Playing with fire and subrogation waivers

A waiver of subrogation clause in the rules of a condominium owners’ association did not preclude claims against a unit owner for causing a fire

Insurance law – Property insurance – Strata corporations – Subrogation – Right of insurer to subrogation

Condominium Corp. No. 0840294 v. Oakley, [2023] A.J. No. 1225, 2023 ABKB 668, Alberta Court of King’s Bench, November 24, 2023, L.K. Harris J.

A fire occurred at a condominium building, causing damage to individual units and common areas. The condominium corporation owned the common property but had delegated management to an owners’ association, creating a hybrid scheme. The unit owners and the condominium corporation commenced actions against the owner of the unit where the fire originated, and against her daughter who was in the unit at the time of the fire. The defendants applied for a determination that the claims were barred by a waiver of subrogation clause contained in the rules of the owners’ association. The association rules required the board to obtain fire insurance including a waiver of subrogation against the condominium corporation, its agents, owners, and any member of the household or guests of any owner.

The court determined that the waiver of subrogation clause did not preclude the plaintiffs’ claims. The rules of the owners’ association had not been formally adopted under the condominium corporation bylaws and therefore did not bind the condominium corporation or owners. Moreover, the waiver of subrogation clause only applied to policies obtained by the condominium corporation, and did not apply to separate policies obtained by unit owners.

This case was digested by Joe Antifaev, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Joe Antifaev at jantifaev@harpergrey.com.

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