Galbraith v. Madawaska Club Ltd.

Galbraith v. Madawaska Club Ltd.

The Court allowed the appeal and restored the trial judgment with modifications: by‑laws restricting transfers are governed by the company charter so no broad declaration of invalidity should be made beyond the charter’s scope; deed/by‑law covenants bind the land only to the extent they meet equitable requirements — here the covenant in by‑law 19 did not touch and concern any retained dominant land, the club retained no identifiable benefitted land and there was no express annexation, therefore by‑law 19 does not bind the plaintiff though by‑laws 18(a), 18(b) and 28 do.

Citation
[1961] SCR 639
Parties
Plaintiff/appellant: John S. Galbraith; Defendant/respondent: The Madawaska Club Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
26 June 1961
Procedural Posture
Civil Appeal (property and Corporate) / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario; Trial Judgment Under Review
Outcome
Appeal allowed; judgment at trial restored with modifications.
Legal Topics
Restrictive Covenants, Transfer of Shares, Annexation of Covenant Benefits, Notice, Validity of Company By‑laws
Source Language
English
Commercial Law Property Law Corporate Law Equity Restrictive Covenants Transfer of Shares Annexation of Covenant Benefits Notice +1 more

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Parties

John S. Galbraith

Plaintiff/appellant

The Madawaska Club Limited

Defendant/respondent

Procedural Posture

Civil Appeal (property and Corporate) / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario; Trial Judgment Under Review

Legal Issues

  1. 1 Whether by‑laws restricting transfer of shares were valid notwithstanding the company charter and later statutory provisions
  2. 2 Whether restrictive covenants in the deed and by‑laws (notably by‑law 19) ran with the land and bound a purchaser who took with notice
  3. 3 Whether the covenants satisfied requirements for enforceability in equity: touching and concerning the dominant land, benefit retained by covenantee land, and express annexation

Ratio Decidendi

The Court allowed the appeal and restored the trial judgment with modifications: by‑laws restricting transfers are governed by the company charter so no broad declaration of invalidity should be made beyond the charter’s scope; deed/by‑law covenants bind the land only to the extent they meet equitable requirements — here the covenant in by‑law 19 did not touch and concern any retained dominant land, the club retained no identifiable benefitted land and there was no express annexation, therefore by‑law 19 does not bind the plaintiff though by‑laws 18(a), 18(b) and 28 do.

Court Disposition

Appeal allowed; judgment at trial restored with modifications.

Orders

  • Set aside the judgment of the Court of Appeal for Ontario.
  • Restore trial judgment except strike out the declaration that the plaintiff’s lands are bound by by‑law 19 and strike out the paragraph declaring by‑laws 2,5,6,9 and 30 invalid.