The appellants appealed a small claims court decision ordering them to pay $5,628.41 for damage to a rental car provided to the appellant driver as a temporary substitute automobile.
The driver was entirely not at fault for the accident.
The Divisional Court allowed the appeal, holding that section 263(5)(a.1) of the Insurance Act extinguished the rental company's right of action against the driver under the rental agreement because he was not at fault.
The court also rejected the rental company's argument that it could claim directly against the driver's insurer, concluding that the statutory scheme requires the rental company to look to its own insurer for compensation.
