Law Times

Page 12 SePTeMBeR 14, 2015 • LaW TIMeS www.lawtimesnews.com Appeal court overturns precedent in insurance case Ruling considers question of consent in ATV accident BY YAMRI TADDESE Law Times n what lawyers are calling an "extremely rare" move, the Ontario Court of Appeal has expressly overruled one of its own past decisions. After grappling with what the court called "a difficult question," the five-judge panel overruled an old insurance law case, Fernandes v. Araujo. "As an intermediate court of appeal, we are ordinarily bound to follow our past decisions, even decisions with which we disagree. It is important that we do so. Our common law legal tradition rests upon the idea that we will adhere to what we decid- ed in the past. As expressed by the Latin phrase stare decisis, we stand by things that have been decided," wrote Justice Robert Sharpe in a ruling last month. The case dealt with an action by Sara Fernandes, who sus- tained injuries on an all-terrain vehicle driven on a highway by Eliana Araujo, one of the de- fendants, and owned by Car- los Almeida. He told the two women they could try it out, but in his presence, a cousin told the women not to leave the farm property with it. They ended up driving to a nearby farm and got in an accident on the way. The insurer, Allstate Insur- ance Co. of Canada, sought to dismiss Fernandes' claim on the grounds that Araujo wasn't driving with Almeida's consent. The motion judge dismissed its summary judgment motion af- ter finding Almeida had allowed Araujo to possess and drive the vehicle without restrictions giv- en that it was his cousin who told them not to leave the property. The motion judge added that even if Almeida had made the statement, any restrictions on the use of the vehicle wouldn't exculpate him from vicarious li- ability since he had consented to Araujo's possession of it. Among the issues raised by Allstate in its appeal was wheth- er the motion judge had erred in failing to follow 1953's ruling in Newman and Newman v. Terdik. But according to Sharpe, the faulty jurisprudence from New- man isn't logically consistent with "a steady string" of deci- sions that found an owner of a motor vehicle who consents to the possession of it by someone else will be vicariously liable for the negligence of the other per- son even if there's a breach of a condition imposed by the own- er on its use or operation. In a starkly different stance, Newman had found consent to possession doesn't translate to permission to operate a vehicle if the owner has placed restric- tions on its operation. "There comes a point at which the values of certainty and predictability must yield to allow the law to purge itself of past errors or decisions that no longer serve the interests of justice," wrote Sharpe. "Moreover, decisions that rest on an unstable foundation tend to undermine the very values of certainty and predictability that stare decisis is meant to foster." It's so rare for the appeal court to overrule itself that civil litigation lawyer James Morton says he has only come across a similar move two or three times over the last 20 to 25 years. "To expressly overrule a for- mer decision is extraordinary," says Morton. "The Court of Ap- peal often overrules earlier deci- sions without saying they're do- ing it. They just kind of narrow the case or say, 'Well, that's not what it really means.' But in this particular situation, it was black and white." The decision, however, was correct, he adds. "The court was correct to overturn [Newman]. I don't have a problem with that, but it's an extremely rare situation." While the Supreme Court of Canada more freely overrules its own decisions, as it did in Canada (Attorney General) v. Bedford, appellate lawyer Al- lan Rouben says it's unusual for an intermediate court to do so. Still, Rouben says the court in this case made "a very well-rea- soned decision." "It goes through the circum- stances in which it's appropri- ate to consider overruling, and here they found that the virtues of certainty and predictability were . . . outweighed by the other considerations," he says. Part of the court's unspoken motivation could have been that it's difficult to obtain leave to the top court on an issue as narrow as the one considered in this case, says Morton. "So if the Court of Appeal didn't overturn Newman, it just would never get overturned." LT What do your clients need? The means to move on. Guaranteed. ™ Baxter Structures customizes personal injury settlements into tax-free annuities that can help your clients be secure for life. » Pre- and post- settlement consultation and support » Caring professionalism for over 30 years » No fee to you or your clients Need more information? Contact us at 1 800 387 1686 or baxterstructures.com Kyla A. Baxter, CSSC PRESIDENT, BAXTER STRUCTURES Baxter_LT_Oct7_13.indd 1 13-10-01 4:03 PM I The Court of Appeal made 'a very well- reasoned decision,' says Allan Rouben. BRIEF: PERSONAL INJURY LAW

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