Employer not exempt when vehicles used for business

Vollick v. Sheard, 2004 CarswellOnt 2648 (Ont. S.C.J.)

Bonnie Vollick was riding her bicycle in Orillia, Ont., in April 2001 when she was involved in a collision with a tow truck driven by Cory Sheard, an employee of Atherley Towing.

Vollick filed an action seeking the costs of future health care, damages for past and future loss of income and general damages for pain and suffering. The action was sought against both Sheard and Atherley Towing.

Atherley’s defense is that under the no-fault provisions of Ontario’s Insurance Act the owner of a motor vehicle is a “protected defendant.” A protected defendant isn’t liable for health-care expenses or non-pecuniary damages (except in very serious accidents) and is only liable for up to 80 per cent of a plaintiff’s projected net income in the period between the accident and the trial.

Vollick’s counsel conceded that Sheard, as both an occupant of the vehicle and present at the scene of an accident, is definitely a protected defendant under the legislation. Counsel also conceded Atherley is a protected defendant in its capacity as the owner of the tow truck. Counsel argued, however, that Atherley was liable for Sheard’s actions in its capacity as Sheard’s employer.

Atherley’s counsel countered the same party can’t logically be protected on one hand but unprotected on the other; that to make employers liable when their employees are operating motor vehicles goes against the fundamental purpose of no-fault insurance, namely to control the cost of insurance premiums for consumers; and that there is no basis to exempt an owner of a vehicle from the protecting legislation in the Insurance Act merely because it also employs the driver of the vehicle.

In rejecting Atherley’s defense and ruling Atherley Towing is not a protected defendant, Justice Bryant of the Ontario Supreme Court of Justice pointed out the notion of dual capacity has been well established in law and a restriction on one application does not bar a right of action on another. Justice Bryant said the law has repeatedly reinforced the concept that employers are liable for its employees. If the legislature wished to change this principle of established law as it related to no-fault insurance, it would have done so explicitly, he said.

He added there was no evidence that making employers liable for the road accidents of their employees would undercut the intent of no-fault insurance or cause a significant increase in insurance premiums.

“An owner does not have immunity… for the negligent operation of a motor vehicle by an employee in the course of her or his employment,” he said.

The court ruled Atherley Towing was not a protected defendant and not entitled to reduced damages for non-pecuniary losses and Vollick was entitled to recover health-care costs and 100 per cent of lost income.

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