York v. Krause

York v. Krause

The Court held that the forfeiture clause must be applied according to the contract wording and, in context, 'payments heretofore made' referred only to the $200 deposit plus $2,500 paid on execution (total $2,700). The vendor was entitled to rescind and forfeit $2,700; the purchaser was entitled to recover all other payments made with interest at 5% per annum from the date of the vendor's resale to third parties; the purchaser must be held to the written terms absent sufficient reason for equitable relief.

Citation
[1930] SCR 376
Parties
Vendor/plaintiff/respondent: York; Purchaser/defendant/appellant: Krause
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
12 March 1930
Procedural Posture
Civil Appeal (sale of Land) / Appeal to Supreme Court of Canada From Appellate Division of Ontario
Outcome
Appeal allowed in part; judgment of trial judge (McEvoy J.) restored in respect of forfeiture and recovery framework.
Legal Topics
Forfeiture Clause, Contract Construction, Relief Against Forfeiture, Liquidated Damages, Vendor Recoupment
Source Language
English
Property Law Contract Law Equity Forfeiture Clause Contract Construction Relief Against Forfeiture Liquidated Damages Vendor Recoupment

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 7
Sign in to unlock

Parties

York

Vendor/plaintiff/respondent

Krause

Purchaser/defendant/appellant

Procedural Posture

Civil Appeal (sale of Land) / Appeal to Supreme Court of Canada From Appellate Division of Ontario

Legal Issues

  1. 1 Whether purchaser was in default under the written agreement
  2. 2 Proper construction of payment and forfeiture clauses (phrase 'payments heretofore made')
  3. 3 Whether vendor could forfeit sums paid and the extent of purchaser's right to recover amounts paid in excess of forfeited sum

Ratio Decidendi

The Court held that the forfeiture clause must be applied according to the contract wording and, in context, 'payments heretofore made' referred only to the $200 deposit plus $2,500 paid on execution (total $2,700). The vendor was entitled to rescind and forfeit $2,700; the purchaser was entitled to recover all other payments made with interest at 5% per annum from the date of the vendor's resale to third parties; the purchaser must be held to the written terms absent sufficient reason for equitable relief.

Court Disposition

Appeal allowed in part; judgment of trial judge (McEvoy J.) restored in respect of forfeiture and recovery framework.

Orders

  • Declaration that the agreement became null and void for default and vendor entitled to possession of the land.
  • Vendor entitled to forfeit $2,700 (the $200 deposit plus $2,500 paid on execution) as liquidated damages.