Smith et al. v. T. Eaton Co. et al., (1977) 15 N.R. 315 (SCC)

JudgeLaskin, C.J.C., Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré, JJ.
CourtSupreme Court of Canada
Case DateMay 17, 1977
JurisdictionCanada (Federal)
Citations(1977), 15 N.R. 315 (SCC);92 DLR (3d) 425;[1977] SCJ No 125 (QL);[1978] 2 SCR 749

Smith v. Eaton Co. (1977), 15 N.R. 315 (SCC)

MLB headnote and full text

Smith et al. v. T. Eaton Co. Ltd. et al.

Indexed As: Smith et al. v. T. Eaton Co. et al.

Supreme Court of Canada

Laskin, C.J.C., Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré, JJ.

May 17, 1977.

Summary:

This case arose out of the destruction of a building by fire. At the time of the fire the building was occupied by a tenant of the landlord. In the tenant's lease the landlord agreed to insure the premises against fire. The fire was caused by negligent acts of an employee of the tenant. The fire insurer paid the landlord for the loss of the building and then the insurer commenced a subrogated action against the tenant for damages for negligence. The trial court allowed the action by the insurer and held that the agreement to insure was not a bar to the subrogated action by the insurer.

On appeal to the Ontario Court of Appeal the appeal was dismissed and the judgment of the trial court was affirmed.

On appeal to the Supreme Court of Canada the appeal was allowed, the judgment of the Ontario Court of Appeal was set aside and the insurer's claim was dismissed. The Supreme Court of Canada stated that a fire insurer must pay for losses from fires arising out of the negligent acts of an insured and that an agreement by a landlord to insure protects the tenant against liability for negligent acts resulting in fire losses to the landlord's building - See paragraph 10.

Landlord and Tenant - Topic 1628

The premises - Insurance - Fire loss - Effect of an agreement by a landlord in a lease to insure the premises against fire - Whether such an agreement to insure barred a claim by the landlord against the tenant for damages for negligent acts which resulted in the loss of the building by fire - The Supreme Court of Canada held that such an agreement to insure by the landlord was a bar to actions by the landlord or its insurer against the tenant - The Supreme Court of Canada stated that a fire insurer must pay for losses from fires arising from negligent acts of an insured and that such an agreement by a landlord to insure protects the tenant against liability for negligent acts resulting in fire losses to the landlord's building - See paragraph 10.

Cases Noticed:

Agnew-Surpass Shoe Stores Ltd. v. Cummer-Yonge Investments Ltd., 4 N.R. 547; [1976] 2 S.C.R. 221, refd to. [paras. 1, 22]; folld. [para. 14]; dist. [para. 26].

Ross Southward Tire Ltd. v. Pyrotech Products Ltd., 5 N.R. 541; [1976] 2 S.C.R. 35, refd to. [paras. 1, 26].

Canada Steamship Lines Ltd. v. The King, [1952] A.C. 192, refd to. [para. 10].

General Accident Fire & Life Assurance Corp. Ltd. v. Traders Furniture Co. (1965), 401 P. (2d) 157 (Ariz.), folld. [para. 14].

New Hampshire Ins. Co. v. Fox Midwest Theatres, Inc. (1969), 457 P. (2d) 133 (Kans.), folld. [para. 14].

Winkler v. Appalachian Amusement Co. (1953), 79 S.E. (2d) 185 (N.C.), refd to. [para. 14].

General Mills Inc. v. Goldman (1950), 184 F. (2d) 359, folld. [para. 15].

United Motors Service Inc. v. Hutson, [1937] S.C.R. 294, dist. [para. 16]; folld. [para. 24].

Shell Oil Co. of Canada Ltd. v. White Motor Co. of Canada Ltd. and Ziegler (1957), 8 D.L.R. (2d) 753, folld. [para. 24].

Norman v. J.L. Edwards Motor Sales Ltd. (1959), 15 D.L.R. (2d) 211, folld. [para. 24].

Authors and Works Noticed:

Corpus Juris Secundum, Vol. 5lC, p. 1003 [para. 14].

Ivamy, General Principles of Insurance Law, 2nd Ed. (1970), p. 421 [para. 21].

Counsel:

W.L.N. Sommerville, Q.C. and G. Chira, Q.C., for the appellants;

W.H.O. Mueller, for the respondents.

This appeal was heard by the Supreme Court of Canada at Ottawa, Ontario on February 23, 1977.

The judgment of the Supreme Court of Canada was delivered on May 17, 1977 and the following opinions were filed:

LASKIN, C.J.C. - see paragraphs 1 to 18.

de GRANDPRE, J., dissenting - see paragraphs 19 to 31.

JUDSON, SPENCE, PIGEON, DICKSON and BEETZ, JJ. concurred with LASKIN, C.J.C.

MARTLAND and RITCHIE, JJ. concurred with de GRANDPRE, J.

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103 practice notes
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    ...Ltd., [1976] 2 S.C.R. 221, Pyrotech Products Ltd. v. Ross Southward Tire Ltd., [1976] 2 S.C.R. 35, T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749, Bell Canada v. The Plan Group, 2009 ONCA 548, Lincoln Canada Services LP v. First Gulf Design Build Inc., [2007] O.J. No. 4167 (S.C.), Royal ......
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    ...51 D.L.R. (2d) 1 ..........................................................................................215 Smith v. T. Eaton Co., [1978] 2 S.C.R. 749, 92 D.L.R. (3d) 425 ......................305 Snider v. Salerno, [2001] O.J. No. 5752, 58 O.R. (3d) 209 (S.C.) ....................298 Sp......
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    ...Smith v Co-operators General Insurance Co, 2002 SCC 30 .............................. 405 Smith v T Eaton Co (1977), [1978] 2 SCR 749, [1977] ILR 742, 1977 CanLII 39 ...............................................................................537–39, 542 Somersall v Friedman, 2002 SCC 59 ......
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    ...Ltd., [1976] 2 S.C.R. 221, Pyrotech Products Ltd. v. Ross Southward Tire Ltd., [1976] 2 S.C.R. 35, T. Eaton Co. v. Smith et al., [1978] 2 S.C.R. 749, Bell Canada v. The Plan Group, 2009 ONCA 548, Lincoln Canada Services LP v. First Gulf Design Build Inc., [2007] O.J. No. 4167 (S.C.), Royal ......
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