Tort action against driver may proceed even though claim against insurer is dismissed

The Ontario Superior Court has summarily dismissed an action against an insurer because the plaintiff did not have valid insurance on the vehicle involved in an accident. At the same time, the court commented that whether or not the same plaintiff believed he held valid insurance was a genuine issue for trial in a separate tort action against the other driver in the collision.
Attila Kovacs purchased a new vehicle from Brian Cullen Motors Ltd. on July 31, 2002. He provided his insurance information to the dealership when requested and he believed that the dealership would take care of transferring his insurance coverage to the new truck.
Kovacs was involved in a motor vehicle accident on Sept. 16, 2002. He advised his insurer, Liberty Mutual, of the collision and was informed that his new truck was not covered by any policy of insurance; that the transfer had never taken place.
Kovacs did not inform Liberty of the acquisition of a new vehicle within 14 days of its delivery. The insurer thus found he was in breach of the policy and was therefore not covered at the time of the accident.
The only possible issue between Kovacs and Liberty is whether the vehicle driven by Kovcs was insured, the court found, and there was no evidence to suggest this.
But although Kovac’s action was dismissed against Liberty in Attila Kovacs and Orsolya Kovacs vs. Brian Cullen Motors Limited and Liberty Insurance Company of Canada, a tort claim had been commenced against the driver and owner of the other vehicle involved in the accident (Kovacs v. Forbes and Enterprise Rent-a-Car Canada Limited).
If Kovacs was in breach of the Compulsory Automobile Insurance Act by failing to have insurance, he would not be able to sue for any injuries suffered and so his tort action against the other car driver could not proceed, the court reasoned.
But if Kovacs could show in a trial that he had an honest but mistaken belief of fact that there was valid insurance or the exercise of due diligence, then a breach of s. 2(1) has not occurred, s. 256.6(1) of the Insurance Act would not apply and a tort action could continue.
This is a matter to be raised by the defendant in the tort action, according to justice Lederer. “It is not before me and nothing I have determined in deciding to grant summary judgment to Liberty detracts from the plaintiff’s ability to argue that s. 2(1) has not been breached,” he noted.