A Cautionary Tale for Vehicle Co Owners: ONCA Rules One Owner’s Consent Binds All

INTRODUCTION

The Ontario Court of Appeal (“ONCA”) upheld a motion judge’s decision that a co-owner of a motor vehicle is liable for loss or damage arising from negligent operation where another co-owner has consented to a non-owner’s use of the vehicle, even if the first co-owner did not. Nowakowski v Campbell, 2025 ONCA 762 (CanLII)[1] establishes that if either co-owner has consented to the possession of the jointly owned vehicle by a non-owner, both are vicariously liable pursuant to s. 192(2) of the Highway Traffic Act[2] (“HTA”).

FACTUAL BACKGROUND

The defendants, Alison Malcolm and Shawn Le Brun, were jointly registered owners of a Dodge Pick-up truck (the “Vehicle”).[3] Malcolm held a policy of insurance for the vehicle through Economical.[4] Le Brun was not named as an insured or a listed driver on the policy.[5]

Katrina Campbell was a third-party who was involved in a motor vehicle accident while operating the Vehicle.[6] This motor vehicle accident was the subject of the plaintiff, Sarah Nowakowski’s, initial claim. Campbell was not a named insured or a listed driver under Malcolm’s Economical policy.[7] More importantly, Campbell and Malcolm never discussed Campbell’s possession and/or operation of the Vehicle.[8] Le Brun allegedly was the one who allowed Campbell to drive the vehicle, although it is disputed whether such consent was actually provided by Le Brun. This issue of fact was not to be determined at this stage.[9]

The plaintiff commenced an action seeking damages against Malcolm, Le Brun, Campbell, and the plaintiff’s insurer, Allstate Insurance.

POSITION OF THE PARTIES

Economical and Allstate dispute whether the Economical Policy insured Malcolm against the plaintiff’s claim. According to Economical, Malcolm’s personal consent to Campbell’s possession of the vehicle was a requirement to ground liability under s.192(2) of the HTA. They further argue that Malcolm’s personal consent was required for the Economical Policy to respond pursuant to s.239(1) of the Insurance Act.

CONCLUSION OF THE MOTION JUDGE

The motion judge, Justice Ten Cate, disagreed with Economical. Justice Ten Cate held that the Economical Policy provided insurance coverage for the plaintiff’s claim against Malcolm on the basis of either s.192(2) of the HTA and/or s.239(1) of the Insurance Act.

Economical appealed the decision of Justice Ten Cate. They sought a declaration that, where a situation involves two or more owners of a motor vehicle, any owner who does not provide consent to the possession or operation of the motor vehicle by a non-owner is not vicariously liable under s.192(2) of the HTA and their motor vehicle policy is not engaged under s.239(1) of the Insurance Act.

ISSUE ON APPEAL

The issues on appeal are pure questions of law requiring an interpretation of provisions in the HTA and the Insurance Act. Overall, the ONCA, consisting of Justice Monahan, Justice Huscroft, and Justice Coroza, needed to determine, on a correctness standard, whether Justice Ten Cate erred in finding that a co-owner of a motor vehicle is liable for loss or damage resulting from the negligent operation of a motor vehicle where a second co-owner consented to the use of the vehicle by a third-party, not previously consented to by the first owner.

ANALYSIS

Vehicle Owner’s Liability Under s.192(2) of the HTA

According to s. 192 of the HTA, the owner of a motor vehicle is liable for accidents caused by its operation. Subsection (2) provides an exception to this rule stating,

192(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.[10]

Although the owner of a motor vehicle has the right to grant possession of the vehicle over to another person, s.192(2) encourages owners to exercise this power with caution in placing the legal responsibility on them for loss to others that was caused by the negligent operation of the vehicle.[11]

The opening words of s.192(2) references “the owner” which the ONCA has clarified includes “the owners” in circumstances where a vehicle has more than one owner. Therefore, it does not provide for only one owner being held liable under the provision because the liability of one will engage the liability of others.[12]

The ONCA disagreed with Economical’s reliance on Barham v Marsden[13] because Barham proceeded with the assumption that an owner of a motor vehicle is subject to vicarious liability under s.192(2) only where personal consent to the possession and operation of the vehicle to a non-owner is given.[14] Instead, the ONCA pointed to authorities[15] that indicate no such personal consent is necessary to trigger the owner’s vicarious liability under s.192(2).[16]

The ONCA concluded that if Le Brun consented to Campbell’s possession and operation of the Vehicle, then both co-owners would be found to be vicariously liable for any loss or damage

Section 239(1) of the Insurance Act and the Identification of Liabilities

The ONCA found that the motion judge erred in her interpretation of s.239(1) of the Insurance Act.

Section 239(1) of the Insurance Act provides as follows:

239(1) Subject to section 240, every contract evidenced by an owner’s policy insures the person named therein, and every other person who with the named person’s consent drives, or is an occupant of, an automobile owned by the insured named in the contract and within the description or definition thereof in the contract, against liability imposed by law upon the insured named in the contractor that other person for loss or damage,

(a) arising from the ownership or directly or indirectly from the use or operation of any such automobile; and

(b) resulting from bodily injury to or the death of any person and damage to property. [Emphasis added.][17]

Section 239(1) allows for an owner’s policy to insure the named person and anyone else who drives their vehicle with their consent. The ONCA clarified that the purpose of s.239(1) was “not to impose liability upon an owner but simply to identify the liabilities otherwise “imposed by law, which must be covered by the owner’s insurance policy.”[18] The motion judge was incorrect to conclude that s.239(1) required the insured co-owner’s policy to cover losses suffered by the plaintiff, even if that co-owner was not liable for such losses under s.192(2) of the HTA.

The ONCA held that if one co-owner consented to the third party operating the vehicle, then the other co-owner is vicariously liable under s.192(2) of the HTA for any loss or damage caused by the third party’s negligence. This would be considered a liability imposed by law upon the insured and would require coverage by the insured co-owner’s insurance policy, in accordance with s.239(1) of the Insurance Act.

Ultimately, this error by the motion judge created no difference in the circumstances. Both co-owners would be vicariously liable under s.192(2) of the HTA if either co-owner consented to the non-owner’s possession or operation of the jointly owned vehicle. Section 192(2) does not treat owners as “separate pillars” nor does it require an independent assessment of their vicarious liability.

TAKEAWAY

This case broadens the risk of liability where vehicles are jointly owned. Consent of the possession and/or use of the vehicle is only required by one co-owner in order to trigger liability across all owners where loss or damage may occur as a result of negligence. Therefore, even where one co-owner consents to a non-owner using the vehicle without the other co-owner’s permission or knowledge, all owners may be held liable for any loss or damage caused by the negligence of the non-owner party.

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