Prime Insurance Company Ltd v Infinity Tyres Ghana Ltd (GJ/0619/2023) [2025] GHAHC 123 (27 June 2025)

IN THE SUPERIOR COURT OF JUDICATURE, IN THE HIGH COURT OF JUSTICE (GENERAL JURISDICTION DIVISION, COURT 12) ACCRA, HELD ON THE 27TH DAY OF JUNE 2025 BEFORE HIS LORDSHIP JUSTICE AYITEY ARMAH-TETTEH SUIT NO: GJ/0619/2023 PRIME INSURANCE COMPANY LTD. - PLAINTIFF VRS INIFINITY TYRES GHANA LTD - DEFENDANT --------------------------------------------------------------------------------------------------------------------- ------------------ PARTIES: - PLAINTIFF REPRESENTED BY DANIEL OSEI AGYEMANG DEFENDANT ABSENT COUNSEL: - FRANCIS OHENE, ESQ., WITH HIM JAMES AKAKPO FOR PLAINTIFF PRESENT FOR TONNY NYARKO, ESQ., WITH ANITA DABI FOR SAMUEL CODJOE THE DEFENDANT PRESENT ----------------------------------------------------------------------------------------------------------- J U D G M E N T ---------------------------------------------------------------------------------------------------------- INTRODCUTION Page 1 of 24 [1] The Plaintiff is an Insurance Company incorporated under the laws of Ghana. Jay Kay Industries, which deals in paper products, is an insurer of the Plaintiff took an All Risk Insurance Policy with the Plaintiff for its stock in trade. The Defendant deals in car tyres and batteries. The Plaintiff's claim arises from the fire outbreak that occurred on 7th January, 2022. The fire started from the Defendant’s premises and spread to Jay Kay’s premises, destroying its stock in trade. Jay Kay Industries, as the insured of the Plaintiff, successfully made a claim on the Plaintiff in respect of the destroyed stock. The Plaintiff has mounted this claim against the Defendant, seeking to enforce its rights of subrogation against the Defendant. The Defendant denies the claim of the Plaintiff. The fundamental question that this court is called upon to answer is whether the Defendant is responsible for the outbreak of the fire and its spread to Plaintiff’s insured premises destroying its stock and, as a consequence, liable to the Plaintiff's Subrogated claim. PLAINTIFFS’ PLEADINGS [2] The Plaintiff avers that it is an Insurance Company and Jay Kay Industries and Investment Limited, which is its Client, is engaged in the supply of paper products. That Jay Kay took an asset all risk insurance policy with the Plaintiff for its stock in trade on 9th July 2021 to expire on 8th July 2022. It is the case of the Plaintiff that on Friday, 7th January, 2022, at about 7 O’clock in the forenoon, a warehouse belonging to the Defendant was engulfed in fire. [3] Plaintiff avers that the fire, which emanated from Defendants’ warehouse, spread to the adjoining properties, including the warehouse of Jay Kay destroying its stock in trade. According to the Plaintiff, personnel of the Ghana National Fire Service were called to extinguish the fire. A comprehensive investigation report dated 29th April, 2022 was submitted by Director of Operations of Ghana National Fire Service which established Page 2 of 24 that the cause of the fire outbreak was as a result of electrical fault from the Defendant’s server room. [4] It is the case of the Plaintiff that the report also contains an estimated cost of damage caused by the fire to Jay Kay’s stock destroyed, amounting to Six Million, three Hundred and sixty-seven thousand and five Ghana Cedis (GHC6,367,005). According to Plaintiff Jay Kay put in a claim for the recovery of Six Million, Three Hundred and Sixty-Seven thousand and five Ghana Cedis (GHC6,367,005), being the value of stock in trade destroyed as a result of the fire outbreak. [5] Plaintiff admitted liability based on the terms and conditions of the Insurance Policy and indemnified Jay Kay based on an adjusted amount of One Million, Nine Hundred and Forty Thousand, Six Hundred and Sixty-Eight Ghana Cedis, Seventy-Nine pesewas (GHC1,948,668.79) in accordance with the terms and conditions of the policy. It is the case of the Plaintiff that the Defendant was put on notice about the pendency of the claim, and if admissible, the Company shall enforce its rights of subrogation against the Defendant. [6] Plaintiff therefore claim against the Defendant for: 1. Recovery of the sum of One Million, Nine Hundred and Forty Thousand, Six Hundred and Sixty-Eight Ghana cedis, Seventy-Nine pesewas (GHC1,948,668,79) being amount paid to Jay Kay Industries and Investment as a claim for the value of stock destroyed in fire outbreak. 2. Interest on relief (1) at the prevailing Commercial Bank rate from 25th November, 2022 till the date of final payment. 3. Costs. DEFENDANTS’ PLEADINGS Page 3 of 24 [7] It is the case of the Defendant that its warehouse and offices were engulfed in fire on 7 January 2022. Upon noticing the fire, its security personnel called in personnel from the Ghana Fire Service, who visited the scene to control the fire and eventually extinguished it. According to the Plaintiff, 7 January 2022 was a statutory public holiday and thus its offices and warehouses were closed, yet, being a public holiday, its Country Manager, upon being informed of the fire, quickly moved to the scene. [8] According to the Defendant, the Fire Service personnel took control of the whole scene and prevented all personnel, including officials of the Defendant, from entering the fire scene as it performed its official duties. [9] It is the case of the Defendant, prior to the incident, there was an electricity blackout in the whole area, and the report of the Fire Service states that the main electrical switch was found in the “off” position. The Defendant contends that the Defendant, who had turned off its main electrical switch even before the fire broke out, could not be responsible fire and losses thereby. [10] According to the Defendant, because it deals in tyres and batteries, it has always been cautious of the risk of fire, and for this purpose, it has installed three electrical connections to supply power to its factory premises. The first connection supplies power to its main yard, the second to its service centre, and the third to the outside of the factory premises and at the close of every business day it shuts the switches at its mains yard and its service centre, leaving power only for the outside premises. [11] The Defendant contends that it is due to this safety of switching off power to the main yard and service centre after close of business daily that in the course of its investigations, the Fire Service found that the main electrical switch was at the “off” position. Page 4 of 24 [12] According to the Defendant, in addition to maintaining and observing fire safety standards at its premises, at the time of the fire, it had a valid fire certificate issued by the Fire Service. In addition, all electrical connections at the its premises had been properly installed and fitted; and apart from wires that were naturally burnt due to the fire, all meters and circuit breakers serving the Defendants’ premises were intact. [13] The Defendant contends that it is not responsible in any way whatsoever and or howsoever for the fire or any loss sustained by anyone as a result of the fire or the activities of the fire Service in extinguishing the fire. DETERMINATION OF ISSUES [14] In my view, the following issues are the fundamental issues for the determination of the suit. 1. Whether or not the Defendant is liable for the fire outbreak that spread to the premises of Jay Kay, causing damage to its stock in trade 2. Whether the Defendant is liable to Plaintiff’s subrogated claim ISSUE 1 [15] It is the case of the Plaintiff that on Friday, 7 January 2022, at about 7 pm, the Defendant's warehouse was engulfed in fire and spread to adjoining properties, including the warehouse of Jay Kay, destroying its stock. The Claims Manager of the Plaintiff Company testified as follows: I will say that on Friday 7th January 2022 at about 7 O’clock in the forenoon, the warehouse belonging to Defendant was engulfed in fire. I will say that the fire which emanated from Defendant’s warehouse spread to the adjoining properties including the warehouse of Jay Kay Industries and Investments Limited. I will say Page 5 of 24 that personnel of the Ghana National Fire Service were called to extinguish the fire and they were able to extinguish the fire at about 10: 51 in the forenoon, close to four hours after the fire started. I will say that a comprehensive investigative report dated 29th April, 2022 was submitted by the Director of Operations of Ghana National Fire Service established that, the cause of the fire outbreak was as a result of electrical fault from Defendants sever room. Under cross-examination of the Claims Manager, this was his testimony about the cause of the fire. Q. But you will not dispute the fact that, Clause B(1) of Exhibit A, is essentially on properties excluded from the policy. A. I do not agree because the fire, according to the Fire Service report, started from the server room of Infinity Tyre, who is not our insured for this exclusion as stated in B(1)(D). Also, the policy covers stock in trade which was affected by a covered peril which is fire emanating from the adjoining warehouse. Q. Is it not Plaintiff’s claim that, as a result of fire from Defendant’s [remises, properties belonging to Jay Kay and insured by Plaintiff under the policy, exhibit A , Plaintiff is entitled to refund of money paid to Jay Kay. A. Yes, because in the contract between Prime Insurance and Jay Kay, under the same Exhibit A, General Condition No. 5 gives us the right to subrogate when the damage is caused by a tortfeasor, which in this case, according to the Fire Service Report, the fire started from the Server Room of Infinity Tyres. Q. Plaintiff is able to claim under clause 5 of Exhibit A because properties of Jay Kay which are insured under Exhibit A, have been affected by fire alleged to have started from the Defendant’s premises. Is that not so. Page 6 of 24 A. Yes, because the fire is covered peril under Assets All Risk Policy. Further Q. Are you aware that the Fire Service did not find any act of negligence on the part of Defendant in respect of the alleged fire incident. A. No, because according to the Fire Service Report, the main electrical switch was off, which purport that, there should not be any power supply to the main building. In this instance, it can be alleged that the only way power can get to the sever room is through a by-pass which is commonly referred to illegal connection because as a Certified Risks Manager, when main electrical switch are put off in a building, all electrical power supply to the building are cut off. It can be gleaned from the pleadings of the Plaintiff and the evidence of the Claims Manager of the Plaintiff’s Company that the Plaintiff’s claim against the Defendant is simply based on the fact that the fire started in the server room of the Defendant, without establishing it was an intentional act or negligence on the part of the Defendant that caused the fire outbreak. What the Plaintiff seems to be saying without more is that since the fire started from the server room of the Defendant’s premises, the defendant is liable for the fire outbreak. Was the cause of the fire as a result of an intentional act or negligence of the Defendant? Better put, was it caused by an act of commission or omission of the Defendant? I do not think so. It is a basic legal principle that a person cannot be liable for damage caused to another unless they intended to cause the damage or have been negligent. At Common law, a person will be liable for damage done by fire in three situations. That is, if the damage was caused: Page 7 of 24 1. Wilfully; 2. By negligence 3. By the escape, without negligence, of fire which was brought into existence by some non-natural user of the land In his book Introduction to the LAW OF TORTS IN GHANA, Kofi Kumado at page 7 and 8 gave the basis of liability in tort when he stated: Liability in the Ghanaian law of torts which is derived largely from English common law is thus based principally on fault, i.e. liability in tort is based on either defendant did the act either intentionally or negligent. But there also remains what Lord Macmillan referred to in Read v Lyons as vestigial relics( i.e. pockets) of strict liability, e.g Rylands v Flecther- a decision which is based on the principle sic uti tuo ut alienum lasdet. By intentional conduct is meant a party’s advertence to his conduct and its consequences, combined with desire for consequences. Intention requires proof……………………. Negligence, as a tort by itself, is the most important tort today. As has been pointed out by others, the centre of gravity of tort law has shifted to negligence. In an action for the damages for injury caused to a neighbours property, liability for the cause and spread of fire to a neighbour’s property to cause damage is therefore not strict but dependent on either an intentional act or negligence of the defendant. (GRAMMERLY) So for the Plaintiff to establish that the Defendant is liable for the outbreak of the fire, the Plaintiff has to establish that either the Plaintiff intentionally caused fire outbreak or it was caused by the negligent conduct of the Defendant. Page 8 of 24 When a fire starts on a property and causes damage to a neighbour's property, the property owner or occupier could be held liable to the neighbour. The liability of a property owner for damages caused to a neighbour due to a fire originating from the premises is mainly assessed based on principles of negligence and duty of care. CAUSE OF FIRE The defendant on 24 February 2025 tendered through the Plaintiff’s representative the fire service report as Exhibit 1. Exhibit 1 was addressed to the Plaintiff. The investigation conducted by the crew of the Ghana Fire Service revealed, among others, the following: 1. The fire had involved nine (9) office cubicles on the first floor of a two storey building occupied by Defendant, West African Automotive Logistics, Tyre Plus Ghana Limited and part of the ceiling of Jay Kay warehouse. 2. The fire started long before it was detected, considering the extent of burnt and damage before the arrival of GNFS. 3. The main electrical switch was found at “OFF” position. 4. The direction of burn indicated that the fire started from the server room(room of origin) and spread to other offices. 5. Electrical appliances and office equipment including part of the ceiling of the adjoined warehouse which belonged to Jay Kay Company Limited were burnt. The Defendant cannot be held for strict liability in respect of the fire outbreak. The circumstances in which strict liability is imposed under the rule in Rylands v Fletcher has been significantly restricted. In Gore v Stannard (trading as Wyvern Tyres) [2012] EWCA 1248 the Court held that the strict liability rule in Rylands v Flecther does not apply to the facts of the case because there was no escape of a dangerous thing brought onto the Defendant’s land , but rather Page 9 of 24 the escape of fire which was not created by the Defendant. The storage of tyres did not constitute a non- natural use of the land or an exceptionally dangerous activity. The statutory defence of accidental fires applied, or no negligence was established. In that case, .Mr Stannard carried on business supplying, fitting and balancing car and van tyres on a trading estate in Hereford. Unsurprisingly, he kept a large stock of tyres on his premises. Tyres do not catch fire easily, but once ignited they are difficult to put out. An electrical fire broke out in the workshop and spread, via the tyre storage area, to Mr Gore’s premises next door, which were totally destroyed. Mr Gore brought a claim in negligence and in strict liability. His claim in negligence failed. His strict liability claim, based on Rylands v Fletcher, succeeded. Mr Stannard appealed and won. Although the decision to allow the appeal was unanimous, each member of the Court of Appeal gave a detailed judgment. Ward LJ considered the classic 20th century Rylands v Fletcher authorities (Rickards v Lothian; Read v Lyons; Cambridge Water v Eastern Counties Leather; and Transco v Stockport MBC), from which he extracted the following approach to be applied in “non-fire” cases. 1. The defendant must be the owner or occupier of land. 2. He must bring or keep or collect an exceptionally dangerous or mischievous thing on his land. 3. He must have recognised or ought reasonably to have recognised, judged by the standards appropriate at the relevant place and time, that there is an exceptionally high risk of danger or mischief if that thing should escape, however unlikely an escape may have been thought to be. 4. His use of his land must, having regard to all the circumstances of time and place, be extraordinary and unusual. Page 10 of 24 5. The thing must escape from his property into or onto the property of another. 6. The escape must cause damage of a relevant kind to the rights and enjoyment of the claimant’s land. 7. Damages for death or personal injury are not recoverable. 8. It is not necessary to establish the defendant’s negligence but an Act of God or the act of a stranger will provide a defence. Boston massachusets Ward LJ then considered the real issue in the case, namely whether there was a different or special rule in cases involving damage caused by the spread of fire. That there was a different rule may have been thought likely as a result of the 1919 decision of the Court of Appeal in Musgrove v Pandelis, in which strict liability was imposed for a fire started as a result of an explosion in the carburettor of a garaged car. Ward LJ concluded, however, that there was no special rule, and that the principles set out above should also apply in fire cases, as well as in other more classic examples of escaping dangerous things. As a result, cases of fire damage were likely to be very difficult to bring within the rule in Rylands v Fletcher because (1) in order for the rule to apply, it is the “thing” which had been brought onto the land which must escape, not the fire which was started or increased by the “thing”; (2) while fire may be a dangerous thing, the occasions when fire as such is brought onto the land may be limited to cases where the fire has been deliberately or negligently started by the occupier or one for whom he is responsible; and (3) in any event, starting a fire on one’s own land may well be an ordinary use of that land. Musgrove v Pandelis should, therefore, be relegated to a footnote in the history of Rylands v Fletcher. The moral of the story for Ward LJ was “make sure you have insurance cover for losses occasioned by fire on your premises”. Etherton LJ agreed that, in the light of Transco v Stockport, the facts of the case did not satisfy the basic requirement of Rylands v Fletcher liability Page 11 of 24 that there must have been an escape of something which the defendant had brought onto his or her land. Even if there was a different requirement for fire cases, where what has escaped is fire generated from something that the defendant has brought onto his or her land (the approach taken in a number of fairly recent cases, such as HHJ Coulson QC;s decision in LMS International v Styrene Packaging and Insulation Ltd), such a principle did not apply in the present case, because tyres are not easily set alight, and so do not pose any inherent danger of catching or causing fire. In any event, Mr Stannard’s use of his property was not a non-natural use of his land for the purposes of the Rylands v Fletcher principle. Lewison LJ agreed with Ward LJ, but would have gone even further in limiting the scope of strict liability in relation to fire. His 32 page judgment is a fascinating historical analysis of the development of tort law to suit changing social conditions, from well before the Great Fire of London in 1666, through the litigious age of the railway, to modern times. In summary, before the enactment of section 86 of the Fires Prevention Metropolis Act 1774, liability only ever applied to fires which were deliberately kindled (which obviously occurred all the time in the medieval world). McKenna J was right in the 1967 case of Mason v Levy Autoparts of England Ltd when he criticised the decision of Bankes LJ in Musgrove; Judge Thornton QC (in Johnson v BJW Property Developments Ltd) and Judge Coulson QC (in LMS International v Styrene Packaging) were wrong to criticise McKenna J’s reasoning. In a masterly piece of judicial trashing, Lewison LJ decided that Musgrove v Pandelis was wrong; unhistorical; inconsistent with the subsequent (1971) decision of the Court of Appeal in Emanuel v GLC; a “decision on special facts”; and inconsistent with Bankes LJ’s own subsequent decision in Job Edwards v Birmingham Navigation Proprietors. For good measure, Musgrove misinterpreted previous cases and wrongly distinguished them, and misstated (and extended) the principle in Rylands v Fletcher. The principle which Bankes LJ formulated was unnecessary to the decision, and wider than the facts of the case warranted. It was Page 12 of 24 unsound authority, and should no longer be followed. As regards fires which were not deliberately kindled, the law is as stated by the Privy Council in Goldman v Hargrave, namely that an occupier of land is not liable for the initial outbreak of fire, whether that is due to natural causes or human agency. HE HAS A DUTY, HOWEVER, TO DO WHAT IS REASONABLE TO PREVENT THE SPREAD OF THE FIRE. IF HE IS NEGLIGENT IN PREVENTING THE SPREAD OF THE FIRE, THE STATUTORY DEFENCE UNDER SECTION 86 OF THE ACT OF 1774 WILL FAIL. IF HE IS NOT NEGLIGENT, THE DEFENCE WILL SUCCEED. The end, then of Musgrove v Pandelis. The end, too, of judicial efforts, over many years, to modify Rylands v Fletcher in order to impose strict liability for damage caused by the spread of fire which started accidentally or, at least, non-negligently. Andrew Davies October 2012 Even though the Plaintiff did not base his claim on negligence or an intentional act of the Defendant, in his written address, Counsel for the Plaintiff appears to argue that, based on the pleadings and evidence before the Court, the defendant has been negligent and has also disregarded the safety requirements standards. A party basing his claim on negligence need to specifically plead negligence. See Asante Kramo alias Kumah v. Attorney-General [1975] 1 GLR 319-357. The failure of the plaintiff to prove that the particulars of negligence (as pleaded and proved) caused the gangrene, was not fatal to her claim because the evidence raised a presumption of negligence on the part of the hospital staff, i.e. a case of res ipsa loquitur. Further the expert medical evidence showed that, in all the contingencies, the bacteria which caused the gangrene could only have entered the plaintiff's body if the defendant's servants, namely, the nurses or those in charge of the infusion apparatus, the needle and the drip stand, were prima facie Page 13 of 24 negligent. There was no evidence led to show that the equipment was sterilised, therefore there was no evidence by the defendant to rebut such negligence, and he was liable in damages for the loss caused to the plaintiff on the principle of respondeat superior. Dicta of Goddard L.J. in Gold v. Essex County Council [1942] 2 K.B. 293 at pp. 309 and 312-313, C.A.; of Gibson C.J. in Ybarra v. Spangard 25 Cal. 2d 486 (1944); of Denning L.J. in Cassidy v. Ministry of Health [1951] 1 All E.R. 574 at p. 588, C.A.; Bennett v. Chemical Construction (GB) Ltd. (supra) and Nelson v. Klutse (supra) applied In Oppong Banahene vs. Shell Ghana Limited [2017] DLSC 2088 referred to me by Counsel for Defendant, Benin JSC stated thus: Order 11 Rule 8 of the High Court (Civil Procedure) Rules, 2004, C.I. 47 requires inter alia, that a party should plead specifically any matter, both factual and legal, which he alleges makes the claim or defence of the opposite party not maintainable. Negligence is one such matter that ought to be raised on the pleadings to enable the other party the opportunity to react to it and not to be taken by surprise. But the Plaintiff did not raise this in his pleadings, not even in his reply after the defendant had denied the existence of any agreement between them. In the present case, the Plaintiff did not plead negligence by specifying how the defendant was negligent in causing the fire. Even though the Plaintiff did not plead negligence specifying how the defendant was negligent in causing the fire, if the evidence on record clearly shows that the Defendant was negligent, the court would hold the Defendant liable for the cause of the fire outbreak. In Oppong Banahene v Shell Ghana Limited (supra) Benin in relying on the cases of Edward Nasser & Co. Ltd. v. McVroom & Another (1996-97) SCGLR 468; Amuzu v. Page 14 of 24 Oklikah (1998-99) SCGLR 141; Apeah and Another v. Asamoah (2003-2004) 1 SCGLR 226 opined as follows: The principle deducible from these cases is applicable to an issue founded on negligence, that even if it is not pleaded but evidence is admitted on the record without objection and the evidence is not rendered inadmissible on legal grounds, the court cannot ignore it, unless it will result in a miscarriage of justice. In the instant case, the Plaintiff did not specifically plead that the fire outbreak was a result of the negligent conduct of the Defendant, and it also did not lead any sufficient evidence to establish that the Defendant was negligent in that regard. From the investigation conducted by the Fire Service personnel who went to extinguish the fire, the cause of the fire was an electrical fault in the server room. The investigation also revealed that the main electrical switch was found at the “OFF” position. There is no evidence that the electrical wires had been negligently installed or there was a by pass- referred to the Claims Manager as illegal connection. In my view the Defendant took a reasonable step to prevent an outbreak of fire and cannot be said to have been negligent. The evidence of Plaintiff’s Claims Manager supports the finding that the Defendant took a reasonable step to prevent a fire outbreak through electrical power. This is what he said. Q. Are you aware that the Fire Service did not find any act of negligence on the part of Defendant in respect of the alleged fire incident. A. No, because according to the Fire Service Report, the main electrical switch was off, which purport that, there should not be any power supply to the main building. In this instance, it can be alleged that the only way power can get to the sever room is through a by-pass which is commonly referred to illegal connection because as a Certified Risks Manager, when main electrical switch are put off in a building, all electrical power supply to the building are cut off. Page 15 of 24 In the case of Blyth v Birmingham Waterworks (1856) 11 Ex 781 at 784 Baron Alderson said this often-cited words: “Negligence is the omission to do something which a reasonable man guided upon those considerations which ordinarily regulate the conduct of human affairs would do; or doing something which a prudent and reasonable man would not do.” In Alhassan Kotokoli v Moro Hausa (1967) GLR AT 298 Edusie J. quoting Lord Wright in Lonchelly Iron and Coal Co. Ltd. v M’Mullan (1934) A.C. 1 at 25 stated as follows: In a strict legal analysis, negligence means more than heedless or careless conduct, whether in omission or commission; it properly connotes the complex concept of duty, breach and damage thereby suffered by the person to whom the duty was owing. In my view, the Defendant Company took reasonable care to prevent the outbreak of fire and cannot be held liable for the fire outbreak, but will nevertheless be held liable for the spread of the fire from its premises to the premises of Jay Kay. I will now determine a separate question of liability for the spread of the fire which started from Defendant’s premises without its fault to the premises of Jay Kay. Was the Defendant negligent for the spread of the fire ? An owner has a duty to ensure that their premises do not pose a risk of fire to neighbouring properties. If a fire starts on their property and spreads to a neighbour’s property, the owner may be held liable if it can be proved that the fire was caused by their negligence or that of their agents or servants. It is also the case that where fire spreads negligently from one property to another the occupier of the property from which the fire spreads is invariably liable. This means that Page 16 of 24 the owner or occupier of property must prove that it took reasonable steps to prevent the spread of the fire to the neighbouring properties. In Allan William Goldman v Rupert William Edeson Hargrave & Ors [1966] A.C. 645, the Privy Council held in holding 1 of the headnote that : An occupier of land was under a general duty of care, in relation harzards, whether natural or man-made occurring on his land, to remove or reduce such hazardsto his neighbour; that the existence of such duty must be based on knowledge of the harzard, ability to forsee the consequences of not checking or removing it, and the ability to abate it; and the standard of care required of the occupier is founded on what it was reasonable to expect of him in the circumstances.” Lewison LJ Gore v Stannard (trading as Wyvern Tyres) (supra) in relying on the Privy Council case of Goldman v Hargrave ( supra) held that an occupier of a property he has a duty to do what is reasonable to prevent the spread of the fire. If he is negligent in preventing the spread of the fire, the statutory defence under section 86 of the Act of 1774 will fail. if he is not negligent, the defence will succeed. I will say that an occupier of a property has a duty to do what is reasonable to prevent the spread of fire. If he is negligent in not preventing the spread of the fire, he will be liable, and if he is not negligent, he will not be liable. In the present case, even though I have held that the Defendant is not liable for the initial ignition of the fire, was it negligent to prevent the spread of the fire to the property of Jay Kay, I think so. In the instant case, even though the plaintiff failed to prove that the fire which originated from the premises of the defendant was as a result of the negligence or intentional act of Page 17 of 24 the defendant, on the preponderance of the probabilities, I am satisfied that the defendant failed to take reasonable steps to prevent the spread of the fire and was negligent in allowing the spread of the fire to the property of its neighbour, jay kay. The defendant had fire extinguishers at the premises, but these were not available to the security men who noticed the start of the fire to use them because the premises were locked and the keys were with the country director of the defendant company. If the keys to the premises had been available to the security who, according to the defendant’s witnesses, were trained in the use of fire extinguishers and manage situation of fire could have been extinguished the fire before spreading to the defendant’s neighbour. Indeed, when the fire service personnel got to the premises, the main entrance to the premises was locked. Investigation conducted by the fire service crew that went to extinguish the fire revealed that the fire started long it was detected, considering the extent of the burnt and damage before the arrival of the Ghana National Fire Service. stated that the fire was detected. ISSUE 2: Whether the Defendant is liable to the Plaintiff’s subrogated claim. The doctrine of Subrogation In Royal & Sun Alliance PLC and Others v Textainer Group Holdings and Others [2024] Lloyd’s Rep IR 465 the English Court of Appeal described subrogation as “It was common ground that the doctrine of subrogation allows an insurer who has indemnified an insured to "take advantage of any means available to the insured to extinguish or diminish the loss for which the insurer has indemnified the insured": MacGillivray on Insurance Law 15th ed. 2022 para 22-001. By reason of that right, any recoveries received by the insured will inure to the benefit of the insurer with a view to diminishing the loss which the insurer has paid and indemnified: MacGillivray paras 22-005, 22-067.” Page 18 of 24 The right of subrogation only arises when there is a valid insurance contract for indemnification. After a claim is lodged with the insurer, it must compensate the insured for the loss covered under the contract if all conditions under the contract have been met. Thereafter, the insurer derives the rights and remedies the insured would otherwise have against the third party. By acquiring such rights and remedies, the insurer replaces the insured as a claimant and must be reimbursed by the third party. In the book Insurance Law: Cases and Materials by John Lowry & Philips Rawlings the authors define subrogation as the right of an insurer who has paid for a loss to pursue the wrongdoer in the name of the insured. The doctrine of subrogation is founded on the principle of indemnity. The insured is entitled to take over the remedies of the insured to recover from sums paid out by insurer for indemnity payment made to its insured as a result of the wrong-doers acts or omission. Subrogation means the substitution of one person for another so that the person subrogated succeeds to the rights of the person whose place it takes. It expresses the insurer’s right to be placed in the insured’s position so as to be entitled to the advantage of all the latter’s rights and remedies against the 3rd parties. In order for the insurer to recoup the money paid to the insured, it can use subrogation using the insured’s name. Alternatively, the insurer, may through cession of the insured’s right against the third party sue in its own name. Gordon; General Principles of Insurance Law p 260. Fouche: The Legal Principles of Contracts and negotiable instruments 5th ed p260, the insurer has paid the insured the full extent allowed by the policy, it may sue the wrongdoer to recover the money it has paid to the insured and that subrogation prevents the insured from receiving compensation from both the insurer and the wrongdoer An extract from Joubert The Law of South Africa (Lawsa) on insurance (para 373); Page 19 of 24 “In its literal sense the word subrogation means the substitution of one party for another as creditor. In the context of insurance, however, the word is used in a metaphorical sense. Subrogation as a doctrine of insurance of insurance Law embraces a set of rules providing for the reimbursement of an insurer which has indemnified its insured under a contract of indemnity insurance. The gist of the doctrine is the insurer’s personal right of recourse against its insured, in terms of which it is entitled to reimburse itself out of the proceeds of any claims that the insured may have against third parties in respect of the loss.” In Sherwood Export Holding v Pharmadex Ghana Limited [ 2001-2001] 2 GLR 241, the Court observed that subrogation rights may be subject to the express or implied agreement between the parties; where they are not, they are best regarded as arising by operation of law. Rights of subrogation arise in three different ways automatically as a matter of law, by agreement as part of a contract or by statute. See Castellion v Preston [1883] 11 QBD 380 CA and Morris v Ford Motor Co Ltd [ 1973] QB 792 In Colinvaux’s law of Insurance, ( 7th Ed) page 182, the author stated that the insurer is not directly or a party in proceedings against the third party , but must sue in the name of the assured. Explaining further that the action is at all times in the name of the assured, the author noted that where the assured is a company which had gone into liquidation and has been removed from the register of companies, it has ceased to exist and its name cannot be used in proceedings. Unlike assignment where the assured makes an expression assignment of his rights to the insurer, an insurer subrogated to the insured’s right brings the action in the name of the assured on the cause of action remaining in the name of the assured. On receiving a proper indemnity against costs, it is the duty of the insured to permit his name to be used in such claims. Page 20 of 24 In Halsbury’s Laws of England ( 4th ed) Vol 25 at page 281 it is provided that in the absence of a formal assignment of the right of action, the insurer cannot sue the third party in their own names; they must bring the action in the name of the assured.” Ghana Union Assurance Limited v Samva Limited [2016] DLHC 11834 Can an insurer pursue a subrogated claim in its own name where the insured refuses to cooperate? Martha Castaneda-Wilcox Practical Law Dispute Resolution March 13, 2017 4:16PM THE SHORT ANSWER IS THAT, GENERALLY, AN INSURER CAN ONLY PURSUE A SUBROGATED CLAIM IN THE NAME OF ITS INSURED. TYPICALLY, SUBROGATION MEANS THAT, ONCE AN INSURER HAS PAID OUT UNDER AN INSURANCE CONTRACT, IT CAN STEP INTO THE INSURED’S SHOES AND ACQUIRE RIGHTS TO: • PROCEED IN THE INSURED’S NAME AGAINST ANY THIRD PARTY RESPONSIBLE FOR CAUSING OR CONTRIBUTING TO THE LOSS; AND RECOVER UP TO THE AMOUNT IT HAS RECOVERED UNDER THE POLICY. • CLAIM FROM THE INSURED ANY SUMS THE INSURED HAS RECEIVED BY WAY OF COMPENSATION FROM A THIRD PARTY. THERE ARE HOWEVER THE FOLLOWING EXCEPTIONS TO THE GENERAL PRINCIPLE: • WHERE THE INSURED HAS ASSIGNED TO THE INSURER ITS CAUSE OF ACTION AGAINST THE THIRD PARTY; AND THE THIRD PARTY HAS RECEIVED NOTICE OF THIS. WHERE A CAUSE OF ACTION HAS BEEN ASSIGNED, AN INSURER IS ALLOWED TO PROCEED AGAINST THE THIRD PARTY IN ITS OWN NAME. Page 21 of 24 • Where statute confers a right of action directly upon insurers (for example the Riot (Damages) Act 1886, section 4). In the case of Gard Marine &Energy Limited v China National Chattering Company Limited [2017] UKSC 35, the parties had a clause on subrogation in the following terms “The Owners and/or insurers shall not have any right of recovery or subrogation against the Charterers on account of Page 40 loss of or any damage to the vessel or her machinery or appurtenances covered by such insurance, or on account of payments made to discharge claims against or liabilities of the Vessel or the Owners covered by such insurance.” The Court in determining the issue “ If there was a breach of the safe port undertaking, do the provisions for joint insurance in clause 12 of the Barecon 89 form preclude rights of subrogation of hull insurers and the right of owners to recover in respect of losses covered by hull insurers against the demise charterer for breach of an express safe port undertaking “ held that (Lords Mance, Hodge and Toulson agreeing, Lords Clarke and Sumption dissenting) finding that cl 12 of the Barecon 89 form precluded the rights of subrogation of hull insurers and the right of owners to recover in respect of losses covered by hull insurers against the demise charterer for breach of an express safe port undertaking. In the present case, Condition 5 of the policy, which was tendered by the plaintiff and admitted as exhibit As in the following terms: 4. SUBROGATION Any claimant under this Policy shall, at the expense of the Insurer do, and concur in doing and permit to be done all such acts and things as may be necessary or reasonably required by the Insurer for the purpose of enforcing any rights and Page 22 of 24 remedies, or of obtaining relief or indemnity from other parties to which the Insurer shall be or would become entitled or subrogated, upon its paying for or making good any loss or damage under this Policy, whether such acts and things shall be or become necessary or required before or after the Insured’s indemnification by the Insurer. In the instant case , the right of subrogation is conferred on the Plaintiff by the contract between the parties. It is not in doubt that the Plaintiff has paid an amount Ghs1,948,668.79 to its insured Jay Kay Industries Limited for the loss sustained by the insured as a result of the fire outbreak. In terms of condition 5 of the General Conditions of Exhibit A, The Plaintiff would be entitled to the remedies of the Jay Kay to recover the sums paid out by the Plaintiff for indemnity payment made to Jay Kay as a result of the fire outbreak. However, it will be successful in its claim only when the fire outbreak was as a result of the Defendant’s acts or omissions. The Plaintiff has to prove that the fire outbreak was caused by the Defendant failing which its claim will fail. I FIND THAT THE DEFENDANT IS LIABLE TO THE CLAIM OF THE PLAINTIFF AND ENTER JUDGMENT FOR 1. Recovery of the sum of one million, nine hundred and forty thousand, six hundred and sixty-eight Ghana cedis, seventy-nine pesewas (GHC1,948,668,79) being amount paid to Jay kay industries and Investment as claim for the value of stock destroyed in fire outbreak. 2. Interest on relief (1) at the prevailing commercial bank rate from 25th November, 2022 till the date of final payment. 3. Costs of Ghs15,000.00 in favour of the Plaintiff and against the defendant. Page 23 of 24 AYITEY ARMAH-TETTEH J. JUSTICE OF THE HIGH COURT Page 24 of 24