Consent to drive - Statutory provisions - Valid driver's licence - Third parties - Unnamed insured; Subrogation - Right of insurer to subrogation
Subrogated claim by an insurer to recover amounts paid to the vehicle owners for property damage to the vehicle. The action was allowed and a judgment in favor of the plaintiffs was granted.
 A.J. No. 292
2013 ABPC 84
Alberta Provincial Court
L.L. Burt Prov. Ct. J.
March 22, 2013
The plaintiffs were the registered owners of a vehicle that was insured by Meloche Monnex. Under the policy they were the primary drivers and their daughter, Laura, was a secondary driver. On the day of the accident, the plaintiffs had given Laura permission to drive the vehicle. She allowed the defendant, her friend, to drive the vehicle. Unbeknownst to Laura, the defendant did not have a licence or a learner's permit and had never driven a vehicle before. The defendant lost control of the vehicle and crashed. The vehicle was deemed a total loss by Meloche Monnex and $18,591.25 was paid to the plaintiffs pursuant to their policy.
A subrogated claim was brought by Meloche Monnex in the plaintiff’s name against the defendant in negligence. The defendant brought a third party claim against Meloche Monnex for indemnity if she was found liable for the collision and the property damage.
The defendant’s position was that she was an insured under the policy of insurance. Therefore as an unnamed insured the insurer was not entitled to bring a subrogated claim against her. Meloche Monnex argued that the defendant did not have consent to drive the vehicle at the time of the accident and was therefore not an insured. Alternatively, she was not authorized by law to drive, making subrogation permissible.
The Court stated that subrogation is the right to "recover amounts paid to an insured...from any person who is legally liable" for damage to or loss of the insured's vehicle. If a driver is an unnamed insured, an insurer may be required to waive its subrogated claim if the driver had the named insured's consent to operate the vehicle. Neither the Insurance Act nor the policy specify the nature of the consent required. Based upon case authority, the Court held that the consent could be express or implied.The Court held that the defendant's negligence was the cause of the collision and the damage to the vehicle. It was found that she had the implied consent from the plaintiffs to operate the vehicle on the day of the accident. The implied consent arose when the plaintiffs gave possession and use of the vehicle to their daughter without any restriction. Having found implied consent, the defendant was an unnamed insured under the policy. The Court found that the defendant's failure to disclose that she was not authorized or qualified to drive did not vitiate the consent.
The court then considered whether the defendant had breached the statutory condition prohibiting an insured from operating a vehicle when not authorized by law or otherwise qualified to do so. As an unnamed insured she was bound by that statutory condition. The Court found that defendant had breached the condition and therefore she was not entitled to a waiver of subrogation. She was not entitled to contribution or indemnity from the plaintiffs. The plaintiffs were entitled to a judgement against the defendant for the amount of the property damage, and the third party claim was dismissed.