Vicarious Liability of Rental Car Company
At our weekly firm meeting, Angeline Bellehumeur, discussed the case of Mamo v. Morgan, 2020 ONSC 7829. Our firm was counsel for two of the defendants in the claim.
The Court considered a motion by a rental car company, Practicar, to grant summary judgment and dismiss the action against it. The Court held that Practicar was vicariously liable for the damages arising from a motor vehicle accident involving the rental vehicle driven by the renter’s spouse.
The Court stated that Practicar did not discharge its responsibility of showing that the renter did not consent to her spouse operating the vehicle. Pursuant to s. 192 of the Highway Traffic Act, R.S.O. 1990, c. H.8, Practicar was vicariously liable for the damages caused by the negligent driving of the renter’s spouse.
Leanne Jordan fraudulently rented a vehicle from Practicar by using the identification of Sabrina McIntyre. McIntyre had never made a reservation with Practicar and had no previous dealings with Practicar. At the time, McIntyre was unaware that Jordan produced her driver’s license or used her identity to rent the vehicle. Practicar took no steps to confirm Jordan’s identity. Practicar allowed Jordan to rent the vehicle for one week in exchange for cash by way of oral agreement.
During this rental period, Chevonie Morgan, drove the rented vehicle. Jordan and Morgan lived together. When driving the vehicle with two children aboard, Morgan fled the police and drove into oncoming traffic and struck the plaintiff’s vehicle.
The plaintiffs commenced an action against Morgan, Jordan, Practicar, the Ontario Provincial Police, and their insurers under the uninsured/underinsured motorist policies. Neither Morgan nor Jordan filed a defence and were noted in default.
At issue is whether Practicar, as the owner of the rented vehicle, is vicariously liable for the damages sustained by the plaintiffs. The insurers argue that Practicar is vicariously liable for the damages caused by Morgan’s negligent driving. While Practicar concedes that it granted Jordan possession of the car when it handed her the keys, Practicar argues that it cannot be held vicariously liable for Morgan’s actions.
Highway Traffic Act
Section 192 of the Highway Traffic Act imposes vicarious liability on “owners” and “lessees” of a vehicle:
192 (1) The driver of a motor vehicle […] is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle […] on a highway.
(2) The owner of a motor vehicle […] is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle […] on a highway, unless the motor vehicle […] was without the owner’s consent in the possession of some person other than the owner or the owner’s chauffeur.
(3) A lessee of a motor vehicle […] is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle […] on a highway, unless the motor vehicle […] was without the lessee’s consent in the possession of some person other than the lessee or the lessee’s chauffeur.
(4) Where a motor vehicle is leased, the consent of the lessee to the operation or possession of the motor vehicle by some person other than the lessee shall, for the purposes of subsection (2), be deemed to be the consent of the owner of the motor vehicle.
Accordingly, an owner of a motor vehicle is vicariously liable for the negligence of the vehicle’s operator only if the owner consented to the operator’s possession of the vehicle. Further, the consent of the lessee to the operation or possession of the motor vehicle by some other person shall be deemed to be the consent of the owner.
This vicarious liability encourages owners to be careful when exercising the right to give possession of their vehicles to another person. The underlying policy rationale of these provisions is to protect innocent third-party victims from owners who are not diligent in lending or renting their vehicles. The Court notes that it is logical that “the legislature would place a higher burden on commercial rental car companies than individual vehicle owners” (para 19).
While Practicar did not hand Morgan the keys to the rented vehicle, there is a presumption that the lessee had consented to the driver to possess the vehicle. There was no evidence in this case to support a position that Jordan did not consent to Morgan’s possession or operation of the vehicle.
The Court also made a “logical inference” that Jordan did consent to Morgan driving the vehicle due to the undisputed facts that Jordan and Morgan lived together and Morgan was driving Jordan’s children to her mother’s house when he struck the plaintiff’s vehicle.
Pursuant to section 192(4) of the Highway Traffic Act, Practicar was deemed to have consented to Morgan’s use of the vehicle and was, therefore, held vicariously liable for the damages resulting from the accident.
The claims against the insurers were dismissed and Practicar was ordered to pay the insurers’ costs on a partial indemnity basis.