SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 18170/10

DATE: 2013-03-28

RE: Samantha Cimino, Leonard Cimino, and Santo Cimino Plaintiffs

AND:

David Dauber and Eric Dauber, Defendants

Cooperators General Insurance Company

BEFORE: The Honourable Mr. Justice Robert Nightingale

COUNSEL:
Paul Omeziri, Counsel, for the Defendant Eric Dauber

Peter Sheppard, Counsel, for the Defendant Cooperators General Insurance Company

HEARD: February 26, 2013

ENDORSEMENT

[1] The Defendant Eric Dauber was the registered owner of a 1992 Mazda motor vehicle driven by his son the co-defendant David Dauber on a highway on February 24, 2004 when it struck the pedestrian Plaintiff Samantha Cimino. He brings this motion for summary judgment under Rule 20 of the Rules of Civil Procedure requesting an order dismissing the Plaintiffs’ action as against the Defendant Eric Dauber on the basis that David Dauber was operating the vehicle at the time of the accident without Eric Dauber’s express or implied consent.

[2] The motion is opposed by the Defendant Co-operators General Insurance Company, the Plaintiffs’ insurance company which provides uninsured/underinsured coverage for the Plaintiffs’ damages if the Defendant driver David Dauber is accordingly uninsured in the event that defence is successful. The Plaintiffs did not appear on this motion and I understand their position is being advanced by Co-operators on their behalf.

Rule 20 Summary Judgment Motion

[3] The provisions of Rule 20 were considered by the Ontario Court of Appeal in Combined Air Mechanical Services Inc. V. Flesch 2011 ONCA 764. The Court confirmed that the purpose of Rule 20 is to eliminate unnecessary trials and that of the cases amenable to summary judgment, one involved defences that were shown to be without merit and another in which the trial process is not required in the interest of justice. Regarding the latter category, the Court applied a “full appreciation test” in determining whether or not a trial is required in the interest of justice.

[4] Rule 20 specifically allows the motions judge to weigh the evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence in determining whether there is a genuine issue requiring a trial. The Court in Combined Air confirmed that both parties were required to put their best foot forward on a motion for summary judgment and must provide all evidence on which they intend to rely and cannot suggest that there may be other evidence available which might assist in establishing its claim or defence.

[5] The Defendant Eric Dauber filed affidavit evidence of himself and his wife Veronica Dauber and a student at law in the Defendant’s law firm. Co-operators filed responding affidavit material. The Defendant David Dauber did not file a Statement of Defence in the main action but has not been noted in default. The deponents have been cross-examined on their affidavits and relevant excerpts from the transcripts of those cross- examinations have been provided to the Court on this motion in the Co-operators factum.

Position of Eric Dauber

[6] The Plaintiffs’ statement of claim alleges that the Defendant David Dauber was at all material times the operator of the 1992 Mazda motor vehicle and that the Defendant Eric Dauber was at all material times the owner of that vehicle when she was struck as a pedestrian crossing a street in Hamilton on February 24th, 2004.

[7] The Plaintiffs state in the Statement of Claim that the accident was caused by the negligence of the Defendant David Dauber for which “in law the Defendant Eric Dauber is at law” responsible. They plead and rely on the provisions of the Highway Traffic Act.

[8] The Defendant Eric Dauber delivered his Statement of Defence stating that no consent or permission (whether implied or expressed) was provided to David Dauber to operate the subject vehicle and that as such, Eric Dauber denied any liability as owner of the vehicle involved in the subject accident. Eric Dauber admitted the allegation in the Statement of Claim that he was at all material times the owner of the 1992 Mazda motor vehicle.

[9] Eric Dauber’s affidavit confirmed he is 61 years of age and that at the time of the accident the 1992 Mazda was registered to and owned by him but was being operated by his 17-year-old son David. David was residing with him and his wife and other children at the time.

[10] Eric Dauber’s evidence was that on the date of the accident there were four cars in his household. Two were principally driven by his two older children who also lived in the household. A 1993 Sunbird was principally driven by Eric Dauber. He swore that this 1992 Mazda was driven by his wife Veronica and on occasion by him but that his son David Dauber would also drive it while practicing for his G2 driving license when another licenced family member was with him in the car.

[11] Eric Dauber’s sworn evidence was that he purchased the Mazda in the latter part of 2003 from an individual in Burlington, Ontario and that the vehicle was then certified and had no mechanical problems prior to the accident. He swore that the main thought when this Mazda was specifically purchased was that it was to be transferred into his son David’s name for his use once he got his G2 license. David was in fact due to take that G2 drivers test only three days after the accident on February 27, 2004.

[12] When Veronica Dauber was cross-examined on her affidavit, she also admitted that the Mazda motor vehicle was specifically purchased to be transferred into David Dauber’s name once he got his G2 license for his own use and that was the reason why it was bought. It was understood that when he got his G2 license he would drive the vehicle on his own.

[13] She also admitted that her son David was fairly involved with the actual selection of the vehicle which makes sense as the vehicle was meant to be his in the first place.

[14] David Dauber initially gave a statement to an insurance adjuster on May 18, 2004 shortly after the accident. He also was cross-examined on that statement and admitted that the Mazda was specifically purchased for him and for his use primarily so that he could operate it on his own when he got his G2 license at the end of February 2004. There was the understanding that once he got his G2 license, the vehicle would simply be transferred into his name.

[15] He stated that he didn’t recall paying for any part of the vehicle initially when it was purchased but he did work with his father Eric Dauber to pay him back which I inferred meant the purchase price of that vehicle initially paid by Eric Dauber.

[16] Eric Dauber’s affidavit suggested that because his son David had not yet earned his G2 license his wife Veronica Dauber became the principal driver of this Mazda although he conceded that she regularly took the bus to work and only drove the Mazda occasionally. He said he would drive it occasionally but I conclude that he rarely did so as he was the principal driver of a 1993 Sunbird.

[17] The affidavit of Veronica Dauber was that she primarily used the bus to go to work but that her husband and she drove that Mazda only about two or three times per week prior to the accident.

David Dauber’s Own Set of Keys

[18] One of the main issues in this case is whether David Dauber always had his own set of keys for that vehicle prior to the accident. As part of the evidence filed on behalf of Eric Dauber, the law student at the Defendant’s law firm swore an affidavit referring to David Dauber having provided a detailed written and signed statement on or before May 18, 2004 intending to rely on portions of that statement that David Dauber knew that he was not allowed to drive that vehicle on a roadway without another driver present because of his only having a G1 license. However, that statement makes it very clear that David Dauber had his own set of keys to that vehicle at the time of the accident and that there were two other sets of keys with one set hanging by the front door of his parent’s house.

[19] Although Eric Dauber’s initial affidavit suggested that they were two sets of keys for the Mazda with one set being placed on a hanger near the door at his home and with his having another set of keys on his keychain, in cross-examination he said that if his son David stated that he had his own set of keys he believed that that was the case and he just didn’t recall that being the case.

[20] Veronica Dauber also initially swore that there were two copies of the keys for the Mazda with one copy of the keys hung near the door and another copy being kept by her husband. They never thought to lock the keys away because they trusted David and never thought he would take the car without their permission.

[21] However, in cross-examination she admitted that she simply didn’t remember David having his own set of keys and that she believed her son was telling the truth when he gave his statement three months after the accident wherein he said he had his own set of keys in addition to the other two sets of keys.

[22] When David Dauber was cross-examined on his statement, he initially suggested he didn’t now remember having his own set of keys to the Mazda at the time of the accident although he admitted that his memory was possibly fresh at the time of his giving his statement that he did have his own set of keys. He admitted that his memory about that was fuzzier now than in May 2004. There was no evidence that David took the original keys and had them copied without his parent’s knowledge or consent.

[23] Based on this evidence and the logical inferences from that evidence, I find on a balance of probabilities that David Dauber in fact had his own set of keys for that vehicle with the knowledge and consent of his parents and used them at the time of this accident. His detailed statement is very clear and confirmed that fact which was given shortly after the motor vehicle accident. He didn’t deny that he had his own set of keys when he was cross-examined and simply said he now didn’t remember.

[24] This finding is also based on the uncontradicted evidence that this vehicle was always meant to be his vehicle from the outset albeit not to be transferred into his name until he obtained his G2 license. He was obligated to repay his father for the purchase price and accordingly he was in effect buying the vehicle for himself. His evidence on cross- examination also confirmed that he was the one who washed the car and cleaned the inside from time to time in the driveway of his parents home and that he purchased and installed a stereo system into that vehicle which also indicates some ownership and controlling interest in that vehicle by him. His parents trusted him which makes it reasonable for them to be aware of and provide consent to his having his own set of keys.

[25] His father Eric Dauber admitted that his son David would be free when he was at home whether or not his father was away at work to install the stereo or speakers into that vehicle, use the keys to open and enter the vehicle and clean the vehicle on his own without Eric Dauber’s permission or without having to ask him first.

[26] Eric Dauber also admitted that if David had to move that car within the driveway on Eric’s property, he did not have to ask Eric Dauber first for permission to do so.

[27] Veronica Dauber also confirmed that when David installed his stereo and wanted to work on the car in the driveway, he could do so at his own discretion. David would have the freedom at his own discretion to use the keys to enter the vehicle, work on it on the driveway if he wanted to, listen to the stereo or wash the vehicle or whatever he might have wanted to do in the driveway.

[28] David Dauber in that detailed May 18, 2004 statement states that “I was not distracted by anything in my car. I did not have my stereo on because it had been stolen out of my car” which also suggests his belief in his having some ownership interest in or control over that vehicle at the time of the accident especially as he also stated that he would only drive this Mazda and would not drive any of the other cars at his father’s house. All of this evidence combined and the inferences I draw from it makes it totally logical and reasonable that David Dauber at all material times before the motor vehicle accident of February 24th, 2004 had his own set of keys to that vehicle which was likely known to the registered owner Eric Dauber.

No Consent to Operate

[29] In support of Eric Dauber’s position that his son did not have his express or implied consent to the operation of that Mazda vehicle at the time of the accident, his sworn evidence was that prior to the accident, David was never allowed to drive the Mazda or any other vehicle in their home except while accompanied by either himself, his older brother Christopher or his mother to practice for his G2 drivers test. His evidence was that David did not otherwise practice driving with anyone else and that he had advised David that he was not allowed to drive the Mazda except for practicing for his G2 drivers test and until he got his G2 drivers license.

[30] His evidence was that David never drove the Mazda or any other vehicle at their house prior to the accident except for practice with another adult driver and that even in an emergency David would not be allowed to take the Mazda or any other car in their home. He swore that had David asked prior to the accident to take the Mazda to drive on his own, he would not have permitted that. Eric also swore that when David first earned his G1 license, he had a conversation with him and made it clear to him that he was not allowed to drive except when he was being supervised by an appropriate person in the car with them.

[31] He stated that when he arrived at the scene of the accident his son David was crying and he told his father that he was sorry for taking the car without permission which he repeated the next day.

[32] The evidence of Veronica Dauber is essentially to the same effect suggesting that she and her husband specifically told David that he would not be able to drive the Mazda until he passed the G2 driving test and earned his G2 drivers license which was three days after the accident. She indicated that she believed her son David knew he was not allowed to drive the Mazda alone and that because he was a good intelligent boy and they trusted him, they never thought he would take the car without their permission.

[33] After being notified of the accident by her son, he said he was sorry because he knew he was not allowed to take the Mazda which he repeated when she met with him after the accident.

[34] The statement of David Dauber confirmed that he knew what the conditions were on his G1 license and knew he should not drive unattended and that if he wanted to use the Mazda, he would have to ask his father who would then accompany him wherever he wanted to go. He stated he was not allowed to drive without another driver with him and stated that on the day of the accident, he did not ask his father or mother if he could use the car when he left the house going to school. He was on his way home when the accident took place.

[35] Even though the evidence suggests that Eric and Veronica Dauber and their son David knew that David was not permitted to drive that Mazda vehicle on a highway prior to obtaining his G2 license without another adult family member with him, that in my view does not decide the issue. It appears from all the evidence that both parents knew that their son had his own keys to the vehicle and had full access to it at any time when they were at home at not which included his ability to start and move the vehicle albeit only on their property.

The Law

[36] S. 192(1) of the Highway Traffic Act, R.S.O. 1990, c.H.8 provided at the time of the accident:

192(1) The owner of a motor vehicle or streetcar is liable for a 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 streetcar was without the owner’s consent in the possession of some person other than the owner or the owner’s chauffeur, and the driver of a motor vehicle or street car not being the owner is liable to the same extent as the owner.

Eric Dauber’s Position

[37] Eric Dauber’s submission is that the only evidence is that David Dauber did not have Eric Dauber’s express or implied consent to and was specifically prohibited from operating the Mazda on the date of the accident on the highway while not accompanied by either Eric, Veronica or Christopher Dauber. That means that Eric Dauber is not vicariously liable under the Highway traffic Act as the owner for David’s negligence because he did not provide consent to David to operate or be in possession of the Mazda on the date of the accident.

Co-operators General Insurance Company Position

[38] Simply put, Co-operators position is that S. 192(1) of the Highway Traffic Act requires only the owner’s consent to possession and not consent to operation to render the owner liable for the driver’s negligence. In this case, it submits that Eric Dauber as the registered owner has not met the burden of proof on him to establish that there was no consent by him to the possession of the vehicle by his son David because of David, to his knowledge, having his own set of keys for the car and the ability to use the vehicle at any time.

[39] Co-operators also suggests that there is sufficient evidence in this case which confirms that David was also an owner of the vehicle at the time of the accident and that as he was in possession of the vehicle, that renders the co-owner Eric Dauber liable as an owner as well for the Plaintiffs’ damages.

Analysis

[40] The Ontario Court of Appeal in Finlayson et al v. GMAC Leaseco Ltd. (2007) 2007 ONCA 557, 86 OR (3rd) 481 confirmed that on a plain reading of S. 192 of the Highway Traffic Act, a vehicle owner is liable for the negligent operation of the vehicle on a highway unless the vehicle was in another’s possession without the owner’s consent. There is no question but that vicarious liability of the owner pursuant to S. 192 of the Act is based on possession not operation of the vehicle following the Court of Appeal decision of Thompson v Bourchier (1933) 1933 106 (ON CA), O.R. 525 (C.A.).

[41] The Court made it clear that the object of S. 192 is to protect the public by imposing upon the owner of a motor vehicle the responsibility of careful management thereof and of assuming the risk of those to whom he entrusted possession that they would observe the law and that if they failed in the discharge of that duty, the owner – using the words of the statute – would be responsible for all losses and damage sustained in the operation thereof.

[42] The Court made it clear that an owner has the right to give possession of the vehicle to another person but that S. 192 encourages owners to be careful when exercising that right by placing legal responsibility on them for loss to others caused by the negligent operation of the vehicle on a highway [paragraph 21].

[43] The Court approved the earlier decision of Donald v. Huntley Service Centre Limited (1987) 1987 4199 (ON SC), 61 O. R. (2nd) 257 wherein the owner parents were held responsible for their driver son’s negligent driving because they had given their son possession of the car but forbade him from driving it. His license had been suspended but his parents permitted him to use the vehicle by having his friends drive it. They were held vicariously liable even though they had forbidden him to drive the vehicle.

[44] In another decision, Justice Campbell in Sked v. Henry (1991) O.J. No.0339 found that the father owner of the vehicle had consented to his son’s possession of it. The 15-year-old unlicensed son had taken his father’s car to school to have it repaired in the school auto shop but a licensed driver was to drive the car to and from school. The Defendant’s son started the car while parked in the high school parking lot while the Plaintiff was on the hood causing the Plaintiff to be thrown off and serious injuries. The father was held liable even though he did not consent to his son’s operation of the car because he had consented to his possession of it. The father clearly consented to and gave his son possession of the car by having a second set of keys made and putting his son in charge of the keys. Justice Campbell found that the son by having charge of the keys and control of the car in the way described had possession of it with the father’s consent.

[45] It is significant to note in the GMAC Leasco decision that the registered owner GMAC did not consent to Mr. Simon’s operation of the truck and that by the terms of the lease Mr. Simon was expressly prohibited from operating the truck. However, it was found that GMAC consented to his possession of the vehicle although it did not consent to his operation of it. The Court found that GMAC voluntarily gave Mr. Simon possession of the truck even know it specifically prohibited him from operating it.

[46] In the 2008 decision of Seegmiller v. Langor et al 2008 53138, Justice Strathy dealt with a somewhat similar fact situation wherein the registered owner’s daughter and the daughter’s boyfriend were not licensed and were prohibited from driving the vehicle in question until they had their licences. There was an agreement that the daughter and her boyfriend would pay the mother for the vehicle and some but not all of the balance had been paid at the time of the accident. Registration of the vehicle would be transferred to the daughter and her boyfriend once they had their licences. The vehicle was parked in the driveway of the mother’s home where she lived with her daughter and the daughter’s boyfriend. The keys were left on a hook inside of the door of the house. The keys were not specifically given by the mother to the daughter or her boyfriend and while the mother was away from the home, the daughter and her boyfriend took the vehicle, drove it on the highway and were involved in an accident.

[47] Justice Strathy found that the mother was liable as the owner of the vehicle as she had consented to her daughter and boyfriend having possession and control of the vehicle even though they had been prohibited from operating it.

[48] Justice Strathy following the reasoning in GMAC Leasco found that if possession was given, the owner will be liable even if there is a breach of condition attached to that possession including a condition that the person in possession will not operate the vehicle.

[49] In this case, David Dauber had his own set of keys to the vehicle to the knowledge of his parents and was given unfettered access to it albeit to be restricted to the driveway. It appears that in some respects, he treated the vehicle as his own, spent his own money on it, was responsible for the purchase price and was going to have title to the vehicle transferred to him only three days later. He may not have had sole dominion and control over the vehicle but he certainly did have access to it including the ability to operate the vehicle at least on private property and possession of it with the knowledge and acquiescence of Eric Dauber.

[50] I have considered the case law provided by the Defendant Eric Dauber in support of his position but am of the opinion that the facts of this case noted in the previous paragraph clearly distinguish it from those cited.

[51] On a careful review of the Newell v Towns [2008] N.S.J.No. 234 decision, the issue in that case was not whether the driver had consent of the owner to his possession of the vehicle but rather whether he had the owner’s consent to operate the vehicle for the purpose of determining the obligation to defend of the owner’s motor vehicle liability insurer. That is not the issue in this case.

[52] The Gervais v. Richard [1984] O.J. No. 3357 case involved the owner’s son without the owner’s knowledge or consent obtaining a copy of the owner’s keys and driving the vehicle when he was prohibited from doing so and a finding that reasonable steps had been taken by the owner to prevent the son from having access to the keys. The vehicle in question also clearly was the mother’s vehicle that she principally drove unlike this case where the Mazda was purchased specifically for the son’s use.

[53] The same distinction of the driver not having his own set of keys, his taking the keys without the owner’s knowledge or consent and using his parent owner’s vehicle in which he had no financial or ownership interest applies with respect to the Richardson Estate v. McManus [1968] O.J. No. 418, Gerl v. Barton [2001] O. J. No. 5237, Fyfe v. S.B and L.B. and Intact Insurance Company 2012 ONSC 5125 and Oliviera v Mullings 2007 19621 (ON SC), [2007] O.J. No. 2119 decisions.

[54] I note as well that Justice Lederer in Oliviera relied on the motions justice’s decision of Finlayson v GMAC Leasco Ltd.(2006) 2006 33669 (ON SC), 83 O. R. (3d) 554 which suggested that “possession” and “ operation” for the purposes of S. 192(1) of the Highway Traffic Act were synonymous with which the Court of Appeal subsequently disagreed as noted above.

[55] Reference was also made to the Newman v. Terdik 1952 97 (ON CA), [1953] O.R. 1 (CA) decision which found that an owner who had permitted his employee to operate his vehicle on private property but prohibited him from operating it on a highway was not vicariously liable under the Highway Traffic Act for the driver’s negligence. The Court’s reasoning was that there was no consent to the driver’s use of his vehicle on a highway as contemplated by the Highway Traffic Act.

[56] The Newman v. Terdik case was not referred to in the recent decision of the Court of Appeal in Finlayson et al. v. GMAC Leasco, supra. Although the facts in Finlayson were even stronger than Newman in that the driver was prohibited by the owner from driving the vehicle at all whether on private property or on a highway, the owner was held to be liable for the driver’s negligence when he operated it on a highway. The fact that the owner did not consent to the driver’s operation of the vehicle and that by the terms of the lease the driver was expressly prohibited from operating the vehicle were irrelevant to the owner’s liability as the issue was its consent to possession not operation of the vehicle.

[57] In my view, it is more appropriate to apply the reasoning of the more recent Court of Appeal decision of Finlayson to this particular case as did Justice Mullins in the Case v. Coseco Insurance Company 2011 ONSC 2499, [2011] O. J. No.3233 decision especially as Mr. Simon clearly knew in the Finlayson case that he did not have the consent of the owner to operate the motor vehicle which is what Eric Dauber alleges to be the case with David Dauber.

[58] On the evidence before me, the Defendant Eric Dauber has not established that the 1992 Mazda at the time of the accident was in the possession of the driver David Dauber without the consent of the Defendant Eric Dauber and for that reason, as there is at least a genuine issue requiring a trial on that issue, his motion for summary judgment must be dismissed.

David Dauber-An Owner of the Vehicle

[59] Based on the evidence referred to above, it would appear that even though the Defendant Eric Dauber was the registered owner of the vehicle at the time of the accident, there is some indication that David Dauber was also an owner of the vehicle at the time of the accident.

[60] The vehicle was purchased by the initial funding of his parents primarily for David’s use as soon as he obtained his G2 license which was only three days away. He was involved with the purchase of the vehicle and helped select the vehicle for himself. The arrangements were that he would be repaying his parents for the purchase price of the vehicle even though he may not have yet made any payment at the time of the accident. He had his own set of keys to the knowledge of his parents and had the right to and in fact purchased and installed his own stereo equipment into that car. He did not drive any of the other family vehicles at all and he had unrestricted access to that vehicle while on the family property including the right to operate it on the property whether his parents were home or not. His father prohibited him from driving the vehicle on the roadway before he obtained his G2 license without an adult family member being with him.

[61] The Ontario Court of Appeal in Mazur at al v. Elias 2005 11390 confirmed that if the driver was also found to be an owner of the vehicle, the motor vehicle would not be in the possession of some person other than the owners as it was at all times in the possession of one of the owners of the vehicle. In the circumstances, it would be unnecessary for the purpose of Section 192 of the Highway Traffic Act for one owner to have the consent of the other registered owner before liability would attach to both.

[62] The Defendant Eric Dauber however submits that as the Statement of Claim does not allege that David Dauber was an owner or co-owner but only the operator of the vehicle, the pleadings govern the scope of the issues and it would not be appropriate for this Court on a motion for summary judgment to consider that in deciding the issue of Eric Dauber’s consent to David’s possession of the vehicle.

[63] I agree that this summary judgment motion is to be determined on the basis of the pleadings and all of the admissible evidence before me. (Gutierrez v. Tropic International Ltd. (2002) 2002 45017 (ON CA), 63 O.R. (3d) 63 (CA)) and that, in fairness to the parties, they are entitled to have a resolution of their differences on the basis of the issues joined in the pleadings. Rodaro v Royal Bank of Canada (2002) 2002 41834 (ON CA), 59 O.R. (3d) 74(CA).

[64] The statement of claim does identify David Dauber as the operator and Eric Dauber as the owner of the Mazda. However, it also states that “in law, the Defendant Eric Dauber is at law,” responsible for the negligence of David Dauber. This obviously refers to the potential vicarious liability of Eric Dauber under S. 192 of the Highway Traffic Act which can result because of David Dauber being either the driver having the owner’s consent to possession or driver and co-owner of that vehicle.

[65] I agree with the submissions of Counsel for Eric Dauber that it would not be appropriate for me to decide this motion based on that issue or on those grounds. Based on the pleadings and positions advanced by the parties on the motion, I decline to do so especially as it is not necessary given my reasons as indicated above on the issue of consent to possession.

Costs

The usual order for costs would require the Defendant Eric Dauber to pay the costs of the Defendant Co-operators for this motion on a partial indemnity basis subject to the issue of any written offers to settle. If the parties cannot agree on the issue of costs, Co-operators can provide brief written submissions on costs of no more than 3 pages , a bill of costs and details of any written offers within five days from the date of this decision with the Defendant Eric Dauber to similarly respond within three days thereafter.

The Honourable Mr. Justice Nightingale

Date: March 28, 2013