PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - TRIAL DIVISION

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1 Date: Docket: GSC Registry: Charlottetown PROVINCE OF PRINCE EDWARD ISLAND IN THE SUPREME COURT - TRIAL DIVISION BETWEEN: JOHN ROBERT GALLANT PLAINTIFF AND: STEPHEN ARTHUR PICCOTT, WALTER PICCOTT CHEVROLET OLDSMOBILE CADILLAC LIMITED doing business under the firm name and style of CHOICE RENT-A-CAR AND GENERAL MOTORS ACCEPTANCE CORPORATION OF CANADA LIMITED Before: The Honourable Mr. Justice J. Armand DesRoches DEFENDANTS William F. Dow Barry Morrison, Q.C. Eugene S. Murphy, Q.C. Place and Date of Hearing Place and Date of Judgment Solicitor for the Plaintiff Solicitor for the Defendants Stephen Arthur Piccott and Walter Piccott Chevrolet Oldsmobile Cadillac Limited Solicitor for General Motors Acceptance Corporation of Canada Limited Charlottetown, Prince Edward Island September 15, 1999 Charlottetown, Prince Edward Island October 27, 1999

2 GSC BETWEEN: JOHN ROBERT GALLANT PLAINTIFF AND: STEPHEN ARTHUR PICCOTT, WALTER PICCOTT CHEVROLET OLDSMOBILE CADILLAC LIMITED doing business under the firm name and style of CHOICE RENT-A-CAR AND GENERAL MOTORS ACCEPTANCE CORPORATION OF CANADA LIMITED Prince Edward Island Supreme Court - Trial Division Before: DesRoches J. Date Heard: September 15, 1999 Date of Judgment: October 27, 1999 [10 pages] PRACTICE - Judgments and Orders - Summary Judgment - General. DEFENDANTS Cases Considered: Westland Homes Ltd et al. v. Schurman (M.F.) Ltd. (1992), 101 Nfld. & P.E.I.R. 122 (P.E.I.S.C.A.D.); Lenentine v. Robichaud et al (1996), 140 Nfld. & P.E.I.R. 270 (P.E.I.S.C.A.D.); Stratford (Town) v. Ellsworth (1997), 157 Nfld. & P.E.I.R. 171 (P.E.I.S.C.A.D.); Murphy v. Tignish Credit Union Ltd. and Aylward (1997), 147 Nfld. & P.E.I.R. 188 (P.E.I.S.C.A.D.); Palsky (Next Friend of) v. Humphrey, [1964] S.C.R. 580 Statutes Considered: Highway Traffic Act, R.S.P.E.I. 1988, Cap. H-5, s. 287; Civil Procedure Rules, Rule 20; The Vehicles and Highway Traffic Act, R.S.A. 1955, c William F. Dow, solicitor for the plaintiff Barry Morrison, Q.C., solicitor for the defendants Stephen Arthur Piccott and Walter Piccott Chevrolet Oldsmobile Cadillac Limited Eugene S. Murphy, Q.C., solicitor for General Motors Acceptance Corporation of Canada Limited

3 DesRoches J.: [1] This motion is brought by the defendant General Motors Acceptance Corporation of Canada Limited ( GMAC ) seeking an order for summary judgment dismissing the amended statement of claim as it relates to GMAC. FACTS [2] There are some facts upon which the parties agree. On May 25, 1993 Walter Piccott Chevrolet Oldsmobile Cadillac Limited ( Piccott ) commenced leasing vehicles from GMAC pursuant to the terms of a Rental Plan Master Lease Agreement. On May 15, a 1996 Chevrolet Lumina was leased to Piccott by GMAC pursuant to the Agreement. On December 19, 1996 this leased vehicle was involved in a motor vehicle accident. At the time of the accident, the defendant Stephen Piccott ( S. Piccott ) was operating the Lumina in which the plaintiff, John Robert Gallant ( Gallant ) was a passenger. The accident occurred at about 12:40 a.m. when the Lumina collided with an unattended parked van. [3] Gallant claims that as a result of the accident he sustained injuries including a compound fracture of his right distal radius and ulna, compound fractures of both the fourth and fifth fingers of his right hand and lacerations to his right thumb. He claims he continues to suffer some permanent partial disability and pain. [4] Gallant claims that at the time of the accident both Piccott and GMAC were the registered owners of the Lumina. However, it is agreed between Piccott and GMAC that on December 16, 1996 GMAC was the sole owner of the vehicle. [5] The Rental Plan Master Lease Agreement includes the following two paragraphs: 1. VEHICLE USE: Vehicles leased will be used by Lessee only for daily rental to third parties under Rental Agreements in such form as GMAC may approve from time to time MISCELLANEOUS PROVISIONS: (i) The terms of this Master Lease Agreement shall not be waived, altered, modified, amended, supplemented, or terminated in any manner whatsoever except by written instrument signed by GMAC and the Lessee. There is no evidence that paragraph one was ever waived, altered, modified, amended, supplemented or terminated. [6] Section 287 of the Highway Traffic Act, R.S.P.E.I. 1988, Cap. H-5 provides:

4 287. In an action for the recovery of loss or damage sustained by a person by reason of a motor vehicle upon a highway, every person driving the motor vehicle who is living with and as a member of the family of the owner thereof and every person driving the motor vehicle with the consent, expressed or implied, of the owner thereof shall be deemed to be the agent or servant of the owner of the motor vehicle and to be employed as such and shall be deemed to be driving the motor vehicle in the course of his employment, but nothing in this subsection relieves any person deemed to be the agent or servant of the owner and to be driving the motor vehicle in the course of his employment from the liability for such damages. [7] GMAC maintains that the issue to be decided on this motion is whether or not the operator of the Lumina, S. Piccott, had the consent of GMAC, expressed or implied, to be driving its vehicle within the meaning of s It is the position of GMAC that there is no genuine issue for trial as to that issue as S. Piccott did not have GMAC's consent, expressed or implied, and therefore the plaintiff's claim against GMAC as the owner of the 1996 Chevrolet Lumina ought to be dismissed summarily at this time. [8] Both the plaintiff and the defendants Piccott and S. Piccott take the position that the question as to whether or not S. Piccott was driving the vehicle with the expressed or implied consent of GMAC is a genuine issue for trial. Piccott's position is that there was expressed consent via the Master Lease Agreement or, if no expressed consent, then implied consent existed. SUMMARY JUDGMENT [9] Rule 20 of the Civil Procedure Rules relates to summary judgment. Rule provides: (1) In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest on the mere allegations or denials of his or her pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue for trial. (2) Where the court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the court shall grant summary judgment accordingly. [10] All of the parties agree as to the law applicable to motions for summary judgment, and I need not review it in any great detail here. Counsel for GMAC has referred to a number of decisions of our Appeal Division in which the Court has provided guidance in relation to the application of Rule 20: Westland Homes Ltd. et al. v. Schurman (M.F.) Ltd. (1992), 101 Nfld. & P.E.I.R. 122; Lenetine v. Robichaud et al (1996), 140 Nfld. & P.E.I.R. 270; and Stratford (Town) v. Ellsworth (1997), 157 Nfld.

5 & P.E.I.R [11] The approach of the courts of this Province to motions for summary judgment is succinctly set out in the latter case at paragraph [5] as follows: The purpose of the summary judgment procedure provided for in rule 20 of the Rules of Civil Procedure is to avoid the agony and expense of unworthy litigation. Both sides put their best cases forward and, if after giving the matter a good hard look, the judge hearing the motion concludes there is no genuine issue for trial, a summary judgment should be granted. The party seeking to avoid an order for summary judgment must set out specific facts and coherent evidence so as to show that there is a genuine issue for trial. [12] The extent of the onus on a responding party has been explained by the Appeal Division of this Court in Murphy v. Tignish Credit Union Ltd. and Aylward (1997), 147 Nfld. & P.E.I.R. 188 in these words at p. 190: The onus is on the moving party to show that the motion for summary judgment should be granted. Coincident with this onus is the responsibility of the responding party to bring forth, in response to the motion, the evidence necessary to demonstrate there are material facts in issue which give rise to a genuine issue within the context of the pleadings and which is deserving of determination by the trial process. All of this has been colloquially described in various decisions as putting your best foot forward and as playing trump or risk losing. See: MacDonald v. Robichaud and Lenentine, supra; Ontario Ltd. v. Ontario Jockey Club, 21 O.R. 547 (Ont. C.A.); MacCallum v. City of Charlottetown, [1995] 1 P.E.I.R. 78 (P.E.I.S.C.A.D.). The appropriate time to show whether there is a genuine issue for trial is at the time of the motion. It will never be in the interests of either party to hold back evidence on the plea that it will be available at trial. While parties are entitled to their time in court, they are also entitled to be relieved of claims and defences having no foundation in fact or law without being subjected to the burden of the trial process. [13] On a motion for summary judgment the judge is permitted to consult not only the pleadings, but affidavits, examinations for discovery, admissions and other evidence to determine whether there is a genuine factual dispute between the parties. At the summary judgment stage the courts must see what evidence the parties have to put before the trier of fact if a trial is held. The motions judge is entitled to assume that the record contains all the evidence the parties will present if there is a trial. ANALYSIS [14] According to the materials filed on the motion, on the night in question S. Piccott took the 1996 Lumina to drive when he left Piccott's after work. Although he was entitled in his capacity as Sales Manager, New Vehicles Sales of Piccott to a demonstrator to drive, the Lumina was not his usual demonstrator. Furthermore, S. Piccott was not involved directly with Choice-Rent-A-Car, the department of Piccott that

6 rents vehicles to its customers and the public generally. [15] The material reveals that upon leaving Piccott at about 7:30 p.m. on December 16, 1996, S. Piccott, accompanied by the plaintiff Gallant, proceeded in the Lumina to Myron's, a local lounge and dining establishment, in order to attend a customer appreciation night. He and the plaintiff left Myron's at about 10:30 p.m. and went to JR's/Ferris, a night club establishment. In his discovery evidence S. Piccott explained his reason for going to that establishment as: We had some friends that were probably going to be there, and it just seemed like the place to go that evening, so we went there. [p.82] [16] S. Piccott and the plaintiff arrived at JR's/Ferris at about!0:45-11:00 p.m. and departed about midnight planning to go to the Canton Cafe for something to eat. The accident in question occurred shortly thereafter. [17] In my opinion it is patently clear from the evidence filed on the motion that on December 16, 1996 S. Piccott was using the Lumina for his own personal use. He admits this himself in the following responses during discovery: Q. Are you guessing or do you know that you were using the Lumina as your, as your demo the night of the accident? A. It was my demonstrator the night of the accident, yes. Q. And you were using it for your personal use, correct, at the time of the accident? A. Yes. [p. 52].... Q. Right. Do you agree with me, Mr. Piccott, that on the night of the accident, at 2 a.m. in the morning, that you were using the Lumina for your personal use unrelated to a potential sale of that car, do you agree with that? A. I agree that, at the accident, the accident happened, actually, at 12:20 a.m. -- Q. I see, thank you. A. -- that evening, and, yes, I was using it for personal use. Q. Unrelated to a potential sale, correct? A. Yes. [p. 53]

7 [18] Despite his suggestions to the contrary, there is no support for concluding that S. Piccott was driving the Lumina on the night in question with a view to a potential sale or lease of the vehicle. [19] Furthermore, it is equally clear he did not have the expressed consent of GMAC to be driving the vehicle. He did not specifically ask GMAC for permission to use the Lumina, nor did he ask anyone at Piccott for authority to drive it. There is nothing in any of the evidence presented to support a conclusion that at the time of the accident in question S. Piccott was driving the Lumina motor vehicle with the expressed consent of the owner, GMAC. [20] In my opinion there is no genuine issue for trial on the question of expressed consent. [21] Counsel for Piccott submits there is an ambiguity in paragraph one of the Master Lease Agreement. I am unable to see any ambiguity. The paragraph clearly restricts the use of leased vehicles only to rental to third parties. Counsel suggests the word only refers to the form of rental agreements to be used. I cannot accept such an interpretation of the wording. [22] Having concluded there is no genuine issue for trial concerning expressed consent, there remains the question of implied consent. [23] One of the leading cases on the question of implied consent is Palsky (Next Friend of) v. Humphrey, [1964] S.C.R. 580 in which Spence J., who delivered the judgment of the Court, considered the question whether possession of the appellant Humphrey's vehicle had been acquired by the driver Harvie, who was killed in the accident which gave rise to the action, with the implied consent of the appellant Humphrey so as to make him liable for Harvie's negligence pursuant to s. 130 of The Vehicles and Highway Traffic Act, R.S.A. 1955, c. 356, which contained language similar to the present s. 287 of our Act quoted above. [24] Mr. Justice Spence quoted with approval the following words of the trial judge on the issue of implied consent: It is my conception of the meaning of that statute that in dealing with the implied consent it means that one must approach the problem in a somewhat subjective fashion from the point of view of the person who was driving. That is to say whether under all of the circumstances the person, who was driving, would have been justified in deeming that he had an implied consent to drive. [25] These comments were interpreted by Spence J. as follows: What the learned trial judge was doing was putting to himself the question whether all the circumstances were such as would show that the person who

8 was driving had the implied consent of the owner and therefore, of course, whether he would have been justified in deeming that he had such consent. [26] It is necessary, therefore, to examine the circumstances surrounding S. Piccott's use of the Lumina to determine if a genuine issue exists as to whether he would have been justified in deeming that he had the implied consent of GMAC to drive the vehicle for his own personal use. [27] On this question, counsel for Piccott argues there was a custom or practice of the use of GMAC leased vehicles by dealership employees for other than rental purposes. He has filed two affidavits, one from William Robert O'Farrell, the owner of Bordertown Pontiac Buick GMC (1991) Limited of Amherst, Nova Scotia, and another from Darren Andrew Nixon an employee of that dealership, in an attempt to establish such a practice. Counsel for GMAC objected to these affidavits arguing they offended the parol evidence rule, the language of paragraph one of the Master Lease Agreement being clear and unambiguous in limiting GMAC's consent as to the use of its vehicles. [28] Alternatively counsel for GMAC maintains that the affidavits are of no assistance to the court because: (a) (b) an alleged custom being relied upon cannot be inconsistent with the expressed terms of the written contract; and the alleged custom must be in place at the time of execution of the contract. [29] While all of these arguments have merit, I consider it appropriate, indeed necessary, to examine all the evidence submitted to determine whether there is any genuine issue for trial relating to the question of implied consent. [30] Both affidavits contain the following two paragraphs: Employees of GMAC have occasionally witnessed the trade practice of having Dealership customers take rental vehicles for a test drive with a view to a potential sale. I have never had any complaint by a GMAC employee about this trade practice. Employees of GMAC have occasionally witnessed the trade practice of Dealership employees using rental vehicles without ever entering into rental agreements. I have never had any complaint by a GMAC employee about this trade practice. [31] These statements fall far short, in my opinion, of establishing any objective justification for a belief by S. Piccott in implied consent. There is no evidence as to the identity of the Employees of GMAC, their positions in the company or whether at the time they were acting in their official capacities. There is no evidence to establish how often was occasionally. There is no evidence the unidentified employees of GMAC

9 even appreciated what they were witnessing. Furthermore there is no evidence that S. Piccott was aware of this apparent practice at Bordertown. Counsel for Piccott stated at the hearing that details concerning the matters included in these two paragraphs are available. That is too late for purposes of this motion. As noted above, it is well settled in this Province that in response to a motion for summary judgment a party must play trump or risk losing. [32] In the affidavit of S. Piccott filed on this motion there appears the following two paragraphs: From the time the Master Lease Agreement, dated May 25, 1993, was signed, and certainly up to the time of the accident giving rise to this action, the people employed by Piccott used General Motors Acceptance Corporation of Canada, Limited vehicles for multiple purposes. Both Walter Piccott and myself frequently used rental vehicles for personal use when it was deemed necessary. Both Walter Piccott, myself, and other employees of Piccott used rental vehicles for purposes of having them replenished with gasoline, for purposes of having them cleaned, for purposes of having them maintained, for purposes of picking up and dropping off customers, and for purposes of demonstrating vehicles to the public. Salesmen are salesmen for all their waking hours of the day and potential is always there, if a vehicle is able to [sic] seen, for a sale or rental. Up until the accident giving rise to this action, there was never any complaint from any representative of General Motors Acceptance Corporation of Canada, Limited to use of the rental vehicles as described above. There are two virtually identical paragraphs in an affidavit of Walter Piccott, the President of Piccott. [33] There is no explanation in the affidavits as to what personal use entailed. Certainly, the specific uses described in these paragraphs are not personal uses as suggested. It is clear from the evidence that the driving of the leased vehicles for servicing, gassing, cleaning, washing, picking up rental customers, and showing the vehicle with a view to its possible rental falls within a reasonable interpretation of permitted uses under paragraph one of the Master Lease Agreement. It appears the possible sale of the leased vehicles is not contemplated in the Agreement. [34] The discovery testimony of both Walter Piccott and S. Piccott contains little justification for a belief on the part of S. Piccott that he had the implied consent of GMAC for his particular use of the Lumina on the night in question. The most Walter Piccott could say was that GMAC was probably aware of the uses of its leased vehicles for purposes other than rental, but he could not recall any incidents which specifically would have brought such uses to GMAC's attention.

10 [35] S. Piccott acknowledged he had not asked GMAC for permission to drive the Lumina for personal use. Clearly, on the night in question he had no specific sale or rental of the vehicle in mind when he drove it. His discovery testimony includes the following exchanges: Q. Do you have any evidence to suggest that, on the evening of this accident, GMAC was aware that you were using the car for your personal use unrelated to sales or rentals? A. Not to my knowledge. [pp. 56-7].... Q. Do you agree with me that GMAC would be unaware the night of the accident that you were using the Lumina for your personal use unrelated to sales or rentals? Mr. Morrison: You asked him that question. Q. What was his answer? We weren't or we were? Mr. Morrison: He had no reason to believe that you were. Q. Thank you. Mr. Morrison: Except that, impliedly. [p. 63] [36] My detailed review of all the evidence submitted reveals no support for the proposition that GMAC was aware, or even probably aware, of the personal uses being made of its vehicles which were the subject of the Master Lease Agreement. Indeed such knowledge is specifically denied by Guy Brocks, the Operations Manager of the Commercial Lending Department of GMAC in Halifax. Without such knowledge on the part of GMAC it is impossible to impute or infer an implied consent on its part. [37] On the whole of the record submitted, I conclude there is no evidence that GMAC expressly consented to S. Piccott driving the Lumina on the evening of December 16, Furthermore, in my opinion, neither the plaintiff nor the defendants Piccott and S. Piccott have presented specific facts or coherent evidence to establish a reasonable justification for S. Piccott deeming that he had the implied consent of GMAC to drive the vehicle for the purpose of attending at Myron's, JR's/Ferris and the Canton Cafe on the night in question in the circumstances revealed by the evidence. [38] For all of the above reasons I conclude there is no genuine issue for trial as to whether or not S. Piccott had the consent, expressed or implied, of GMAC to be driving its Lumina vehicle at the time of the accident giving rise to this litigation. Therefore, the plaintiff's claim against GMAC as owner of the 1996 Chevrolet Lumina ought to be dismissed summarily. The motion for summary judgment is granted. An order shall

11 issue accordingly dismissing the plaintiff's claim in the amended statement of claim against GMAC and granting leave to GMAC to discontinue its cross-claim against Piccott. COSTS [39] GMAC has requested that the plaintiff be ordered to pay its costs of this motion and of defending the plaintiff's action. GMAC also seeks an order that it be indemnified by the plaintiff as to any costs payable to Piccott by GMAC as a result of its counterclaim. [40] Counsel for GMAC acknowledged at the hearing that, to a large extent, the plaintiff is an innocent party in this action. In my view it was entirely reasonable in the circumstances for the plaintiff to name GMAC as a defendant in his action. He was not privy to the leasing arrangement between GMAC and Piccott, and had to protect his interests as against all potential defendants. [41] Given those circumstances, I would exercise my discretion in regards to costs and order the plaintiff and Piccott to each pay one half of GMAC's party and party costs on this motion only. There shall be no costs payable by GMAC to Piccott as a result of its counterclaim against Piccott. October 27, 1999 J.