A split Ontario ruling could change how property insurers pursue subrogation when the cause of a fire cannot be determined.
In a decision released April 14, 2026, the Ontario Superior Court of Justice granted partial summary judgment in Chatham Polish Canadian Club v. Grand Gold Incorporated, 2026 ONSC 2193 - a negligence case stemming from a fire that destroyed two buildings on Inshes Avenue in Chatham on May 19, 2021.
The Polish Club operated a 7,000-square-foot social club and rental hall at 281 Inshes Avenue. Right next door - what appears to have been just inches away - stood a vacant 18,000-square-foot former industrial building at 285 Inshes Avenue, owned by Grand Gold Incorporated and Howard Gold, an officer, director, and shareholder of the company. Gold acquired the property through a municipal tax sale in 2013. All utilities - water, electricity, and natural gas - had been disconnected before the purchase and stayed off through the day of the fire. The building had no working sprinklers, no fire alarms, no smoke detectors, no security cameras, and no motion-activated lighting.
The property also had a persistent trespasser problem. Robert Bushey, a nearby resident and neighbourhood watch coordinator, testified he saw individuals entering through broken windows and unsecured doors several times a month. He contacted police approximately twelve times in the eighteen months before the fire. On one occasion, officers found roughly 10 to 12 people inside, along with sleeping bags, personal belongings, and what appeared to be stolen goods.
On the morning of May 19, 2021, fire broke out inside the Gold property and spread to the Polish Club, completely destroying both structures. Forensic expert Mazen Habash of OCI Group, retained by the plaintiff, concluded that human activity was the most probable cause but could not determine whether it was accidental or deliberate. The fire was classified as undetermined.
Justice Dubé ruled that because no specific cause could be established on a balance of probabilities, the fire was deemed "accidental" under s. 76 of Ontario's Fire Protection and Prevention Act - which bars actions against property owners when a fire "accidentally begins" on their land. Following Neff v. St. Catharines Marina Ltd., a fire that cannot be traced to a particular cause qualifies as accidental. Claims tied to the fire's origin - negligence, nuisance, and strict liability - were dismissed.
But the court did not close the door entirely. It denied summary judgment on a separate claim: that the defendants failed to take reasonable steps to prevent the fire from spreading. Citing Moore v. 7595611 Canada Corp., 2021 ONCA 459, the court held that a fire's origin does not shield a property owner from liability for failing to take reasonable precautions. The defendants had not provided expert evidence on the applicable standard of care, and the absence of sprinklers, alarms, and surveillance - combined with the buildings' apparent extreme proximity - raised a genuine issue for trial.
For claims professionals, the message is clear: even when s. 76 blocks recovery on the cause of a fire, the manner of its spread may still ground a viable claim. For commercial underwriters, the decision highlights the scrutiny courts may apply to how owners of vacant industrial properties manage fire risk - and what mitigation measures they are expected to have in place.
A separate proceeding against John Bradley Campbell and Insurance Store Inc. for allegedly inadequate coverage remains unresolved. No costs were ordered. The fire-spread negligence claim proceeds to trial.
