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From the Bench: Ruling Argues Against “All or Nothing” Consent

Garrioch v Sonex Construction Ltd., 2017 ABCA 105

Case Facts

In this case, the Defendant employer gave its employee, Garrioch, a company truck and its keys. Garrioch did not have a licence, so Garrioch gave the truck to Tessman to drive. At the material time, Tessman’s relationship with the Defendant company was not clear. His contract was finished, but he was expected to return after break-up. Ultimately, his relationship with the Defendant company was not relevant to the ultimate decision. The court confirmed the principle either there is consent to drive or there is not – there is no ‘conditional consent’ to be given to a person who has consent of the owner to drive the vehicle. The question the Court was asked to determine is whether the consent can be transferred to another.

In respect of consent generally, the Court stated:

[19] It is now established that conditional consent is impermissible. Consent is an “on or off” switch: either it exists or it does not. If an owner gives consent to a driver, the owner is deemed to accept the risk that the driver might in some particular respect, on some particular occasion, be negligent, or use the vehicle in an unauthorized or unanticipated way: see the Mugford case, discussed infra, paras. 30-1.

[20] It follows that the owner’s personal or internal policies about use of the vehicle, even if expressly made a condition of the transfer of possession of the vehicle, are ineffective in law against third parties. The failure to comply with a policy or condition cannot terminate the “possession with consent”. For example, the following conditions are essentially red herrings in this appeal:

  • any provisos about the safe or lawful use of the vehicle by the employees of Sonex, including driving after drinking;
  • the existence or content of any “personal use” policy by Sonex’s employees, or other limitations on use;
  • any “fatigue” or duration of operation restrictions;
  • whether the employee knew or ought to have known of these policies;
  • whether the policies are strictly enforced, or just “paper policies”.

If these internal policies are breached, the employer can caution, discipline or terminate the employee, but the breaches cannot be put up against a third party who has been injured in a motor vehicle accident.

However, an owner of a vehicle is entitled to place a condition on whom has its consent to drive which creates an exception to the 2004 decision of the Alberta Court of Appeal in Mugford v Weber, 2004 ABCA 145. The Court stated:

[56] The answer to the question is simple: the third party driver exception recognized in Marcoux is permitted because the statute says it should be permitted. The one condition that the statute specifically allows the owner to place on his vicarious liability is “consent”. The owner is allowed to consent to the second party having possession of the vehicle, and limit that consent to the second party. If the third party wants consent to possess the vehicle, he has to get it from the owner. Just because the owner consents to one driver having possession of his vehicle does not mean that the owner consents to the whole world having possession.

In this case the owner of the vehicle did not give consent to Tessman to drive:

[69] In all of the circumstances, the only reasonable inference from the facts is that Sonex did not give Garrioch permission onto pass on possession to other persons, at least those who were not employees. It follows that the conclusion at trial that Tessman was operating the vehicle with the implied consent of Sonex reflects reviewable error, and must be overturned.
The Court also commended on ‘negligent entrustment’ stating:

[76] If the driver has the consent of the owner, then the Traffic Safety Act imposes vicarious liability. The statute sends a strong signal as to when the owner should be liable for the negligence of other drivers: when the owner gives “consent”, then vicarious liability follows. When the statute does not impose vicarious liability (because there is no consent for the possession by the driver) care should be taken in imposing liability through an alternative theory of “negligent entrustment”. While conceptually sound, this theory has the potential of finessing the public policy that liability only arises (and the owner’s insurance coverage is only engaged) if the third party driver has consent to operate the vehicle.

[77] If Tessman did not have express or implied consent, Sonex is not vicariously liable. Instead, it is argued that Sonex could also be liable if it allowed Garrioch to have the vehicle, knowing that Garrioch might negligently select someone to drive the vehicle (without consent of the owner), and that turning over the truck to Tessman was such a negligent act. If the Legislature had intended to make the owner liable in such circumstances, the statute would not be predicated solely on “consent”. While the “negligent entrustment” argument might be available on truly unusual facts, there is no basis to engage it on this record.

In Conclusion

This case opens the door to argue against the idea of “all or nothing” consent when an owner has given up possession of a vehicle to someone else.  In effect, an owner is entitled to place a condition on the authorized driver preventing him from passing on possession of the vehicle to another person thereby limiting their exposure to vicarious liability.  Those who will see the most direct benefit of this exception will be rental car and leasing companies whose contracts seek to restrict drivers to the individuals named in the contract.