The defendant insurer brought a motion for summary judgment against a third‑party insurer seeking a declaration that the third‑party insurer provided valid coverage to the tortfeasor at the time of a motor vehicle accident.
The moving party argued the third‑party insurer had improperly denied coverage after cancelling the policy prior to the accident.
The court held that the doctrine of privity prevented the moving insurer from asserting contractual rights under the policy because it was not a party to the contract and had not obtained an assignment of rights from the insured.
Further, under s. 258(1) of the Insurance Act, a third party may only proceed directly against an insurer after obtaining judgment against the insured.
As no judgment or assignment existed, the motion for summary judgment was premature and dismissed.
