An owner of a property could be liable for the negligence act of their property manager.

Based upon the interpretation of a Property Management Agreement (the "PMA") the Court held that an Owner was responsible for damages sustained by the plaintiff as a result of slip and fall caused by the negligence of the Property Manager.

Wight v. T.G.S. Properties Ltd.  [2008] A.J. No. 1366 Alberta Court of Queen's Bench J.M. Ross J. December 4, 2008

 

The plaintiff was injured in a slip and fall and it was agreed that the plaintiff's injuries arose out of the negligence or breach of duty of the Property Manager.  The plaintiff's claim was settled and a summary trial was held to determine whether the Owner or the Property Manager was responsible for the plaintiff's damages under the PMA.

The Property Manager and the Owner entered into the PMA which contained mutual indemnification provisions and the following provision with respect to insurance:

6.01 (Property Insurance) Owner will obtain and keep in force adequate insurance against physical damage . . . and against liability for loss, damage or injury to property or persons which might arise out of the occupancy, management, operation or maintenance of the Property covered by this agreement.  Property Manager will be covered as an additional insured in all liability insurance maintained with respect to the property.  Owner shall save the Property Manager harmless from any liability on account of loss, damage or injury actually insured against by Owner.

The court reviewed the relevant case law and noted that the key question to be determined was whether the PMA placed upon the Owner the risk of loss.  The court noted that in the case at bar, article 6.01 of the PMA expressly provided that the Property Manager would be covered as an additional insured and that the Owner agreed to save the Property Manager harmless from "any liability on account of loss, damage or injury actually insured against by Owner".  The Article placed upon the Owner the risk of loss or damage arising from the Property Manager's negligence as it clearly defined the obligation of the Owner to carry insurance against liability for loss arising out of, in particular, the management or maintenance of the building.  The court rejected arguments by the Owner that it was only protecting its own interest without benefit to the Property Manager.  The court held that the Property Manager was not liable to the Owner for injury to third parties where the insurance which the Owner covenanted to carry provided coverage for those injuries.

In the result, the court held that the Owner was responsible for the plaintiff's damages.

This case was originally summarized by jmeadows@harpergrey.com and originally edited by dpilley@harpergrey.com

 

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