Would you like some liability with that loan?

Without much fanfare, a case that is likely going to have huge implications on a sector of the automobile industry was released back on Oct. 16, 2007. In Transportaction Lease Systems Inc v Jennifer Yeung, by her litigation guardian Heidi Yeung, et al [Transportaction], the Supreme Court of Canada (“SCC”) chose not to disturb a decision of the British Columbia Court of Appeal that held automobile finance companies vicariously liable as automobile “owners” for injuries emanating from car accidents of their customers. For a more thorough look at how the Court of Appeal arrived at that decision, please see our coverage of this case in September.

The reason that this case may have escaped the notice of many onlookers is because the judgment was rendered orally. Much to the dismay of the appellants, I am sure, on the day of the hearing, the Chief Justice uttered a brief judgment that dismissed the appeal:

The meaning of s. 86 of the Motor Vehicle Act, R.S.B.C. 1996, c. 318, is plain, and for this reason we are in agreement with the conclusions of the Court of Appeal of British Columbia. The appeal is dismissed with costs.

There was no deliberation, no backroom discussion, and no analysis. All we have to go on is one brief sentence, and with it, automobile finance companies across the country are possibly on the hook for millions of dollars in personal injury claims.

By rubber stamping the Court of Appeal decision, the SCC effectively gave that decision national scope. It will now guide interpretation of similar provisions in other provinces and territories. While the SCC’s decision did not contain any analysis, and legislation in other jurisdictions will undoubtedly differ, the SCC’s blanket endorsement of the BCCA decision will now give it great weight. The fact that the SCC did not refuse leave to appeal, but instead granted it, and then dismissed the appeal shows that the SCC gave real thought to the judgment and had no objections to it.

Though it may appear that the justices did not deliberate on the issues presented, the reality is that they may have already considered these issues at length. The answer to this seeming paradox may lie in the two cases that were released later that same week, Citadel General Assurance Co v Vytlingam, [2007] 3 SCR 373 [Vytlingam] and Lumbermens Mutual Casualty Co v Herbison, [2007] 3 SCR 393 [Lumbermens]. In a post last week, Yu-Sung Soh discussed these two cases wherein the SCC limited the extent of liability of automobile insurance companies, noting how it reduced available compensation for victims.

Well, it seems that where one hand taketh away, the other hand giveth. Indeed, the SCC justices may very well have had their judgment written for the Lumbermens and Vytlingam cases before the Transportaction hearing, and as such, may have already decided issues of risk apportionment before going into that hearing. Though we will not know for sure exactly when they made up their mind, the effect of this decision is that car accident victims can now get at another bank account.

So if you think you have stuck because automobile insurance will not cover the use of a car when its driver shoots at what he thinks is a deer, but turns out to be a person (the fact scenario in Lumbermens)? Think again. You can now likely sue the finance company/”owner” for being vicariously liable for such recklessness. Since they are an “owner” for a car accidents’ sake, it is probably not too far of a stretch for them to be responsible for reckless acts as well. After all, in either a collision or a reckless act, the finance company could not have effectively controlled the use of the vehicle.

Read in conjunction, the cases released on week of October 14, 2007 may serve to reshape compensation for automobile accident victims for years to come. Though the ultimate impact is yet to be revealed, with the addition of finance companies’ bank accounts to the fold, car accident victims may actually now have greater access to compensation avenues than ever before.

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