The perils of co-ownership

Both owners of vehicle liable for plaintiff’s losses arising from motor vehicle accident in which driver had consent of only one of the two vehicle owners to possess and operate the vehicle.

Insurance law – Automobile insurance – Third parties – Use of vehicle – Care, custody, or control of motor vehicle – Consent to drive – Ownership, use or operation of motor vehicle – Statutory provisions; Practice – Appeals – Standard of review.

Nowakowski v. Campbell, [2025] O.J. No. 4852, Ontario Court of Appeal, November 10, 2025, G. Huscroft, S.A. Coroza and P.J. Monahan JJ.A.

The plaintiff suffered personal injury in a motor vehicle accident involving a vehicle owned by two owners. The Economical Insurance policy at issue only insured one of the owners. The insured owner did not consent for the vehicle to be driven by the driver at the time of the motor vehicle accident. For the purposes of the application at hand, the uninsured owner was assumed to have consented to the possession and operation of the vehicle by the driver. Economical argued that the insured owner was not liable to the plaintiff, relying on section 192(2) of the Highway Traffic Act, which provides:

The owner of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street car on a highway, unless the motor vehicle or street car was without the owner’s consent in the possession of some person other than the owner or the owner’s chauffeur.

Economical argued that if one owner of a jointly owned motor vehicle consents to the possession of the vehicle by a non-owner, only that owner is vicariously liable for the negligent operation of the vehicle by the non-owner. As such, Economical would not be required to defend the plaintiff’s claim because the insured owner was not liable at law.

The Court rejected Economical’s argument, holding that both owners would be liable for the plaintiff’s losses by virtue of the uninsured owner’s consent to the driver’s possession and operation of the vehicle.

This case was digested by Dionne H. Liu and edited by Steven W. Abramson of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].