The Court held that because the landlord did not covenant to insure the property, the landlord’s insurer was entitled to bring a subrogated claim as against the tenant for damages allegedly caused by the negligence of the tenants

Sooter Studios Ltd. v. 74963 Manitoba Ltd. (c.o.b. as Sooter Bridal Salon), [2005] M.J. No. 194, Manitoba Court of Queen’s Bench

The landlord’s insurer brought a subrogated claim against the Defendants seeking recovery of damages caused by fire. The Defendants brought an application seeking an order for summary judgment dismissing the claim.

The Court held that the waiver of subrogation clause did not apply in the circumstances to the defendant V. Kresz, who was a named insured in the policy. The waiver of subrogation clause must be read in connection with the declaration page of the policy which clearly limited V. Kresz’ coverage to a different piece of property than the property in question.

The Court found that the provisions of the lease fell short of a covenant by the landlord to insure, and that such a covenant could not be inferred. The Court held that the defendants failed to show that the parties had intended the risk of loss to pass from the tenant to the landlord. As such, the insurer was not barred from bringing a subrogated action against the defendants.

The Court held that although the landlord was not a named insured under the policy, the insurer was authorized to bring the subrogated action in the name of the landlord because the named insured was the sole shareholder and principle of the landlord. The Court thus was not required to decide whether the insurer was entitled to bring the subrogated action in the name of the landlord as an unnamed insured.

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