The plaintiff, Mizen Holdings Corporation, initiated a subrogated action against the City of Toronto and Ontario Excavac Inc. (OE) for water losses during condominium construction, alleging negligence.
The City and OE issued third-party claims for contribution and indemnity against Mizen's contractors: YYZed Project Management, Otomic Contractors Ltd., and Shor-Cais Foundation Contractors (the "third parties").
The third parties moved for summary dismissal of these claims, arguing Mizen had no right to sue them due to contractual waivers, covenants to insure, and the anti-subrogation rule, which would, under the Giffels principle, bar the defendants' claims.
The court dismissed the motion, finding genuine issues for trial regarding the scope of the covenant to insure and concluding that the contractual waivers had not crystallized at the time of the losses.
The anti-subrogation rule was also found not to apply to uninsured losses or to prevent the defendants' claims in these circumstances, particularly where waivers were post-tort conduct.