The defendant, Issa Mohammed Abdulkadir, moved to set aside a default judgment obtained by Gore Mutual Insurance Company.
The judgment was for $125,000 plus costs, representing a settlement paid by the insurer in a prior litigation (Alsop litigation) where the insurer had denied coverage to the defendant and taken a Statutory Third Party position.
The defendant argued he was unaware of the current litigation and believed he was covered.
The court applied the five-factor test for setting aside default judgment from Mountain View Farms Ltd. v. McQueen.
The court found the motion was brought promptly, the defendant had a plausible explanation for not understanding communications, and an arguable defence existed regarding the insurer's right to reimbursement under s. 258(13) of the Insurance Act and a potential claim for relief from forfeiture.
Balancing the prejudice, the court found the prejudice to the defendant was more substantial.
The default judgment was set aside, and the defendant was granted 45 days to file a Statement of Defence.
