Dominion Stores Ltd. v. United Trust Co., Geller and Granatstein

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Supreme Court (Canada)
• Judge: Laskin, C.J.C., Judson, Ritchie, Spence and Beetz, JJ.
• Citation: (1976), 11 N.R. 97 (SCC),[1976] SCJ No 99 (QL),1976 CanLII 33 (SCC),71 DLR (3d) 72,[1977] 2 SCR 915,11 NR 97,1 RPR 1
• Date: 05 October 1976

Dominion Stores Ltd. v. United Trust (1976), 11 N.R. 97 (SCC)

MLB headnote and full text

Dominion Stores Ltd. v. United Trust Company, Geller and Granatstein

Indexed As: Dominion Stores Ltd. v. United Trust Co., Geller and Granatstein

Supreme Court of Canada

Laskin, C.J.C., Judson, Ritchie, Spence and Beetz, JJ.

October 5, 1976.

Summary:

This case arose out of negotiations between a landlord and a tenant for an option in favour of the tenant to renew its lease for a term of ten years. The landlord and the tenant concluded, by an exchange of letters, an enforceable agreement. During the negotiations the defendant concluded an agreement to purchase the landlord's commercial building. The defendant had knowledge of the tenant's right to renew its lease for a term of ten years. The defendant concluded its purchase of the building before the tenant registered its option to renew the lease. The land was subject to the Ontario Land Titles Act and the defendant alleged that its title to the land and building was not subject to the unregistered option even though the defendant had notice of the unregistered option. The tenant commenced an action for a declaration that it was entitled to renew its lease for a term of ten years. The tenant also applied for an injunction to restrain the defendant from interfering with the tenant's possession of the premises. The trial court granted the tenant's application and declared that the tenant was entitled to exercise its option to renew the lease for a term of ten years. In addition, the trial court restrained the defendant from interfering with the tenant's possession of the premises.

On appeal to the Ontario Court of Appeal the appeal was dismissed and the judgment of the trial court was affirmed.

On appeal to the Supreme Court of Canada the appeal was dismissed and the judgment of the Ontario Court of Appeal was affirmed. The Supreme Court of Canada held that the Ontario Land Titles Act did not abolish the common law doctrine of actual notice.

Laskin, C.J.C., dissenting, in the Supreme Court of Canada, would have allowed the appeal and would have set aside the judgment of the Ontario Court of Appeal. Laskin, C.J.C., stated that the scheme and purpose of the Land Titles Act makes it clear that notice of an unregistered interest cannot qualify the registered title of a transferee for value from the registered owner.

Real Property - Topic 8006

Title - Registration of instruments - Land titles system - Effect of actual notice, of an unregistered encumbrance, to a purchaser of a building - A purchaser of a commercial building had notice of a tenant's unregistered option to renew its lease for a term of ten years - The purchaser alleged that its title under the Land Titles Act was not subject to the tenant's unregistered option even though the purchaser had notice of the option before it purchased the building - The Supreme Court of Canada interpreted the Ontario Land Titles Act and affirmed a declaration that the tenant was entitled to exercise its option to renew its lease - The Supreme Court of Canada held that the Ontario Land Titles Act did not abolish the common law doctrine of actual notice.

Statutes - Topic 1570

Interpretation - Implied meaning where the meaning is not plain - Express language necessary to alter a clear principle of law - The Supreme Court of Canada considered whether s. 85(5) of the Ontario Land Titles Act abolished the common law doctrine of actual notice - The Supreme Court of Canada stated that the alteration of such a common law doctrine must be made by clear and appropriate words - See paragraph 46.

Statutes - Topic 1626

Interpretation - Extrinsic aids - Other statutes - Reference to similar statutes in other jurisdictions - The Ontario Land Titles Act contained no express provision respecting notice of unregistered encumbrances - The Supreme Court of Canada referred to similar legislation in other jurisdictions which contained express provisions respecting notice of unregistered encumbrances - The Supreme Court of Canada stated that the Ontario Land Titles Act was subject to the common law doctrine of actual notice - See paragraphs 32 to 35.

Contracts - Topic 1503

Formation of contract - Consensus - What constitutes a consensus necessary for a binding contract - A landlord and a tenant negotiated, by an exchange of letters, an option to renew a lease of store premises - The tenant's letters referred to the preparation of the necessary documents for approval and execution by the landlord - The landlord refused to sign the formal documents - The Supreme Court of Canada held that the letters constituted an agreement which the tenant could enforce to extend the term of the lease - See paragraphs 5 to 15.

Cases Noticed:

Waimiha Sawmilling Company Limited v. Waione Timber Company Limited, [1926] A.C. 101, folld. [paras. 34, 66].

Assets Co. v. Mere Roihi and others, [1905] A.C. 176, folld. [paras. 34, 66].

Re Skill and Thompson (1908), 17 O.L.R. 186, folld. [para. 36]; refd to. [para. 74].

John Macdonald & Co. Limited v. Tew (1914), 32 O.L.R. 262, folld. [para. 37]; refd to. [para. 74].

Re Jung and Montgomery, [1955] 5 D.L.R. 287, folld. [para. 39]; refd to. [para. 70].

Pitcher v. Shoebottom, [1971] 1 O.R. 106, folld. [para. 41].

Zbryski v. City of Calgary (1965), 51 D.L.R.(2d) 54, refd to. [para. 49].

Friedman v. Barrett, [1962] Qd.R. 498, folld. [para. 66].

Re Lord and Ellis (1914), 30 O.L.R. 582, refd to. [para. 85].

Statutes Noticed:

Land Titles Act, R.S.O. 1970, c. 234, sect. 52 [para. 62]; sect. 75, sect. 78, sect. 79, sect. 85, sect. 91, sect. 115 [para. 27].

Authors and Works Noticed:

Ruoff, An Englishman Looks at the Torrens System (1957), page 8 [para. 61].

MeGarry and Wade, The Law of Real Property, 4th ed., 1975, page 1066 [para. 65].

Di Castri, Law of Vendor and Purchaser, 2nd ed., 1976, page 427 [para. 72].

Magee on Land Titles (1940), pages 43, 93, 104 [para. 74]; 110 [para. 77].

Ontario Law Reform Commission's Report on Land Registration, 1971, page 14 [para. 79].

Magee, Notice under the Ontario Land Titles Act (1933), 11 Can. Bar Review 245 [para. 85].

Counsel:

D.T. Stockwook and J. Ryan, for the appellant;

P.S.A. Lamek and D.J.T. Mungovan, for the respondents.

This appeal was heard by the Supreme Court of Canada at Ottawa, Ontario on March 31, 1976 and April 1, 1976.

The judgment of the Supreme Court of Canada was delivered on October 5, 1976 and the following opinions were filed:

SPENCE, J. - see paragraphs 1 to 51.

LASKIN, C.J.C. - dissenting, see paragraphs 52 to 86.

JUDSON, RITCHIE AND BEETZ, JJ., concurred with SPENCE, J.