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No Consent: Nova Scotia Insurance Company Refuses to Defend After Car Accident

Victor Lewin - Wednesday, October 26, 2011

The Supreme Court of Nova Scotia recently released a decision which underlines the importance of consent to the availability of insurance following a car accident in which someone is injured.

In the case of Deveraux v. Dixon, the son of an insured driver caused a car accident. Two passengers of the car he struck were injured. They started a law suit against the son and his mother (as the owner of the car).

The mother's insurance company did not defend the case, arguing that an exclusion clause in the insurance policy did not require them to defend the driver of an insured car when that driver is driving the car without consent. The relevant provisions in the insurance contract and the Insurance Act read, respectively:

The insurer agrees to indemnify the insured and, in the same manner and to the same extent as if named herein as the insured, every other person who with his consent personally drives the automobile, or personally operates any part thereof, against the liability imposed by law upon the insured or upon any such other person for loss or damages arising from the ownership, use or operation of the automobile.

...

114 (1) Every contract evidenced by an owner's policy insures the person named therein, and every other person who with his consent personally drives an automobile owned by the insured named in the contract and within the description or definition thereof in the contract, against liability imposed by law upon the insured named in the contract or that other person for loss or damage

(a) arising from the ownership, use or operation of any such automobile; and

(b) resulting from bodily injury to or the death of any person, and damage to property.
The mother and son did not have the financial resources to pay for the victim's damages on their own. Therefore, in the event the insurance company was absolved from having to defend the mother and son, personal injury lawyers for the victims included the victims' insurance company (Aviva) to the claim. In the event a person is struck by an uninsured driver, the victim's insurance company is statutorily required to compensate their insured.

In this case Aviva argued that implied consent was given and that, therefore, the mother and son were not uninsured.

The person that caused the accident was a 24-year-old son of the insured owner of the car. He lived with his mother. His mother bought the car, insured it, but did not register it. She said she was unemployed and was receiving a disability payment, and did not have the money to register the vehicle until the end of the month. She was holding off on the registration until then.

Though trained to drive, the son was not licensed at the time of the car accident. He therefore never drove any of his mother's cars.

On the day of the car accident, the mother went out to dinner. She left her car (and its keys) at home. The son had been drinking at a friend's house. He returned home sometime in the evening. He was intoxicated when he then decided to take the truck. He did not contact his mother to ask permission, and did not discuss it with anyone else. It was the first time he had driven the truck.

The Court noted the following test for determining whether implied consent was given for the son to drive the car:

The test for implied consent has been stated more recently by Stewart, J. of this Court as "whether upon analysing all the surrounding circumstances objectively, a reasonable person observing the situation would conclude that [the driver] had the implied consent of [the owner] to drive the truck... The state of mind of the owner and driver are strong factors in determining the issue of implied consent".

The Court found that there was no evidence that there had been consent, express or implied, for the son Emerson to drive the insured mother's vehicles. She was aware that he did not have a driver's license. As such, she did not find it necessary to explicitly tell him he could not drive her vehicles. He was not listed on her automobile insurance, and, as far as she knew, he had not driven her vehicles in the past.

This case is important to victims of car accidents in Nova Scotia, New Brunswick and PEI. The availability of an insurance company to be able to provide appropriate compensation is often necessary. Where the issue of consent is brought up by an insurance company to deny coverage, it is possible that car accident victims can be denied recourse. In such cases it takes experienced lawyers, specializing in the field of personal injury litigation to navigate the course required to ensure that an insurance company will be mandated to respond to a claim for damages.

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