Metropolitan Homes Ltd. v. Politzer

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Supreme Court (Canada)
• Judge: Dickson and de Grandpré, JJ.
• Citation: (1975), 3 N.R. 621 (SCC),3 NR 621,53 DLR (3d) 410,1975 CanLII 208 (SCC),[1976] 1 SCR 363,1975 CanLII 206 (SCC),[1975] 5 WWR 547,54 DLR (3d) 376,[1976] 1 SCR 353,[1975] 5 WWR 492
• Date: 13 February 1975
• Subject Matter: PERPETUITIES

Metropolitan Homes Ltd. v. Politzer (1975), 3 N.R. 621 (SCC)

MLB headnote and full text

Metropolitan Homes Ltd. v. Politzer

Indexed As: Metropolitan Homes Ltd. v. Politzer

Supreme Court of Canada

Laskin, C.J.C., Martland, Pigeon,

Dickson and de Grandpré, JJ.

February 13, 1975.

Summary:

This case arose out of an option to purchase real estate which was granted by the defendant to the plaintiff. The option was accepted by the plaintiff within the time specified in the option. By the terms of the option the purchase price was not payable in full until a development agreement was reached between the plaintiff and the City of St. Vital. Accordingly, the plaintiff's obligation to pay the purchase price was contingent only and uncertain as to time. Six years after the date of the option the purchaser tendered the purchase price which was rejected by the defendant. The plaintiff commenced an action for specific performance which was dismissed by the trial court - see [1973] 3 W.W.R. 468. The trial court held that the option agreement was void because it infringed against the rule against perpetuities.

On appeal to the Manitoba Court of Appeal the appeal was allowed and the judgment of the trial court was set aside - see 39 D.L.R.(3d) 438. The Manitoba Court of Appeal held that the agreement was "a binding agreement of purchase and sale" and that the rule against perpetuities had no application - see paragraph 4.

On appeal to the Supreme Court of Canada the appeal was allowed and the judgment of the Manitoba Court of Appeal was set aside. The Supreme Court of Canada stated that the agreement was not a valid contract of the purchase and sale but was an option to purchase land where the obligation of the purchaser to pay the purchase price was contingent only and uncertain as to time. The Supreme Court of Canada stated that an option to purchase land gives rise to an equitable interest in land - see paragraph 5.

The Supreme Court of Canada held that because the vesting of the equitable interest in the purchaser was uncertain the option agreement was void because it infringed the rule against perpetuities.

Perpetuities - Topic 1800

Rule against perpetuities - Interests to which the rule does not apply - Personal contracts - Option to purchase land - The Supreme Court of Canada stated that a contract cannot be regarded as "merely personal" and at the same time as creating an interest in land - See paragraph 7.

Perpetuities - Topic 914

Rule against perpetuities - Interests subject to the rule - Land - Equitable interests - Options to purchase land - An optionee exercised its option to purchase land but the optionee's obligation to pay the purchase price was contingent only and uncertain as to time - The Supreme Court of Canada declared the option void because it infringed the rule against perpetuities.

Cases Noticed:

Frobisher Limited v. Canadian Pipelines & Petroleums Ltd. et al., [1960] S.C.R. 126, folld. [para. 5].

Canadian Long Island Petroleums and Sadim Oil & Gas Ltd. v. Irving Industries (Irving Wire Products Division) Ltd. et al. (1974), 3 N.R. 430, folld. [para. 5].

South Eastern Railway Co. v. Associated Portland Cement Manufacturers Ltd., [1910] 1 Ch. 12, not folld. [para. 6].

Hutton v. Watling, [1948] Ch. 26, not folld. [para. 6].

Kennedy v. Beaucage Mines Ltd., [1959] O.R. 625, not folld. [para. 6].

Prudential Trust Co. v. Forseth, [1960] S.C.R. 210, not folld. [para. 6].

Harris v. Minister of National Revenue, [1966] S.C.R. 489, folld. [para. 7].

London and South Western Railway Co. v. Gomm (1882), 20 Ch.D. 562, folld. [para. 7].

Counsel:

I.I. Cutler, for the appellant;

Y.M. Henteleff and M. Calof, for the respondent.

This appeal was heard by the Supreme Court of Canada on June 14 and 18, 1974. Judgment was delivered by the Supreme Court of Canada on February 13, 1975 and the following opinions were filed:

Dickson, J. - see paragraphs 1 to 8.

Laskin, C.J.C. - see paragraphs 9 to 13.

PIGEON and de GRANDPRE, JJ., concurred with DICKSON, J.

MARTLAND, J., concurred with LASKIN, C.J.C.