Canada: Alberta Court Of Appeal Finds Employer Liable For Employee's Negligent Driving

In Mustafi v All-Pitch Roofing Ltd., the Court of Appeal of Alberta analyzed when an employer is vicariously liable for the negligent driving of an employee in a company owned vehicle. On Christmas Eve in 2007, Marc Carrol, an employee with All-Pitch Roofing ("All-Pitch"), got into an accident while driving a vehicle owned by All-Pitch. Mr. Carrol had been given access to the company truck and trailer in order to store his tools and to keep warm in the winter. The Court found that All-Pitch had explicitly instructed Mr. Carrol that he was only to use the company truck for those purposes, and was not to drive it. On the night in question, Mr. Carrol acted contrary to his employer's instructions and drove the truck, during which an accident occurred.

The Plaintiff, Mustafi, was injured in the accident, and sued All-Pitch and Mr. Carrol; only the liability of All-Pitch was contested. At the trial level, All-Pitch was found to be not liable for the accident.

Counsel on the appeal did not argue the issue of vicarious liability at common law, and instead based their argument solely on section 187(2) of the Traffic Safety Act (RSA 2000 c T-6), which provides:

In an action for the recovery of loss or damage sustained by a person by reason of a motor vehicle on a highway, a person who, at the time that the loss or damage occurred,
a) was driving the motor vehicle, and
b) was in possession of the motor vehicle with the consent, expressed or implied, of the owner of the motor vehicle,
is deemed with respect to that loss or damage,
c) to be the agent or employee of the owner of the motor vehicle,
d) to be employed as the agent or employee of the owner of the motor vehicle, and
e) to be driving the motor vehicle in the course of that person's employment.

Following this provision of the legislation, the Court concluded "it is clear from section 187(2) that the employer is liable if, at the time, the driver was in possession of the motor vehicle with the consent of the owner." At the trial level, the Mugford v Kodiak Construction Ltd, (2004 ABCA 145) decision was used to argue that the employer needed to have given consent to both the driving and the possession of the vehicle in order to be found liable for the employee's negligent driving. However, as the Traffic Safety Act has since been updated from the date of that decision, consent to driving is no longer needed to find liability on behalf of the employer. All that is required is the employer's consent to possession of the motor vehicle.

As All-Pitch had provided Mr. Carrol with the keys to the truck, and had provided the truck so that Mr. Carrol could carry out his employment, "the condition not to drive the vehicle is unwritten and can be vitiated at the employer's convenience with one phone call." Therefore consent to possession was given by All-Pitch. As such, the majority of the Court of Appeal found the employer liable and allowed the appeal.

Interestingly, Justice O'Brien dissented from the majority of the Court of Appeal and declared that he would have dismissed the appeal and upheld the decision of the Trial Judge to find All-Pitch not liable for the accident. Justice O'Brien agreed that the legislation only requires the employer to give consent, whether express or implied, to the possession of the motor vehicle. However, Justice O'Brien concluded that, while Mr. Carrol had the consent to possession of the stationary vehicle, he did not have consent to possess the vehicle when it was being driven. Justice O'Brien explained:

What started as possession with consent may be transformed by theft, or another unlawful act, into wrongful possession to which no consent was given.

Nevertheless, the majority of the Court of Appeal still concluded that consent to possession was given and therefore found All-Pitch liable.

Due to the current Traffic Safety Act, employers should be careful when giving employees possession of a motor vehicle owned by the company. As evidenced in Mustafi v All-Pitch Roofing Ltd., even when the employee is not supposed to drive the vehicle to which they have the keys, the employer can still be found to have consented to possession, opening them up to liability from an injured third-party.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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