The Divisional Court has recently provided clarity on the issue of whether a defendant owner of a vehicle, who is vicariously liable for its employee driver, has any exposure as an unprotected defendant under the Insurance Act (the Act).

The Facts 

In Hinds v. Metrolinx, the plaintiff was a passenger on a GO Bus owned by the defendant, Metrolinx, and operated by its employee. Metrolinx admitted liability for its driver at trial and the jury ultimately awarded the plaintiff $35,000 in general damages plus some past housekeeping and home maintenance expenses. The plaintiff subsequently brought a motion with respect to whether the decision of the Court of Appeal in Vollick v. Sheard also applied, such that Metrolinx was vicariously liable under employment law principles as the driver’s employer, despite being a protected defendant under section 265.5(5) of the Act.

Trial Judge Decision

In dismissing the plaintiff’s argument, the Trial Judge referred to section 267.5(10.1) of the Act which states as follows:

(10.1) Despite any provision of this Part, a person vicariously liable for the fault or negligence of a protected defendant is not, in respect of the person’s vicarious liability, liable for any amount greater than the amount of damages for which the protected defendant is liable.

Relying on this section, the Trial Judge held that Metrolinx could not be responsible for a greater amount of damages than the protected driver. As such, the trial judge applied the statutory deductible at the time of judgment ($37,385.17) which reduced the plaintiff’s general damages award to nil. The plaintiff subsequently appealed to the Divisional Court.

Divisional Court Decision 

On appeal, the Divisional Court differentiated the Vollick line of cases which found that a defendant vehicle owner, who was vicariously liable for its driver’s negligence as the employer of the driver, could not benefit from the statutory deductible. In doing so, the Court noted that the prior lineage of cases was determined prior to the implementation of s. 267.5(10.1) of the Act.

On a plain reading of this section, the damages amount that Metrolinx was exposed to by way of its vicarious liability could not be greater than the amount its driver was exposed to as a protected defendant. The appeal was accordingly dismissed.

This decision appears to end the Vollick line of authority that had previously allowed there to be an “unprotected” portion of a claim that arose out of a defendant’s capacity as employer of a driver of a vehicle.