Politzer v. Metropolitan Homes Ltd.

Politzer v. Metropolitan Homes Ltd.

The instrument was an option, not a binding sale, because clause 3 removed mutuality of obligation; the option created a contingent equitable interest that could vest beyond the perpetuity period and thus offended the rule against perpetuities; consequently there was no enforceable interest in land or personal covenant that could attract specific performance; appeal allowed and trial judgment restored.

Citation
[1976] 1 SCR 363
Parties
Appellant (defendant): Edward James Politzer; Respondent (plaintiff): Metropolitan Homes Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
13 February 1975
Procedural Posture
Civil Appeal Property/real Estate / On Appeal to the Supreme Court of Canada From the Court of Appeal for Manitoba; Trial Judgment by Solomon J. Restored
Outcome
Appeal allowed; judgment of the Court of Appeal for Manitoba set aside; judgment of Solomon J. in the Court of Queen's Bench restored; costs awarded to the appellant.
Legal Topics
Option to Purchase, Specific Performance, Rule Against Perpetuities, Mutuality of Obligation, Equitable Interests
Source Language
English
Property Law Real Property Equity Contract Law Option to Purchase Specific Performance Rule Against Perpetuities Mutuality of Obligation +1 more

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Parties

Edward James Politzer

Appellant (defendant)

Metropolitan Homes Ltd.

Respondent (plaintiff)

Procedural Posture

Civil Appeal Property/real Estate / On Appeal to the Supreme Court of Canada From the Court of Appeal for Manitoba; Trial Judgment by Solomon J. Restored

Legal Issues

  1. 1 Whether the instrument was an option or an agreement of purchase and sale
  2. 2 Whether clause 3 created an illusory obligation and removed mutuality of obligation
  3. 3 Whether an option that may vest beyond the perpetuity period offends the rule against perpetuities

Ratio Decidendi

The instrument was an option, not a binding sale, because clause 3 removed mutuality of obligation; the option created a contingent equitable interest that could vest beyond the perpetuity period and thus offended the rule against perpetuities; consequently there was no enforceable interest in land or personal covenant that could attract specific performance; appeal allowed and trial judgment restored.

Court Disposition

Appeal allowed; judgment of the Court of Appeal for Manitoba set aside; judgment of Solomon J. in the Court of Queen's Bench restored; costs awarded to the appellant.

Orders

  • Appeal allowed
  • Judgment of the Court of Appeal for Manitoba set aside