In the recent Superior Court decision of Gibbs v Security National – Endorsement Gibbs v Security National – Endorsement our associate Damien Van Vroenhoven successfully intervened in a coverage application after Security National denied auto liability insurance for the applicant after he drove with an expired licence on the date of loss.
Justice Parghi provided a thorough review of the case law on due diligence, and relief of forfeiture, for applicants seeking auto liability coverage despite driving with an expired licence at the time of the accident.
This case is unique as it deals with COVID-related explanations for the applicant’s failure to complete the full “G” licencing process and his (mistaken) belief that his licence was not expired (he thought he was captured by a province-wide expiration extension during the lockdowns).
Justice Parghi accepted Mr. Gibbs’s explanations despite Security National’s attempts to highlight contradictions and make insinuations based on gaps in the evidence.
Notably, Justice Parghi took umbrage with Security National’s alternative arguments that the applicant could not seek equitable relief, or obtain coverage, as he was alleged to have made false statements in a prior unsworn statement to Security National.
This alternative basis for a denial of coverage was not however put to the applicant by way of denial letter at any point prior to the factum being submitted and this was found to be in contravention to an insurer’s duty of good faith.
This was a great result for Mr. Gibbs as well as our client, Definity Insurance, who would have otherwise been responsible for paying damages to the plaintiff in the companion action if Mr. Gibbs was not covered.
