ii the right to recover from the insured any benefit received by the insured in termination or extinction of the loss against which the insured has been indemnified.
32 Like assistance is available from a decision of the Appellate Division of the Ontario Supreme Court, recently the subject of an observation, again in the Supreme Court of Western Australia. In Zurich Australian Insurance Ltd v Metals and Minerals Insurance Pty Ltd, Supreme Court of Western Australia [2007] WASC 62, Johnson J said at [402]:
[402] In reaching its decision, the Appellate Division of the Ontario Supreme Court considered the doctrine of subrogation and its application in the circumstances before them. Hodgins JA (with whom Middleton JA and Grant JA agreed) quoted from the decision in National Fire Insurance Co v McLaren (1886) 12 OR 682, where Boyd C provided the following view on subrogation (at 687):
The doctrine of subrogation is a creature of equity not founded on contract, but arising out of the relations of the parties. In cases of insurance where a third party is liable to make good the loss, the right of subrogation depends upon and is regulated by the broad underlying principle of securing full indemnity to the insured, on the one hand, and on the other of holding him accountable as trustee for any advantage he may obtain over and above compensation for his loss.
33 The problem for the Court in the present case simply arises because, as is common ground, at the point in time when the insurance contract came into existence, in the very nature of things there could not have been a contract of insurance to which the insurer and the Owners Corporation were parties.
34 However and as the plaintiff has contended, the design and purpose of the Insurance provisions of the HBA was to require and create a legal relationship between the insurer issuing the section 96 policy and the Owners Corporation and the ultimate lot owners and their successors in title. To my mind this "intent and purpose" is enshrined in both the Act and the Regulations [see sections 18C and 18D, the definition of beneficiary in regulation clause 39(1) and the provisions of regulation clause 42 under the heading of "beneficiaries".
35 It seems plain that Vero's common law rights of subrogation, are underlined and enshrined in clauses 19 and 30 of the Policy, referred to above.
36 Additionally, and again as the plaintiff has submitted, the effect of the Deed, and in particular clauses 5.1(a), 5.1(c) and 8.2, not only reaffirms the common law right of subrogation, and the rights accorded to Vero under clauses 19 and 30 of the Policy, but in so far as it is necessary for Vero to advance its rights in the matter, these clauses authorise Vero to maintain and proceed with the action in the name of the Owners Corporation [or for that matter of fact in its own name].
Dealing seriatim with certain of the defendant's submissions
37 The defendant's answer to separate question 1.1 was that the question should be answered in the negative. The defendant's contention was that this was because the plaintiff had recovered from the insurer for the costs of rectification of the defective work of the builder. The proposition was that for that reason, the insurer did not stand in the shoes of the plaintiff which had been fully compensated, any accessorial right through the medium of the HBA against the developer having been extinguished.
38 This analysis is rejected. On the correct analysis the insurer, on payment to the Owners Corporation, became subrogated to all of its rights, including the statutory right under sections 3A and 18C of the HBA against the defendant in relation to the claim [cf Ellerbeck Collieries Ltd v Cornhill Insurance Co Ltd [1932] 1 KB 401 at 411].