Big difference between possession and operation

This article offers important insight regarding the difference between possession and ownership when it comes to determining vicarious liability for owners under the Highway Traffic Act – and why it’s important to consider both sides of the story.

Having devoted her practice largely to fighting for victims who have suffered injuries due to car, motorcycle and slip and fall accidents, Stacey Steven’s expert insight will provide beneficial support to all future cases pertaining to this matter.

In his ruling last Nov. 4 in Fernandes v. Araujo [2014] O.J. No. 5248, Justice Paul Perell held that a motor vehicle owner’s vicarious liability, imposed under sections 192(1) and (2) of the Highway Traffic Act for the loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle, is triggered once consent to possession of the vehicle is given, as opposed to consent to operate.

In the case, Sara Fernandes was injured on May 26, 2007, after the driver of an all-terrain vehicle (ATV) in which she was a passenger lost control while driving on a highway. There is no dispute that the owner of the ATV consented to the driver’s possession of the vehicle and permitted its operation on his farm property. There was no evidence the owner expressly prohibited the driver from taking the ATV off his property.

Section 192(1) of the HTA provides that an owner of a motor vehicle is not vicariously liable for negligence in the operation of his/her motor vehicle on a highway, unless the motor vehicle was, without the owner’s consent, in the possession of some person other than the owner.

Section 192(1) has been interpreted in two arguably conflicting Court of Appeal decisions: Newman and Newman v. Terdik [1952] O.J. No. 477, and Finlayson v. GMAC Leaseco Ltd. [2007] O.J. No. 3020.

In Newman, the defendant Terdik owned a tobacco farm. He gave his employee Perkinson possession of his farm truck for the sole purpose of driving it on the farm, with express instructions not to take it on the highway. Perkinson took the truck on the highway and subsequently injured the plaintiff Newman. The trial judge and the Court of Appeal held that given Terdik expressly forbade Perkinson from driving the truck on the highway, there was no consent to Perkinson’s possession, and therefore Terdik was not vicariously liable.

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