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Man handing over car keys

Kristopher O’Connell (the insured) was 23 years of age and had been dating Jessica Smith for 5 months when she asked to borrow his vehicle in order to move her cat and some items to her new apartment.

Kristopher knew that she had a driver’s licence because he had seen her showing it to gain entry into bars and clubs when they would go out.  According to evidence in the case, she was apparently quite youthful looking in appearance and was therefore asked on many occasions to show proof of age.

He does not recall ever having asked her what type of licence it was and she never said anything to him about her licence.  He had driven with her when she was behind the wheel and she had gone so far as to tell him anecdotes which involved her being the driver of a vehicle.

Therefore when she asked to borrow his car to assist in her move, he agreed to lend it to her and arranged that she would drive him to work and then carry on to her new apartment with the items she was moving.

Unfortunately Jessica was involved in an accident on Highway 417.  Jessica had been driving with a G1 licence.  She had never advised Kristopher that she only had a G1 licence before the accident and, in fact, did not even disclose this to him in the immediate aftermath of the accident.  As a G1 licenced driver, she was precluded from driving on 400 series highways and, more importantly, would have had to have a fully licenced driver with her when she was driving.

She admitted that she had never advised Kristopher that she only had a G1 licence because she was embarrassed that at 23 years of age she did not have her full driver’s licence.

Kristopher’s position is that he had taken reasonable and prudent precautions to see that the statutory condition was not contravened and that he had met the onus on him and is entitled to a full defence and indemnity under the policy.

The insurer’s position was that the insured must take reasonable, proactive steps to ensure any driver driving his or her vehicle has a valid licence and that, in this case, the insured, on the facts, in essence took no steps.

The question was:  Prior to lending his vehicle, did Kristopher take reasonable precautions to see that he was not in violation of the statutory condition which stated “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.”  – Ontario Regulation 777/93 to the Insurance Act, s.4(1)

In this case it is not whether Kristopher had a valid licence but, rather, whether he permitted any other person to drive or operate the vehicle when that person was not authorized by law to do so.

Case law indicates that the test to determine permission is whether the facts establish that the insured took all “reasonable and prudent precautions” to see that the statutory condition was not contravened.  An insured would, of course, contravene the condition if he or she knew the individual was not authorized to drive or was willfully blind to that fact.

In the appeal case of Miller (Litigation Guardian of) v. Carluccio  in part states …We think the word “permits” connotes knowledge, wilful blindness, or at least a failure to take reasonable steps to inform one’s self of the relevant facts…

In this case there was no evidence that Kristopher had knowledge or was willfully blind to Jessica’s driver’s licence status.

The next issue is whether or not he took reasonable steps to inform himself as to her status.  The case law clearly establishes that the relationship of the insured to the driver is an important factor.

The judge considered the following factors:

  1. The insured and the driver were boyfriend and girlfriend and had been for about five months.  The judge found that this was a relationship of trust.
  2. The insured knew that the driver had a licence because he had seen her use that licence as a means of official identification, and it looked no different from his own licence.  It had been established that a full G class licence and a G1 class licence appear visually identical except for a small letter on the front of the licence.
  3. The insured had been in the car with the driver when she was driving and heard anecdotes involving driving.
  4. The driver had never informed the insured at any time prior to the accident, including the day she borrowed the car, that her licence had limitations.  There was no evidence that he had any basis to suspect that she would withhold that crucial information from him.

Having considered all of these facts, the judge felt that Kristopher had acted as reasonably and prudently as would any other average individual in similar circumstances and therefore did not contravene the statutory condition.

If you have any questions related to this issue or any insurance law related issue, please contact me directly.

Donna Robinson CIP

Full text on reasons for the decision can be found at:

Citation: O’Connell v. The Personal Insurance Company, 2014 ONSC 1469

Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions. Any use of this document does not constitute a lawyer-client relationship.

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