Written by Sarah E. Makson

The British Columbia Court of Appeal released a decision that considered the often used phrase, “knew or ought to have known.”  The decision came about following submissions from the Insurance Corporation of British Columbia (ICBC) that the Plaintiff’s claims were barred because the Plaintiff knew or ought to have known that the driver of a vehicle did not have the owner’s consent to drive the vehicle when the accident at issue happened.

Take away:  Whether someone knew or ought to have known something is to be decided by an objective standard, which is the reasonable person test.  

A separate negligence lawsuit decided the background facts.  In short, a group of five teenagers went to a lake in a $500 Camaro in May 2007.  The Court found that one of their mothers actually owned the car, but everyone at the lake believed the car belonged to one of the teenagers, Steve.  Luke, the oldest of the teenagers and Steve’s friend, safely drove the car to the lake.  When they got to the lake, Luke said he wanted hotdogs and handed the car’s keys to the 17 year old Plaintiff.  Steve was not present when Luke handed the keys to the Plaintiff.  The Plaintiff got into the driver’s seat with 15 year old Ms. Reeves as her passenger.  The Plaintiff realized the car was a standard transmission, so the girls switched places because Ms. Reeves had off-road experience with standard transmissions. 

Steve and the Plaintiff both knew that Ms. Reeves was 15 years old and unlicensed.

The girls left the lake to go for hot dogs in Steve’s car.  The CD player in the car was acting up and both girls started to “fiddle” with it.  This took Ms. Reeves’ attention from the road.  She lost control of the car at a corner, causing it to roll over into a bank.  The Plaintiff suffered serious injuries and third degree burns as a result of the accident. 

Ms. Reeves was found liable to the Plaintiff in negligence, but the Court ruled that the car’s owner had not consented to Ms. Reeves operating the car.

The Plaintiff sought a declaration that she was entitled to recover against the ICBC because the driver of the vehicle was uninsured.  The ICBC denied the claim on the basis that no recovery was available because the Plaintiff knew or ought to have known that the car was being operated without the consent of the owner.

The section of the legislation at issue states:

Limitation on recovery in relation to stolen vehicles

91 (1) This section applies to a person who                   (a) suffered bodily injury, death or loss of or damage to property that is    caused by the use or operation of a vehicle, and                                               

(b) at the time of the accident as a result of which the bodily injury …was suffered, was an operator of, or a passenger in or on, a vehicle that the person knew or ought to have known was being operated without the consent of the owner….

(2) Despite the Negligence Act and section 100 of this Act,

(b) a person referred to in subsection (1) is not entitled to any recovery from the corporation under section 20 [the uninsured motorist provision].

The Trial Judge found that the Plaintiff knew Ms. Reeves was 15 years old and unlicensed.  The Trial Court also found that Steve would not have consented to either the Plaintiff or Ms. Reeves driving his car.  Furthermore, it was not proven at trial that Ms. Reeves had the implied consent of Steve’s mother, who owned the Camaro. 

Essentially, the Trial Court found that the Plaintiff would not have turned her mind as to whether Ms. Reeves had consent to operate the vehicle.  The Trial Court found that the exclusion above did not apply because the Plaintiff was “incredibly young” at the time of the accident and would not have known that the vehicle was being operated without the consent of the owner.  Therefore, the Trial Court awarded the Plaintiff $200,000, pursuant to the uninsured motorist provision.

The ICBC appealed.

The Court of Appeal allowed the appeal.  Whether the Plaintiff knew or ought to have known that the Camaro was being operated without the owner’s consent is an objective standard.  In other words, the question was whether a reasonable person in the Plaintiff’s place ought to have known that Ms. Reeves was driving without the owner’s consent.  The Court of Appeal decided that a reasonable person would have known this and “as a matter of public policy, there is no rationale for holding the Plaintiff to a lower standard in relation to her decision to become the passenger of Ms. Reeves.”  If the Plaintiff did not know Ms. Reeves was driving without the owner’s consent, she ought to have known.  The exclusion in section 91 applied.  The ICBC was not required to pay the Plaintiff for her injuries.