| ICSC Legal Database - Cases | Monday, February 22, 1999 05:07 PM |
| Citation: |
| Amen Realty Inc. v. Comcheq Services Ltd., 1988 O.J. No. 161 (Ont. Ct. of Appeal) |
| Issue: |
| This case involved subrogation against the tenant by the landlord's insurer. The 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. In the current case, the landlord covenanted to insure for fire. The lease obligated 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 action was |
| Classification 1: |
| Insurance |
| 01678 - Legal Update - Winter 1998 |
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