Court of Appeal for Ontario

Date: August 19, 2019 Docket: C66400

Judges: Paciocco, Harvison Young and Zarnett JJ.A.

Between

Krista McKay, Wendy McKay and Jack McKay Plaintiffs

and

Sarah Elizabeth Park, Giancarlo Hnatiuk and TD Home and Auto Insurance Company Defendants (Appellant) (Respondent)

Counsel

Sheldon A. Gilbert, for Sarah Elizabeth Park

Irina Sfranciog and Rachel Pano, for TD Home and Auto Insurance

Heard: August 12, 2019

On appeal from the judgment of Justice H. McArthur of the Superior Court of Justice, dated December 7, 2018.

Reasons for Decision

Overview

[1] During an argument with Sarah Elizabeth Park, Giancarlo Hnatiuk reached over from the passenger's seat, grabbed, and pulled the wheel of Ms. Park's automobile, which Ms. Park was operating. Almost instantaneously, the automobile collided with a vehicle carrying Krista McKay. Ms. McKay was seriously injured. Ms. McKay and her family members sued both Mr. Hnatiuk and Ms. Park. Against Ms. Park, the McKays alleged that she was negligent and that she was responsible for the negligence of Mr. Hnatiuk under the Highway Traffic Act, R.S.O. 1990, c. H.8, s. 192. Section 192(2) provides vicarious liability for owners due to negligence in the operation of their motor vehicles "unless the motor vehicle … was without the owner's consent in the possession of some person other than the owner".

[2] Ms. Park sought summary judgment under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 20, dismissing the McKays' action against her. Ms. Park also moved under a r. 21 motion for a determination before trial that Mr. Hnatiuk is not entitled to indemnity under Ms. Park's motor vehicle policy issued by State Farm Mutual Automobile Insurance Company [State Farm]. The insurer of Ms. McKay's vehicle, TD Home and Auto Insurance Company [TD Home], defended against both motions, but both were granted.

[3] TD Home now appeals both decisions, raising several grounds of appeal. For the following reasons, we dismiss the r. 20 appeal, but allow the r. 21 appeal. We also deny leave to TD Home to appeal the costs order below and dismiss that appeal. However, because of the mixed success in the r. 20 and r. 21 motions in light of this decision, we adjust the costs order as described below.

The Rule 20 Appeal Against Summary Judgment

[4] TD Home argues that the motion judge erred by placing the onus on Ms. McKay to show there was a genuine issue requiring trial, when the onus should have been on Ms. Park, who brought the summary judgment motion, to show there was not a genuine issue requiring trial. This submission is based on the facts that: (1) the motion judge did not expressly identify who bore the burden; and (2) she structured her decision by addressing only the McKays' arguments as to why there was a genuine issue requiring trial.

[5] We would not give effect to this ground of appeal. The motion judge is presumed to know the law. It is not necessary for a judge to rehearse in every case who bears the burden. Nor is there any indication that the motion judge got the onus wrong. Her decision to focus only on the areas of contention when explaining her conclusion that there is no genuine issue requiring trial is understandable and appropriate.

[6] TD Home also argues that the motion judge erred by not applying the law of possession properly. In effect, it is TD Home's position that despite Mr. Hnatiuk's act of seizing the steering wheel, Ms. Park remained in possession of the automobile and is therefore vicariously liable under s. 192 of the Insurance Act. They claim that the motion judge erred by not recognizing her possession or joint possession.

[7] We would not give effect to this ground of appeal. As Strathy J. (as he then was) observed in Seegmiller v. Langer, 301 D.L.R. (4th) 454 (Ont. S.C.J.), at para. 34, "[t]he primary definition of possession contemplates power, control or dominion over property" (citation omitted). In addressing TD Home's argument that Ms. Park had possession of the vehicle, the motion judge disagreed, finding that by seizing the wheel, Mr. Hnatiuk "took control of the car" away from her. We see no palpable and overriding error in this finding of fact or in the motion judge's failure to use the word "possession" when expressing her ruling. It is obvious this is what she meant.

[8] Moreover, under the terms of s. 192(2) of the Highway Traffic Act, vicarious liability arises unless "the motor vehicle … was without the owner's consent in the possession of some person other than the owner". TD Home does not contest that Mr. Hnatiuk, who is not the owner, was at least in joint possession of the motor vehicle, and the motion judge found on uncontested evidence that Mr. Hnatiuk's act of taking control of the motor vehicle (which gave him possession) was without Ms. Park's consent. The exemption from vicarious liability under s. 192(2) therefore applies. This outcome makes sense since the purpose of vicarious liability is to have owners assume the risk of those they have entrusted with their motor vehicle: Thompson v. Bourchier, [1933] O.R. 525 (C.A.). At no time did Ms. Park entrust Mr. Hnatiuk with her motor vehicle. She should not bear vicarious liability.

[9] TD Home also claims that the motion judge erred in finding that Ms. Park's negligence was not a genuine issue requiring trial. In essence, TD Home offers three theories of negligence: (1) Ms. Park was negligent in operating a motor vehicle while Mr. Hnatiuk was agitated in the front passenger's seat, knowing his volatile and impulsive character; (2) Ms. Park was negligent in driving while distracted by the emotion of the argument; and (3) Ms. Park was negligent in her manner of operation.

[10] The motion judge was entitled on the evidence before her to find that there was no genuine issue requiring trial on each of these alleged negligence theories. She was entitled on the evidence to find that it was not foreseeable that Mr. Hnatiuk would grab the wheel. She was also entitled to find that any agitation Ms. Park may have had did not contribute to the accident; the only evidence was that Ms. Park had been driving without incident until Mr. Hnatiuk grabbed the wheel. And the motion judge was entitled to find that Mr. Hnatiuk "took control of the car". This finding, which was inevitable on the evidence, coupled with her finding that Mr. Hnatiuk's act was not foreseeable, puts an end to any realistic negligence claims against Ms. Park.

[11] TD Home also urges that the motion judge erred by not addressing Ms. Park's argument that she was bound by the factual findings underlying Mr. Hnatiuk's prior related criminal convictions for operating the motor vehicle, and leaving the scene of the accident having had "care, charge or control" of the motor vehicle. Since it was Ms. Park who stood to benefit from reliance on these findings, the theory of this ground of appeal must be that the motion judge may have, without saying so, accepted that she was constrained by them. We do not accept this. There is no indication that the motion judge absolved Ms. Park of liability because Mr. Hnatiuk had been found in a prior criminal proceeding to have operated or had "care, charge or control" of the motor vehicle. Indeed, it is evident from her reasons for decision that she decided the motion based on her own evaluation of the evidence.

[12] We also disagree with TD Home's contention that the motion judge did not give adequate reasons relating to the r. 20 decision. The motion judge was not obliged to refer to all the evidence that she considered in order to show her path to the decision. Her r. 20 decision was explained adequately to enable appellate review.

[13] The r. 20 appeal is therefore dismissed.

The Rule 21 Appeal Against State Farm's Indemnity Obligation

[14] The motion judge allowed the r. 21 motion although there is continuing controversy about what she ordered. The request was for a determination that Mr. Hnatiuk is not entitled to indemnity under Ms. Park's State Farm policy. The judgment stated that the purpose of the motion was for a determination that Mr. Hnatiuk is "not an insured", but her actual determination in both the judgment and Endorsement is that Mr. Hnatiuk is not "covered". We need not resolve what the motion judge ordered or whether her deviation from the technical language of the Insurance Act constitutes error because the motion judge's r. 21 determination must be set aside, for two reasons.

[15] First, the motion judge gave no meaningful explanation for the reasoning path she took in coming to her decision. The respondent's counsel made complex and layered submissions as to why s. 239(1) of the Insurance Act would not provide insurance to Mr. Hnatiuk as an occupant of the motor vehicle. He focused on whether Mr. Hnatiuk lost his status as an occupant as the result of his act of grabbing the steering wheel, as well as the impact that s. 1.8.2 of the Ontario Automobile Policy-Owner's Policy would have on the application of s. 239(1). In her r. 21 decision, the motion judge refers to no statutory or Policy provisions and does not identify the law or any provisions of the applicable Policy that she relies upon. The heart of the motion judge's brief reasons is that her finding that Mr. Hnatiuk grabbed the steering wheel without Ms. Park's consent "leads to the inevitable conclusion that Mr. Hnatiuk would not be covered by Ms. Park's insurance". With respect, this explanation does not provide a path to the motion judge's reasoning sufficient to enable appellate review. The motion judge therefore erred in law.

[16] Second, we are not persuaded that this was a proper r. 21.01(1)(a) motion. Such motions are to resolve questions of law raised by pleadings, and without leave, no evidence is admissible on such a motion. As the motion judge's decision reflects, she did not make her decision based on a question of law raised by the pleadings, but rather on evidence from the r. 20 motion. And it is not clear that the applicable Policy terms were put into evidence.

[17] We therefore allow the r. 21 appeal and set aside that decision. Our conclusion is not a disposition of the merits of the issue raised by the r. 21 motion. The parties are at liberty to bring such further proceedings as appropriate to have that issue determined.

Costs

[18] TD Home seeks leave to appeal the motion judge's costs award, which ordered it to pay costs of the motions and action in the sum of $50,000 all inclusive.

[19] We would not grant leave to appeal. The award is not tainted by any error in principle nor is it plainly wrong so as to warrant appellate intervention: Johnson v. Marzouca, 2016 ONCA 298, 130 O.R. (3d) 795 (C.A.), at para. 13. Costs of the action were appropriately included in the disposition of costs, since success on the r. 20 motion involved dismissal of the action. TD Home participated in steps of the action and it was not inappropriate for it to bear those costs as well as the costs of the motions it was resisting. We note that the costs awarded were less than what was requested by the successful party, and the amount is not so high in light of the nature of the case as to suggest any failure to appreciate the relevant principles on the part of the motion judge.

[20] Although we do not grant leave to appeal, by reason of our disposition of the appeal concerning the r. 21 appeal, the order below has been the subject of a variation. Since the r. 21 motion should not have been granted, the respondent should not have received costs for that motion. We therefore reduce the motion judge's order for costs to the all-inclusive sum of $40,000 to reflect her lack of success on that motion.

[21] Success has been divided on the appeal, but the respondent has enjoyed the greater measure of success. We award costs of the appeal to the respondent in the sum of $20,000 inclusive of disbursements and applicable taxes.

"David M. Paciocco J.A." "Harvison Young J.A." "B. Zarnett J.A."