Published in: Insurance Law Newsletter - 10.Jan.17 January 10, 2017

Case Summary: Court finds mortgagor had enforceable rights in administration of fire insurance policy

Insurance law – Mortgages – Duties and liabilities of mortgagor – Fire insurance – Additional named insured

Wilson v. Scotia Mortgage Corp.

Mortgagor found to have enforceable rights in policy of fire insurance taken out for benefit of mortgagee.

[2016] O.J. No. 5817

2016 ONSC 7000

Ontario Superior Court of Justice

November 14, 2016

S.F. Dunphy J.

A dispute arose between a mortgagor and a mortgagee. Following the dispute, the mortgagee placed a policy of fire insurance on the property and charged the mortgagor for that insurance. Shortly after settling the dispute a fire broke out and caused extensive damage to the home. The mortgagor was injured in the fire.

At the heart of the dispute before the court was whether the mortgagor was entitled to a direct or indirect benefit of the fire insurance the mortgagee had placed on the home.

Following the fire the mortgagor attempted to make a claim under the policy to cover the loss. He was not successful. The mortgagee and the insurer denied that the mortgagor was an additional insured under the policy. Both asserted that the loss, if any, arising from the fire could only be determined after the property was sold unless the mortgagee were to take possession and make the repairs itself. The mortgagee never committed to make repairs if granted possession. Accordingly, the mortgagor was unwilling to surrender possession due to a concern that, with there being sufficient equity in the land to satisfy the mortgage, the mortgagee would simply sell the property, not effect repairs, and the mortgagor would bear the loss.

Ultimately, the court did not go so far as to conclude the mortgagor was an additional insured under the policy but held the mortgagor had enforceable rights in the mortgagee’s administration of the policy.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact them directly at or or review their biographies at