ltd. (2007), 228 O.A.C. 17; 86 O.R.(3d) 481 (C.A.), folld. [para. 4].

Newman v. Terdik, [1953] O.R. 1 (C.A.), overruled [para. 5].

Thompson v. Bourchier, [1933] O.R. 525 (C.A.), refd to. [para. 20].

Myers-Gordon et al. v. Martin et al., [2013] O.T.C. Uned. 5441; 117 O.R.(3d) 142; 2013 ONSC 5441, affd. [2014] O.A.C. Uned. 692; 69 M.V.R.(6th) 1; 2014 ONCA 767, refd to. [para. 22].

Seegmiller v. Langer et al., [2008] O.T.C. Uned. L28; 301 D.L.R.(4th) 454 (Sup. Ct.), refd to. [para. 38].

Henwood v. Coburn et al. (2007), 232 O.A.C. 31; 2007 ONCA 882, refd to. [para. 39].

Cooper v. Temos (1956), 3 D.L.R.(2d) 172 (Ont. C.A.), refd to. [para. 39].

Lajeunesse v. Janssens et al. (1983), 44 O.R.(2d) 94 (H.C.), refd to. [para. 40].

McKay et al. v. McEwen et al. (1999), 100 O.T.C. 45; 43 O.R.(3d) 306 (Gen. Div.), refd to. [para. 40].

Donald v. Huntley Service Centre Ltd. (1987), 61 O.R.(2d) 257 (H.C.), refd to. [para. 40].

Naccarato v. Quinn (1994), 18 O.R.(3d) 155 (Gen. Div.), refd to. [para. 40].

Polowin (David) Real Estate Ltd. v. Dominion of Canada General Insurance Co. (2005), 199 O.A.C. 266; 76 O.R.(3d) 161 (C.A.), refd to [para. 46].

Cimino v. Dauber et al., [2013] O.T.C. Uned. 1609; 2013 ONSC 1609, refd to. [para. 50].

Case v. Coseco Insurance Co. (2011), 106 O.R.(3d) 472; 2011 ONSC 2499, refd to. [para. 50].

Hefferan v. Hefferan et al. (2008), 275 Nfld. & P.E.I.R. 48; 842 A.P.R. 48; 60 M.V.R.(5th) 232; 2008 NLTD 18, refd to. [para. 50].

Widdis v. Hall (1994), 21 O.R.(3d) 238 (Gen. Div.), refd to. [para. 51].

Mazur et al. v. Elias Estate et al., [2002] O.T.C. 586 (Sup. Ct.), revd. (2005), 196 O.A.C. 316; 75 O.R.(3d) 299 (C.A.), refd to. [para. 51].

Statutes Noticed:

Highway Traffic Act, R.S.O. 1990, c. H-8, sect. 192(2) [para. 19].

Counsel:

Sheldon A. Gilbert, Q.C., for the appellant;

L. Craig Brown and Stacey L. Stevens, for the respondent, Sara Fernandes;

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

This appeal was heard on June 18, 2015, by Sharpe, MacFarland, Rouleau, Lauwers and Pardu, JJ.A., of the Ontario Court of Appeal. On August 10, 2015, Sharpe, J.A., delivered the following judgment for the court.