| ICSC Legal Database - Cases | Monday, February 22, 1999 05:06 PM |
| Citation: |
| Amexon Realty Inc. v. Comcheq Services Ltd., 1988 O.J. No. 161 (Ont. Crt. of Appeal) |
| Issue: |
| A tenant negligently caused a fire in the leased premises, causing damage to the building and its contents and |
| forcing other tenants to vacate their premises. The landlord was indemnified by its insurer, which then |
| subrogated to the landlord's rights and brought an action against the tenant. The court held that the insurer, |
| proceeding by way of subrogation to the landlord's rights, was precluded from pursuing a claim for loss due to |
| fire caused by the tenant's negligence. The insurer, even if fully subrogated to the landlord's rights, had no better |
| claim against the tenant than the lease gave to the landlord. The landlord covenanted to insure for fire. The |
| lease obliged the tenant to pay for the cost of that insurance. The usual tenant's repair obligation had been |
| modified to exempt fire damage for which the landlord was insured. The landlord was insured for this fire damage |
| at the tenant's expense and was fully indemnified for its loss, including lost rent. The tenant had bargained for |
| the right to be free of the risk of liability for fire arising from its negligence. The landlord had to look to its insurer |
| and its fire insurance policy to recover the loss. The fact that the tenant had no insurable interest under the |
| landlord's policy only precluded the tenant from asserting a claim for its own loss under that policy, and it did |
| not speak to the claim asserted by the landlord's insurer in this case. It was the bargain, rather than the tenant |
| having an insurable interest under the landlord's policy, that was the basis upon which the landlord's insurer's |
| Classification 1: |
| Guarantees/Guarantors |
| 01596 - Legal Update - Summer 1998 |
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