Summary: This case addressed whether a commercial lease allowed the landlord's insurer to bring a subrogated action against a tenant for damages caused by a fire, allegedly due to the tenant's negligence. The issue centered on whether the tenant’s payment of a share of the landlord’s insurance premiums precluded such an action under the lease terms.

Key Points:

• Background: Fire occurred in a unit leased by Universal Designs Ltd. from Priestly Demolition Inc., causing significant damage. The insurer, acting for Priestly Demolition, pursued recovery from Universal Designs, attributing the fire to their negligence.
• Legal Issue: The main issue was whether the lease's provisions, particularly those concerning indemnification and insurance, allowed for a subrogated claim by the insurer against the tenant.
• Motion Judge's Decision: The motion judge ruled that the terms of the lease, read as a whole, did not indicate that Universal Designs should be deprived of the insurance benefits to which it contributed. This interpretation barred the subrogated action.
• Court of Appeal Ruling: The Court of Appeal upheld the motion judge's decision, agreeing that the lease did not explicitly permit subrogation against the tenant in this context. The lease's indemnity provisions were not sufficient to override the general understanding that the tenant’s contributions to insurance were meant to protect against such claims.

Outcome: Appeal was dismissed, affirming that the landlord’s insurer could not pursue a subrogated claim against the tenant under the terms of the lease. Costs were awarded to the respondent as agreed upon by counsel at $6,500.