The defendants moved to set aside a noting in default in a tort action arising from a motor vehicle accident after the insurer settled the injured plaintiffs’ claims, obtained an assignment of their cause of action, and sought judgment against the insured defendants for the settlement amount.
The court held that the insurer could not rely on s. 258(13) of the Insurance Act because no judgment had been obtained by the original plaintiffs against the insured defendants.
The non‑waiver agreement also did not permit recovery in the existing action, as the proceeding did not determine coverage obligations between insurer and insured.
Applying the discretionary test under Rule 19.03(1), the court found the defendants had demonstrated a continuing intention to defend and reasonably relied on their insurer to do so.
The noting in default was set aside, also independently invalid because the statement of claim had been served outside the six‑month limit in Rule 14.08 without an extension.
