Canada: Keys, Please: The Econolodge Park-And-Fly Conundrum

Last Updated: November 22 2018
Article by Marie-Pier Nadeau

On October 19, 2018, the Supreme Court of Canada released its decision in 3091 5177 Québec inc. (Éconolodge Aéroport) v. Lombard General Insurance Co. of Canada, 2018 SCC 43. The decision mostly focused on the "care, custody and control" exclusion, but is also of interest for insurers wishing to pursue subrogation for theft of vehicles while in the care of others.

The Econolodge, a park-and-fly hotel, offered its guests accommodation, parking and a shuttle service to the Montreal airport. Guests were required to leave their car keys with the Econolodge in the winter, in the event the cars had to be moved for snow removal activities. Two guests had their cars stolen while they were abroad, during the winters of 2005 and 2006. The Econolodge was unaware of the thefts until the guests reported it, and the keys were still in the Econolodge's possession, for both cars. Their insurers compensated the car owners for their losses, and subrogated against the Econolodge. The Econolodge's liability insurer, Lombard, was also sued directly by one of the insurers and by the Econolodge itself for coverage. Lombard denied coverage on the ground of a standard care, custody or control exclusion clause, which excluded coverage for property in the custody, care and control of the Econolodge.

One of the main issues at trial was whether the contract was one for services (2098 CCQ) or one of deposit (2098 CCQ). In a contract for services, the provider of services is bound to act in the best interest of the client, with prudence and diligence. Negligence – a departure from the conduct of a prudent and diligent person – must be established by the plaintiff. In a contract of deposit, the depositor is bound to return the property. If the deposit is onerous, then the depositor is liable for the loss of the property unless he proves force majeure. This is a situation of strict liability against the depositor.

The trial judge1  concluded that the contract was predominantly one for services. The main element of the contract was the hotel room rental. The parking services for the vehicle was only an accessory of the contract. Despite the higher burden of proof that then had to be met by the plaintiffs, the trial judge held that the Econolodge was liable for both thefts. The trial judge noted that the Econolodge heavily advertised its park-and-fly service, and as such, the guests were entitled to believe that the Econolodge had implemented reasonable security measures for its parking lot. However, in reality, the Econolodge did not have any security measures in place, and did not even monitor the parking lot.

Regarding coverage, the trial judge refused to apply the exclusion. Lombard accepted the risk, that of a park-and-fly hotel. The Econolodge did not have care, custody and control of the vehicles on its parking lot – it only requested the keys during the winter, and would only move the vehicles if it had to, for snow removal activities. The trial judge noted that Lombard would not have been able to rely on the exclusion during the summer months. To apply the exclusion during the winter months would create an absurd result.

The Court of Appeal2  confirmed the trial judge's decision on liability, agreeing with the trial judge's finding of negligence on the Econolodge part: "Econolodge's fault is that it has led its customers to believe that security measures were in place when this was not the case."3  The Court of Appeal however reversed the decision regarding coverage. In the Court of Appeal's view, since the hotel had the keys, it had the care, control and custody of the vehicles.

In a unanimous decision, the Supreme Court of Canada4  restored the trial judge's decision on all issues. It confirmed that the characterization of the contract as one for services was appropriate. The finding of liability on the Econolodge's part was one of mixed fact and law that was entitled to deference on appeal. The trial judge's finding on the issue of the custody of the stolen vehicles was, too, entitled to deference. Writing for the majority, Justice Gascon noted:

"Here, there is no doubt that the handover of keys is a relevant fact in determining custody of the property, since the keys provide access to the vehicle (...). Nevertheless, I cannot accept Lombard's argument that custody is transferred automatically when the keys to a vehicle are handed over. Such an absolute rule is inconsistent with the highly contextual nature of the determination of custody and with the principles developed in the case law. (...) To determine whether there has been a transfer of custody and thus control of property, a court must consider all the circumstances, including the reason for any handover of keys. This is precisely what the trial judge did in the instant cases."5

Justice Gascon also agreed with the trial judge that Lombard's own interpretation of the exclusion would lead to absurd results:

"(...) I agree with the trial judge that Lombard's argument leads to results that are incongruous, if not absurd. In the Court of Québec, Lombard's senior analyst conceded that the exclusion clause was inapplicable in the summer, since Éconolodge did not have the keys to parked vehicles in its possession during that time. In short, in the same year of coverage, the applicability of the exclusion clause would depend on the season or even on the amount of precipitation." 6

Overall, the Supreme Court of Canada found that the Court of Appeal should not have intervened.

The trial judge's finding of liability on the Econolodge's part, affirmed on appeal, is certainly interesting. Absent any advertisement by the Econolodge, it is quite possible that the lack of security measures of the parking lot would not have been considered negligent. The standard of care was not only assessed based on what another prudent and diligent hotel would have done, but also based on what the guests' expectations would have been, in view of the advertisement.


1Axa Assurances inc. c. 3091-5177 Québec inc. (Econolodge Aéroport), 2015 QCCQ 1539.

2Compagnie canadienne d'assurances générales Lombard c. Promutuel Portneuf-Champlain, société mutuelle d'assurances générales, 2016 QCCA 1903.

3Ibid at para. 20 [our translation].

43091 5177 Québec inc. (Éconolodge Aéroport) v. Lombard General Insurance Co. of Canada, 2018 SCC 43.

5Ibid at paras. 40-41.

6Ibid at para. 55.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
7 Dec 2017, Webinar, Toronto, Canada

FEX Members Jeff Noble, BDO, and Caroline Abela, WeirFoulds LLP, invite you to a complimentary webinar series titled: All About Shareholders.

11 Nov 2018, Seminar, Toronto, Canada

WeirFoulds Partner Glenn Ackerley will Chair the RICS & CIQS 5th Annual Construction & Project Management Seminar.

10 Dec 2018, Seminar, Toronto, Canada

Join us for our last CPD seminar before the year ends! This program has been accredited for 1.5 hours of Professionalism Content as approved by the Law Society of Ontario.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions