A person who leases a car with an option to purchase does in fact own the car under the B.C. Motor Vehicle Act, the B.C. Supreme Court has found.
Canadian Direct Insurance (CDI) had asked the court for a declaration that Lombard General Insurance was a co-primary insurer of Nathan Dunn, who was the defendant in an action arising out of a collision involving his 2002 Ford F150 truck.
The vehicle was insured by the Insurance Corporation of British Columbia (ICBC) to the statutory minimum policy limit of $200,000, plus defence costs. It was also insured by CDI with a limit of $1.8 million over and above the ICBC policy plus defence costs.
Lombard insured Dunn’s employer, Sto:Lo Nation. CDI argued that Lombard’s policy should in fact have covered the claim above ICBC’s policy limit, with CDI paying as an excess insurer if the costs exceeded Lombard’s policy.
Lombard’s policy states it would cover Sto:Lo Nation’s employees for personally driving any automobile they did not own “in whole or in part.” Dunn was driving his father’s leased truck for work purposes, with his father’s permission.
CDI argued that since Dunn leased the truck with an option to purchase, he did not own the vehicle “in whole or in part,” and therefore the Lombard policy applied. But the B.C. Supreme Court found otherwise.
“As a lessee with the option to purchase the truck, [Norman Dunn, father of the defendant Nathan] was an owner of that vehicle under the Motor Vehicle Act because he was in possession of a motor vehicle under a contract by which he may become its owner on full compliance with the contract,” the court ruled. “As an owner under the MVA, he was also an owner under the Lombard insurance policy. His car was thus not insured by the insurance policy between Lombard and the Sto:Lo Nation.”
