The respondent, an elderly woman, was involved in a motor vehicle accident in Florida while driving with a driver's licence that had expired four months prior.
Her automobile insurer denied coverage on the basis that she breached statutory condition 4(1) by driving without authorization.
The application judge found the respondent exercised due diligence and declared the insurer had a duty to defend and indemnify.
On appeal, the Court of Appeal held that the due diligence defence was not made out, as the respondent failed to take reasonable care regarding her licence renewal.
However, the Court held that the breach constituted imperfect compliance rather than non-compliance with a condition precedent, making relief from forfeiture available under s. 98 of the Courts of Justice Act.
The Court granted relief from forfeiture, noting the respondent's good faith, the minor nature of the breach, and the massive disparity between the loss of $1 million in coverage and the lack of prejudice to the insurer.