An Owner May Lend A Vehicle With A Valid Prohibition Against Lending It To A Third Party

If you loan your vehicle to someone, can you impose a condition that they not lend it on to an unknown third party? In the decade since Mugford v. Weber, the law has been that owners cannot put conditions on their consent to others' possessing their vehicles that bind injured third parties. However, in its ground-breaking decision in Garrioch v. Sonex Construction Ltd., the Alberta Court of Appeal recognized an exception – an owner can validly prohibit the vehicle from being handed on to a third party.
 
Sonex Construction entrusted its truck to its employee Garrioch. Sonex policy designated drivers for each vehicle and prohibited personal use of company vehicles but the trial judge held that these policies were merely "paper" policies and not enforced. Garrioch felt he was too drunk to drive so he allowed Tessman to drive. Tessman got into an accident and Garrioch sued for his injuries.