Written By: William Harding and Ryan Marinacci, Student-at-Law
Driving a vehicle without auto insurance coverage bars the vehicle owner from starting a lawsuit after a collision regardless of another driver’s negligence. This is due to the joint operation of s. 2(1) of the Compulsory Automobile Insurance Act and s. 267.6(1) of the Insurance Act, which respectively states:
Compulsory automobile insurance
2 (1) Subject to the regulations, no owner or lessee of a motor vehicle shall,
(a) operate the motor vehicle; or
(b) cause or permit the motor vehicle to be operated,
on a highway unless the motor vehicle is insured under a contract of automobile insurance.
No action by uninsured owner or lessee
267.6 (1) Despite any other Act, a person is not entitled in an action in Ontario to recover any loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile if, at the time of the incident, the person was contravening subsection 2 (1) of the Compulsory Automobile Insurance Act in respect of that automobile.
Section 2(1) CAIA applies to both the registered owner and the beneficial owner of the vehicle. The Court of Appeal for Ontario stated in R v Zwicker, 1994 CanLII 1221 (ON CA) at page 5:
The Compulsory Automobile Insurance Act is intended to ensure that every car operated in the province is insured. The term “owner” as it appears in s. 2(1) of this Act, in our view, cannot properly be limited solely to the “registered owner”. To interpret “owner” in that manner would permit the person with all the rights of common law ownership to avoid corresponding responsibilities of ownership.
In sum, responsibility for ensuring that a motor vehicle is insured under a contract of insurance rests on the “owner”. The “owner” in the context of the Compulsory Automobile Insurance Act includes the “common law owner”.
Critically, however, s. 2(1) CAIA does not apply to non-owner drivers, who are therefore not barred from starting a lawsuit for a collision even where the vehicle they were driving was not insured. In Kakish v. Bruce, 2004 CanLII 34439 (ON SC) the Court elaborated on the basis for this exception to the bar on commencing actions where the vehicle is uninsured:
 In Zwicker, Robins J.A. found that “owner” in this section encompassed the common law owner as well as the registered owner. However, implicit in the final two paragraphs of that judgment was an apparent recognition that, if the appellant had not been the common law owner of the vehicle she was driving, she would not have contravened the Act.
Indeed, the Court in Trudeau v Cavanagh, 2017 ONSC 4314 recently reaffirmed that where the driver of the uninsured vehicle is not the owner, s. 2(1) CAIA and s. 267.6(1) IA do not apply and the driver retains the right to sue:
 A mere driver of the vehicle who is not the owner would not be caught by the combined operation of s. 267.6(1) of the Insurance Act and s. 2(1) of the CAIA: Kakish v. Bruce, 2004 CanLII 34439 (ON SC),  O.J. No. 2616 (Sup. Ct.), at paras. 5-11.
What happens when the seller of a vehicle does not convey good title to a vehicle and the buyer is struck before it is registered and insured? Depending on how the seller came into possession of the vehicle, the buyer may not be barred from suing even though the vehicle is uninsured because he or she never in fact owned the vehicle.
The buyer is not the registered owner of the vehicle. Nor is the buyer the owner at common law because the seller was not. The maxim of nemo dat quod non habet states that no one can transfer a better title to goods than they themselves possess, and this is codified in s. 22 of the Sales of Goods Act. That is to say, if a seller did not have common law title at the time of sale, then such title cannot have passed to the buyer upon purchase by virtue of s. 22 SGA, which states:
- Sale by person other than owner
Subject to this Act, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by conduct precluded from denying the seller’s authority to sell
Hence, if the seller was not the common law or beneficial owner, then he or she cannot have passed ownership to the buyer, who will therefore not be barred from suing where a collision arises before the vehicle is registered and insured.
Consequently, exploring the circumstances of how a seller acquired a vehicle is critical where the bar on suing might apply. Even where the vehicle is not insured, the buyer and proposed plaintiff may never have acquired good title to the vehicle, and this could provide a strong legal basis for resisting a s. 2(1) CAIA and s. 267.6(1) IA defence raised by a proposed defendant.