Insurers have no duty when driver does not hold valid licence

Insurers are right to deny coverage and are relieved of the duty to defend the owner and driver of a vehicle involved in a collision in cases in which the driver does not have a valid license, the Ontario Superior Court of Justice ruled in Miller (Litigation Guardian of) v. Carluccio.

MacKenzie Miller, the plaintiff, and defendant Pat Carluccio were involved in an auto collision in April 2006. According to the court, Carluccio, an employee of Carluccio Construction Inc., was driving the company car, insured by Aviva Insurance Company of Canada, with a license that had expired in January of that year. Carluccio argued he did not receive a renewal form or any notice from the Ministry of Transportation that his license had expired.

Aviva denied liability to both the construction company and Pat Carluccio on the basis that driving with an expired license was a breach of statutory condition No. 4 of the Insurance Act.

Ontario Superior Court Justice Linda M. Walters ruled there was no evidence the insured corporation took any steps to ensure its drivers remained in possession of a valid driver’s license. Walters added the company had nevertheless allowed Pat Carluccio to operate the vehicle when he was not authorized by law to do so at the time.

The defendants said driving with an expired licence constituted “imperfect compliance with a statutory condition,” but Justice Walters disagreed and denied relief from forfeiture of insurance coverage. Walters also ruled that Aviva is not obliged to provide a defence to its insured where there is an allegation of breach of statutory condition. “I have already determined that there has been a breach of the statutory condition and that the defendant insured and Pat Carluccio are not entitled to relief from forfeiture,” she wrote. •