A vehicle driven with the consent of the insured owner is insured under the owner’s insurance policy

An appeal by insurer from a finding that it was responsible for coverage of damages arising from a motor-vehicle accident was allowed. The trial judge had erred by failing to consider s. 114 of the Insurance Act R.S.N.S. 1989 c. 231 and the prevailing jurisprudence, which holds that if an operator drives an owner’s vehicle with the consent of the owner, the owner’s insurance will respond to any claim for damages.

Royal & Sun Alliance v. Baltzer, [2009] N.S.J. No. 505, November 4, 2009, Nova Scotia Court of Appeal, J.W.S. Saunders, L.L. Oland and J.E. Fichaud J.J.A.

On October 5, 2003, Clements was driving a truck owned by the Baltzers when he collided with a vehicle driven by the Clarks. The Clarks brought an action against the Baltzers, Clements and Royal & Sun Alliance, the Section “D” insurer of the Clark vehicle.

By consent, the parties sought a preliminary determination of the issue of whether Clements was operating the vehicle in question with the consent, express or implied, of the Baltzers. Clements was a friend of the Baltzers and also a mechanic. Over the years he had done maintenance on their truck. He did not have a vehicle of his own and on several previous occasions, with the Baltzers’ consent, he had used the truck. Several weeks after the accident the Baltzers produced a document, dated October 4, 2003, which purported to set limits on Clements’ use and operation of the truck. The document was signed by Mr. Baltzer and Clements.

The trial judge found as a fact that Clements had used the truck with the consent of the Baltzers. She did not accept that the document was executed prior to the accident on October 5, 2003. She then went on to consider s. 248(3) of the Motor Vehicle Act, R.S.N.S. 1989 and found that the principle of the Baltzers’ vicarious liability was rebutted, as Clements was not driving in the course of employment with the Baltzers or acting under their instructions. She therefore concluded that the uninsured motorist provisions in the Clarks policy was engaged and Royal & Sun Alliance was responsible for responding to the claims by Clark and his passengers.

On appeal Royal & Sun Alliance argued that the trial judge had erred by failing to consider s. 144 of the Insurance Act to determine that the Baltzers’ insurer was responsible to pay any damages occasioned by Clements’s use of the vehicle. The Court of Appeal agreed. It noted that the judge had correctly found that Clements was driving the vehicle with the consent of the Baltzers. According to s. 114 of the Insurance Act, and the jurisprudence, it would therefore be the Baltzers’ insurance which would be called upon to respond to any claims. The judge incorrectly applied s. 248 of the Motor Vehicle Act, which deals with tortuous liability for accidents, not insurance coverage. The appeal was allowed and the order requiring Royal & Sun Alliance to respond to the claim was reversed.

This case was originally summarized by Natasha D. Morley and originally edited by David W. Pilley.

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