Graham v. Lemay et al., (2016) 345 O.A.C. 27 (CA)

• Judge: Gillese, Pepall and Lauwers, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 08, 2015
• Jurisdiction: Ontario
• Citations: (2016), 345 O.A.C. 27 (CA);2016 ONCA 55

Graham v. Lemay (2016), 345 O.A.C. 27 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. JA.024

Jodi Graham and Colin J. Graham, by their litigation guardian, Cheryl Margaret Graham, Cheryl Margaret Graham, Joseph Raymond Graham and Christopher R. Graham (plaintiffs/appellants/respondents by way of cross-appeal) v. Karine Lianne Lemay, GMAC Leaseco Corporation, Mario Pietrantonio, West End Tile Ltd., Daimler Chrysler Financial Services Canada Inc. , Chevrolet West Inc., Capital Dodge Chrysler Jeep Limited, Luciano Pietrantonio, General Motors Corporation and the City of Ottawa and Chrysler Canada Inc . (defendants/ respondents / appellant by way of cross-appeal ) and CorePointe Insurance Company, formerly carrying on business as Daimler Chrysler Insurance (respondent/respondent)

(C59925; 2016 ONCA 55)

Indexed As: Graham v. Lemay et al.

Ontario Court of Appeal

Gillese, Pepall and Lauwers, JJ.A.

January 27, 2016.

Summary:

The plaintiff, Jodi Graham, was a passenger in a motor vehicle driven by Lemay. She suffered serious injuries as a result of a collision with a motor vehicle driven by Mario Pietrantonio. The Pietrantonio vehicle had been leased. In the lease, Daimler Financial Services Canada Inc. (Daimler Financial) was described as the lessor. At the time of the accident, Chrysler Canada Inc. (Chrysler) was the beneficial owner of the Pietrantonio vehicle. The plaintiffs commenced an action against various parties. Chrysler, Daimler Financial, and Capital Dodge moved for summary judgment dismissing the action against them. The plaintiffs brought a cross-motion seeking summary judgment and a declaration that Mario was an unnamed insured under Daimler Financial's excess insurance policy and that Chrysler and Daimler Financial were not entitled to the cap on liability of lessors as set out in s. 267.12(1) of the Insurance Act.

The Ontario Superior Court, in a decision with neutral citation 2015 ONSC 6821, determined that: Chrysler was an owner of the Pietrantonio vehicle within the meaning of s. 192(2) of the Highway Traffic Act; both Chrysler and Daimler Financial were lessors of the Pietrantonio vehicle and therefore entitled to the cap on liability provided by s. 267.12(1) of the Insurance Act; Mario was not an unnamed insured under Daimler Financial's excess insurance policy; and there was no genuine issue requiring a trial in respect of the plaintiffs' claim alleging negligent entrustment of the Pietrantonio vehicle against Daimler Financial and therefore that claim was dismissed. The plaintiffs appealed, challenging the latter three determinations. Chrysler cross-appealed, challenging the first determination.

The Ontario Court of Appeal dismissed the appeal and the cross-appeal.

Insurance - Topic 1006

The insurance contract - General - Unnamed insureds - Graham was a passenger in a motor vehicle driven by Lemay - She suffered serious injuries as a result of a collision with a motor vehicle driven by Pietrantonio - The Pietrantonio vehicle had been leased - In the lease, Daimler Financial Services Canada Inc. (Daimler Financial) was described as the lessor - At the time of the accident, Chrysler Canada Inc. (Chrysler) was the beneficial owner of the Pietrantonio vehicle - Graham commenced an action against various parties, including Chrysler and Daimler Financial - The parties brought motions for summary judgment - The motion judge determined, inter alia, that Pietrantonio was not an unnamed insured under Daimler Financial's excess insurance policy - Graham appealed that finding - Graham argued that if the court accepted that Daimler Financial was a lessor for the purposes of the Insurance Act, then the decision of Xu et al. v. Mitsui Sumitomo Insurance Co. et al., (2014 ONSC affd. 2014 ONCA) should be reconsidered and Pietrantonio treated as an unnamed insured under Daimler Financial's standard excess policy - The Ontario Court of Appeal held that Xu was not wrongly decided and was dispositive of the issue - The court stated that "McEwen J. [in Xu] accurately considered the legislative history and purpose of s. 267.12(1) [of the Insurance Act]. He correctly concluded that permitting a lessee to access a lessor's insurance, as an unnamed insured, would undermine the animating purpose of that provision. That analysis was upheld by this court, and the appellants have not presented any cogent reasons for revisiting that conclusion" - See paragraphs 65 to 75.

Insurance - Topic 5185.1

Automobile insurance - Compulsory government schemes - Uninsured or underinsured motorist coverage - Insured defined - [See Insurance - Topic 1006 ].

Motor Vehicles - Topic 54

Owner - Defined - [See Torts - Topic 307 ].

Torts - Topic 77

Negligence - Duty of care - Relationship required to raise duty of care - [See Torts - Topic 301 ].

Torts - Topic 301

Negligence - Motor vehicle - Liability of owner or lessor for negligence of driver of owner's vehicle - Permitting use by incompetent driver - The plaintiff, Graham, was a passenger in a motor vehicle driven by Lemay - She suffered serious injuries as a result of a collision with a motor vehicle driven by Mario Pietrantonio - The Pietrantonio vehicle had been leased - In the lease, Daimler Financial Services Canada Inc. (Daimler Financial) was described as the lessor - At the time of the accident, Chrysler Canada Inc. (Chrysler) was the beneficial owner of the Pietrantonio vehicle - The plaintiffs commenced an action against various parties, including Chrysler and Daimler Financial - The parties brought motions for summary judgment - The motion judge determined, inter alia, that there was no genuine issue requiring a trial in respect of Graham's claim alleging negligent entrustment of the Pietrantonio vehicle against Daimler Financial and therefore that claim was dismissed - The plaintiffs appealed - The Ontario Court of Appeal dismissed the appeal - The vehicle was leased not to Mario but to West End Tile Limited and Luciano Pietrantonio - The motions judge concluded that a duty on Daimler Financial to ascertain the competency of the driver of the vehicle was too remote - It was reasonable for the lessors to rely on the insurance that had been obtained by the lessees - On this basis, the motions judge correctly concluded that there was no genuine issue requiring a trial on the issue of negligent entrustment - Finding a duty of care in this case would lead to the conclusion that the lessor had an obligation to inquire into who would be driving the vehicle - The relationship between the plaintiffs and Daimler Financial did not disclose proximity sufficient to justify imposing a duty - The motions judge properly concluded that Daimler Financial had met its evidentiary burden and that there was no genuine issue requiring a trial on the claim of negligent entrustment - See paragraphs 76 to 84.

Torts - Topic 303

Negligence - Motor vehicle - Liability of owner or lessor for negligence of driver of owner's vehicle - Meaning of "lessor" - Graham was a passenger in a motor vehicle driven by Lemay and suffered serious injuries as a result of a collision with a motor vehicle driven by Pietrantonio - The Pietrantonio vehicle had been leased - In the lease, Daimler Financial Services Canada Inc. (Daimler Financial) was described as the lessor - At the time of the accident, Chrysler Canada Inc. (Chrysler) was the beneficial owner of the Pietrantonio vehicle - Graham commenced an action against various parties, including Chrysler and Daimler Financial - The parties brought motions for summary judgment - The motion judge determined, inter alia, that both Chrysler and Daimler Financial were lessors of the Pietrantonio vehicle and therefore entitled to the cap on liability provided by s. 267.12(1) of the Insurance Act - Graham appealed that finding - The Ontario Court of Appeal stated that "the language of s. 267.12(1), its legislative purpose, and the agreements between Chrysler and Daimler Financial all supported the motions judge's conclusion that Chrysler was a lessor within the meaning of that subsection and was therefore entitled to the cap on liability. There is nothing that would cause one to conclude that a beneficial owner of the motor vehicle and the lease is not, or should not be considered, a lessor. It remains to be considered whether Daimler Financial was also a lessor. The appellants submit that s. 267.12(1) does not speak of an administrator of a lease and as such, Daimler Financial was not entitled to benefit from the cap on liability. I do not agree. Daimler Financial retained legal title to the Pietrantonio vehicle. Section 267.12 (1) speaks of 'the maximum amount for which the lessor or lessors of the motor vehicle are liable in respect of the same incident in their capacity as lessors of the motor vehicle'. Clearly the statute contemplates multiple lessors. Furthermore, by virtue of the assignment to Daimler Financial from Capital Dodge, the lease itself described Daimler Financial as lessor. The appellants have failed to identify any error in the motions judge's analysis on the application of s. 267.12(1) to Daimler Financial." - See paragraphs 41 to 64.

Torts - Topic 307

Negligence - Motor vehicle - Liability of owner or lessor for negligence of driver of owner's vehicle - Meaning of "owner" - Graham was a passenger in a motor vehicle driven by Lemay and suffered serious injuries as a result of a collision with a motor vehicle driven by Pietrantonio - The Pietrantonio vehicle had been leased - In the lease, Daimler Financial Services Canada Inc. (Daimler Financial) was described as the lessor - At the time of the accident, Chrysler Canada Inc. (Chrysler) was the beneficial owner of the Pietrantonio vehicle - Graham commenced an action against various parties, including Chrysler and Daimler Financial - The parties brought motions for summary judgment - The motion judge determined, inter alia, that Chrysler was an owner of the Pietrantonio vehicle within the meaning of s. 192(2) of the Highway Traffic Act - Chrysler appealed that finding - Chrysler argued that the motions judge erred in finding that Chrysler, as a non-registered owner of the Pietrantonio vehicle, was vicariously liable for the alleged negligence of Pietrantonio pursuant to s. 192(2) - It submitted that a non-registered owner would be vicariously liable for the negligence of the person operating the vehicle only if the non-registered owner exercised dominion and control over the vehicle - The Ontario Court of Appeal held that the motion judge did not err - The language of s. 192(2) of the Highway Traffic Act spoke of an owner and did not reflect any distinction between non-registered and registered owners - Nor did it impose any dominion and control requirement - Dominion and control might result in a finding of ownership in the case of a non-registered owner, but other factors might also lead to that conclusion - Chrysler admitted that it was the non-registered owner of the Pietrantonio vehicle - Moreover, its conduct was consistent with that admission - The agreements between Daimler Financial and Chrysler explicitly stated that Chrysler was the beneficial owner - In these circumstances, it was unnecessary for the motions judge to engage in any additional analysis on dominion and control - See paragraphs 32 to 40.

Torts - Topic 312

Negligence - Motor vehicle - Liability of owner or lessor for negligence of driver of owner's vehicle - Liability for acts of lessee - [See Torts - Topic 301 and Torts - Topic 307 ].

Torts - Topic 2644

Vicarious liability - Particular persons - Motor vehicle owner - [See Torts - Topic 307 ].

Cases Noticed:

Xu et al. v. Mitsui Sumitomo Insurance Co. et al., (2014), 119 O.R.(3d) 587; 2014 ONSC 167 (Sup. Ct.), affd. [2014] O.A.C. Uned. 720; 42 C.C.L.I.(5th) 17; 2014 ONCA 805, folld. [para. 22].

Cella v. McLean (1997), 101 O.A.C. 76; 34 O.R.(3d) 327 (C.A.), refd to. [para. 26].

Schulz v. Leeside Developments Ltd. (1978), 90 D.L.R.(3d) 98 (B.C.C.A.), refd to. [para. 26].

Wynne v. Dalby (1913), 16 D.L.R. 710 (Ont. C.A.), refd to. [para. 32].

Hayduk v. Pidoborozny, [1972] S.C.R. 879, refd to. [para. 36].

Honan v. Gerhold and Doman Estate, [1975] 2 S.C.R. 866; 3 N.R. 81, refd to. [para. 38].

Kerri v. Decker et al. (2002), 209 Nfld. & P.E.I.R. 252; 626 A.P.R. 252; 2002 NFCA 11, refd to. [para. 38].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 47].

Canadian Acceptance Corp. v. Regent Park Butcher Shop Ltd. (1969), 3 D.L.R.(3d) 304 (Man. C.A.), refd to. [para. 57].

R. v. Labrecque (B.), [2011] O.A.C. Uned. 328; 2011 ONCA 360, refd to. [para. 72].

Ontario (Attorney General) v. Collins, [2012] O.A.C. Uned. 93; 2012 ONCA 76, refd to. [para. 73].

Vynckier v. Brown and State Farm, 2015 ONSC 376, refd to. [para. 79].

Persaud et al. v. Suedat et al., [2012] O.T.C. Uned. 5232; 96 C.C.L.T.(3d) 147; 2012 ONSC 5232 (Sup. Ct.), refd to. [para. 79].

Ladouceur v. Zimmerman, [2009] O.J. No. 4777, refd to. [para. 79].

Ahmetspasic v. Love et al., [2002] O.T.C. Uned. 996; 2002 CarswellOnt 4475 (Sup. Ct.), refd to. [para. 79].

British Columbia v. Imperial Tobacco Canada Ltd. et al., [2011] 3 S.C.R. 45; 419 N.R. 1; 308 B.C.A.C. 1; 521 W.A.C. 1; 2011 SCC 42, refd to. [para. 81].

Childs v. Desormeaux et al., [2006] 1 S.C.R. 643; 347 N.R. 328; 210 O.A.C. 315; 2006 SCC 18, refd to. [para. 81].

Statutes Noticed:

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

Insurance Act, R.S.O. 1990, c. I-8, sect. 267.12(1) [para. 2].

Counsel:

William J. Sammon, for the appellants/respondents by way of cross-appeal;

David A. Zuber, for the respondents, Daimler Chrysler Financial Services Canada Inc. and CorePointe Insurance Company;

W.S. Chalmers, for the respondent/appellant by way of cross-appeal, Chrysler Canada Inc.

This appeal and cross-appeal were heard on September 8, 2015, before Gillese, Pepall and Lauwers, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Pepall, J.A., on January 27, 2016.