Youn v. 1427062 Alberta Ltd., [2018] A.J. No. 397, 2018 ABQB 241, Alberta Court of Queen’s Bench, March 27, 2018, C.L. Kenny J.

The landlord owned commercial property that included a pub and neighbouring businesses. A fire spread from the pub to the neighbouring businesses. The landlord’s insurer commenced a subrogated claim against the pub for the damage. The pub successfully applied to dismiss the claim, with the Master concluding that the landlord was barred from any action against a tenant because the lease transferred the fire risk to the landlord. The landlord appealed.

On appeal, the court considered several clauses in the lease which, collectively, led to a finding that the landlord assumed the fire risk under the lease. First, the lease provided that the tenant would be responsible if its conduct on the premises increased the cost of fire insurance. This implied that it was the landlord who intended to carry fire insurance. Second, the lease required the tenant to keep the premises in good repair, except when there was damage from fire. Third, although the lease obligated the tenant to carry insurance against burglary, glass insurance, public liability, and property damage insurance, it was silent on the issue of fire insurance. Finally, the lease provided that, if the tenant’s premises could not be repaired within 120 days of fire damage, then the terms of the lease would end. As a result, the appeal was dismissed.