Forged driving licence cannot be validated by renewal, and insurer remains liable to third-party claimants absent wilful breach by insured.

Renewal cannot validate a forged driving licence, because renewal presupposes an existing valid licence and cannot create legality from a void document. In motor accident claims, an insured employer who bona fide engages a driver after reasonable verification does not, by that fact alone, commit a breach that relieves the insurer of liability to third parties; the insurer must prove a wilful breach attributable to the insured. The insurer remains statutorily bound to satisfy the third-party award and may pursue separate recovery rights against the wrongdoer or the insured in accordance with law.

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Issues: (i) whether a forged driving licence, if renewed by the licensing authority, becomes a valid driving licence; (ii) whether an insured employer who bona fide engages a driver holding such a renewed forged licence commits a breach of the policy so as to absolve the insurer of liability to third parties; (iii) whether the insurer remains statutorily liable to satisfy the award and can, after payment, recover the amount from the insured or the wrongdoer.

Issue (i): Whether a forged driving licence, if renewed by the licensing authority, becomes a valid driving licence.

Analysis: Renewal presupposes the existence of a licence capable of being renewed. A forged or unauthorised document is void ab initio and cannot be validated merely because a renewal endorsement was made. The statutory scheme governing grant and renewal of driving licences contemplates renewal of a validly issued licence, not creation of validity by renewal of a non-existent or forged document.

Conclusion: A forged driving licence does not become valid merely because it was renewed.

Issue (ii): Whether an insured employer who bona fide engages a driver holding such a renewed forged licence commits a breach of the policy so as to absolve the insurer of liability to third parties.

Analysis: The liability of the insurer under the motor vehicles law is directed to the protection of innocent third parties. The exclusion relating to an unlicensed driver must be confined to a wilful breach attributable to the insured. Where the insured has acted bona fide and has taken reasonable care by verifying the licence, the mere fact that the licence turned out to be forged does not, by itself, amount to a breach of the policy or the statute on the part of the insured. The burden remains on the insurer to establish a conscious or wilful breach by the insured.

Conclusion: The insured's bona fide engagement of the driver did not absolve the insurer of liability.

Issue (iii): Whether the insurer remains statutorily liable to satisfy the award and can, after payment, recover the amount from the insured or the wrongdoer.

Analysis: The statutory provisions imposing third-party insurance create a protective regime in favour of road users and require the insurer to satisfy awards within the bounds of the statute. Defences available to the insurer are limited to those expressly permitted by law. The insurer cannot defeat the third party's claim on technical grounds arising from a fraud to which the third party was not privy. At the same time, the insurer is not left remediless and may recover from the person responsible for the fraud or breach in accordance with law.

Conclusion: The insurer remained liable to satisfy the award and was left to pursue recovery rights separately.

Final Conclusion: The questions of law were answered against the insurer, the contrary view on validation of a forged licence by renewal was overruled, and the award in favour of the claimants was maintained with the appeal and cross-objections dismissed.

Ratio Decidendi: Under the motor vehicles compensation scheme, renewal cannot validate a forged driving licence, and the insurer's statutory liability to innocent third parties is not defeated unless the insurer proves a wilful breach attributable to the insured.

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