Ross Southward Tire v. Pyrotech Products

Ross Southward Tire v. Pyrotech Products

Majority: A covenant in a commercial lease requiring the lessee to pay the landlord's insurance rates, read reasonably and in a business sense, transfers the risk of fire loss (including loss caused by the lessee's negligence) to the landlord upon presentation of the insurance bill and places the matter thereafter...

Source-derived case information.

Citation
[1976] 2 SCR 35
Parties
Appellant Plaintiff: Ross Southward Tire Limited; Appellant Plaintiff: David Harper; Appellant Plaintiff: John Lalonde; Respondent Defendant: Pyrotech Products Limited; Respondent Defendant: Robert Langevin; Respondent Defendant: Jeffery Cairns; Respondent Defendant: Roberta McCallam; Respondent Defendant: E. Daniher
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
26 June 1975
Procedural Posture
Appeal / Supreme Court of Canada Judgment on Appeal From the Court of Appeal for Ontario
Outcome
Appeal allowed (majority); Beetz and de Grandpré JJ. dissenting
Legal Topics
Fire Insurance, Tenant Negligence, Subrogation by Insurer, Covenant to Pay Insurance Premiums, Allocation of Risk Under Commercial Lease
Source Language
english
Insurance Lease Tort Negligence Subrogation Property Fire Insurance Tenant Negligence Subrogation by Insurer +2 more

Source-derived case record

Summary, issues, holding and outcome

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Parties

Ross Southward Tire Limited

Appellant Plaintiff

David Harper

Appellant Plaintiff

John Lalonde

Appellant Plaintiff

Pyrotech Products Limited

Respondent Defendant

Robert Langevin

Respondent Defendant

Jeffery Cairns

Respondent Defendant

Roberta McCallam

Respondent Defendant

E. Daniher

Respondent Defendant

Procedural Posture

Appeal / Supreme Court of Canada Judgment on Appeal From the Court of Appeal for Ontario

Legal Issues

  1. 1 Whether a tenant’s covenant to pay insurance rates under a lease transfers the risk of fire loss (including loss caused by the tenant’s negligence) to the landlord/insurer
  2. 2 Whether payment of insurance premiums by the tenant makes the tenant an insured under the landlord’s policy or otherwise defeats landlord/insurer subrogation against the tenant
  3. 3 Whether the insurer as subrogee can recover from the negligent tenant despite the lease provision requiring the tenant to pay insurance rates

Ratio Decidendi

Majority: A covenant in a commercial lease requiring the lessee to pay the landlord's insurance rates, read reasonably and in a business sense, transfers the risk of fire loss (including loss caused by the lessee's negligence) to the landlord upon presentation of the insurance bill and places the matter thereafter between landlord and insurer; accordingly the insurer as subrogee has no basis to claim against the tenant.

Court Disposition

Appeal allowed (majority); Beetz and de Grandpré JJ. dissenting

Orders

  • Judgments below set aside
  • Action dismissed