Ontario Court of Appeal finds vehicle co-owner’s policy should cover Highway Traffic Act liability

The Ontario Court of Appeal ruled that s. 239(1) of Ontario’s Insurance Act, 1990, required the insurance policy of a vehicle’s co-owner to cover liability under Ontario’s Highway Traffic Act, 1990 (HTA) because both co-owners were liable under the HTA. 

In Nowakowski v. Campbell, 2025 ONCA 762, A. Malcolm and S. Le Brun were joint registered owners of a pick-up truck. Malcolm had a vehicle insurance policy with Economical Insurance. The policy did not list Le Brun or K. Campbell as insureds or drivers. 

Campbell had an accident while operating the vehicle, potentially with Le Brun’s consent to possess it. 

The plaintiff brought an action against her insurer Allstate Insurance Company of Canada, Malcolm, Le Brun, and Campbell. Before the trial, the parties moved for a determination of whether the Economical policy insured Malcolm, as the vehicle’s co-owner, against the claim. 

The issue in this proceeding was whether Malcolm was liable for loss or damage resulting from the vehicle’s negligent operation, where co-owner Le Brun consented to non-owner Campbell’s possession of the vehicle. 

On Dec. 5, 2024, Justice Evelyn M. ten Cate of the Ontario Superior Court of Justice found Malcolm liable under both s. 192(2) of the HTA and s. 239(1) of the Insurance Act. 

On appeal, Economical alleged that the motion judge erred in interpreting both statutory provisions. According to Economical, under s. 192(2): 

• The court should independently assess the liability of each co-owner of a jointly owned vehicle because s. 192(2) considered the co-owners “separate pillars” 
• The co-owner consenting to a non-owner’s possession of the vehicle would be solely vicariously liable for losses due to the non-owner’s negligent operation of the vehicle 
• The motor vehicle policy of the non-consenting owner, who was not vicariously liable, did not need to cover the losses under s. 239(1) 

Appeal denied

The Court of Appeal for Ontario dismissed the appeal and ordered Economical to pay Allstate’s costs in the agreed all-inclusive amount of $10,000. 

The appeal court acknowledged that the motion judge erred in interpreting s. 239(1) of the Insurance Act and concluding that this subsection could be the basis of a vehicle owner’s liability or require the Economical policy to cover the plaintiff’s losses even if Malcolm was not liable for such losses under s. 192(2) of the HTA. 

The appeal court agreed with Economical that s. 239(1) only identified the liabilities covered by the owner’s insurance policy and required the policy to cover liability legally imposed on the owner in connection with specific loss or damage, rather than creating or establishing the owner’s liability. 

However, the appeal court ruled that this error made no difference in the circumstances. The appeal court explained that both co-owners would be vicariously liable under s. 192(2) for any loss or damage caused by the non-owner’s negligence if either co-owner consented to the non-owner’s possession or operation of the jointly owned vehicle. 

The appeal court rejected Economical’s arguments that s. 192(2) treated co-owners as “separate pillars” or required an independent assessment of their vicarious liability. The appeal court added that subsequent jurisprudence on s. 192(2) had overtaken the decision in Barham v. Marsden, [1960] O.J. No. 60 (C.A.), cited by Economical.