Determining ‘lessee’ for purposes of Insurance Act may engage agency principles

Insurance - Automobile Insurance - Uninsured Automobile Coverage

Car was rear-ended by rental truck. At time of accident, truck driver was delivering furniture for F Co.. Driver of car brought negligence action. Insurers for rental company (insurer A) and F Co. (insurer W) could not agree on their insurance obligations. Insurer A brought application for declaration that F Co. was lessee of rental truck. Application was dismissed, with judge finding that truck driver was lessee. Insurer A appealed. Appeal allowed. Application judge erred in determining identity of lessee by restricting himself to face of two-page rental agreement. Taking agency principles into account, F Co. was lessee. Parties to contract are not always those who signed it. Determining identity of “lessee” for purposes of s. 277(1.1) of Insurance Act may require courts to apply agency principles where fact of agreement and surrounding circumstances show that one of signatories was signing on behalf of another person. F Co.'s owner impliedly authorized truck driver to rent truck by telling him he could rent vehicle from rental company and have it billed to credit card on file for F Co.. Rental company was aware of this grant of authority and dealt with truck driver on that basis. Truck driver entered into rental agreement pursuant to long-standing arrangement between F Co. and rental company. F Co.'s phone number was contact number on face of rental agreement. Rental agreement contained “R.A.” number that was same as that appearing on document with corporate account number assigned to F Co.. Appellate court was not in position to determine issue of priority.

Aviva Insurance Company v. Wawanesa Mutual Insurance Company (2019), 2019 CarswellOnt 14420, 2019 ONCA 704, K. Feldman J.A., David M. Paciocco J.A., and Fairburn J.A. (Ont. C.A.); reversed (2018), 2018 CarswellOnt 16143, 2018 ONSC 5778, S. Nakatsuru J. (Ont. S.C.J.).

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