The plaintiffs, James Dick Construction Limited and Mara Limestone Aggregates Ltd., brought an action for damages arising from a fire loss involving two leased buildings.
The defendants, Courtice Auto Wreckers Limited et al., argued the claim was barred by the plaintiffs' covenant to insure.
The court found that the landlord's covenant to maintain general property insurance sufficient to cover replacement costs allocated the risk of loss, including fire, to the landlord, thereby barring the action against the tenants.
The court also found that the defendants did not breach the lease regarding sprinkler system maintenance and that their actions did not cause the damage.
Had damages been awarded, they would have been based on diminution in value, and private insurance proceeds would not have been deductible.
