J. Paul Dillon

The appellants' home was damaged by fire.

Their insurer denied their claim, alleging a material change in risk and false statements.

The insurer paid the mortgagee under the Standard Mortgage Clause and then sued the appellants for subrogation, obtaining summary judgment.

On appeal, the Court of Appeal held that an insurer's right to subrogation under the Standard Mortgage Clause requires two preconditions: payment to the mortgagee, and establishing that it has no liability to the insured mortgagor.

Because the insurer's liability to the insured was a genuine issue for trial, the summary judgment was set aside and the actions were consolidated.

The appellants, Van Dorn Demag Corporation and Imperial Eastman, appealed a trial judgment finding them liable for failing to warn the respondent, Siemens Automotive Limited, of the risks associated with reusing repaired hoses.

The Court of Appeal dismissed the appeal, finding that Siemens' inadequate maintenance program did not negate the appellants' duty to warn, as Siemens lacked knowledge of the specific dangers.

The court also upheld the trial judge's apportionment of 15 percent liability to Siemens and rejected Imperial Eastman's argument that it was protected by the learned intermediary doctrine or its catalogue warning.