Ontario Asphalt Block Co. v. Montreuil

Ontario Asphalt Block Co. v. Montreuil

The majority applied the rule in Bain v. Fothergill and held that where the lessor, without fraud, is unable to convey the fee simple the lessee is not entitled to damages for loss of his bargain; relief was limited to an abatement in the purchase money reflecting the value of the interest the lessor could convey and no further damages for expenditures were awarded.

Citation
(1916) 52 SCR 541
Parties
Appellant / Plaintiff: Ontario Asphalt Block Company; Respondent / Defendant: Luke Montreuil
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 February 1916
Procedural Posture
Appeal to Supreme Court of Canada From Appellate Division Re Specific Performance of Agreement for Sale of Land / Final Appeal; Judgment on 21 February 1916
Outcome
Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Ontario affirmed
Legal Topics
Specific Performance, Option to Purchase, Damages for Breach, Inability to Give Title, Leasehold and Life Estate
Source Language
English
Property Law Contract Law Equity Remedies Specific Performance Option to Purchase Damages for Breach Inability to Give Title +1 more

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Parties

Ontario Asphalt Block Company

Appellant / Plaintiff

Luke Montreuil

Respondent / Defendant

Procedural Posture

Appeal to Supreme Court of Canada From Appellate Division Re Specific Performance of Agreement for Sale of Land / Final Appeal; Judgment on 21 February 1916

Legal Issues

  1. 1 Whether a lessee is entitled to damages for loss of bargain when lessor, without fraud, is unable to convey fee simple title
  2. 2 Whether the rule in Bain v. Fothergill bars recovery of substantial damages for expenditures made in reliance on an option to purchase
  3. 3 Whether the lessor had a duty to take steps to procure a good title from remaindermen

Ratio Decidendi

The majority applied the rule in Bain v. Fothergill and held that where the lessor, without fraud, is unable to convey the fee simple the lessee is not entitled to damages for loss of his bargain; relief was limited to an abatement in the purchase money reflecting the value of the interest the lessor could convey and no further damages for expenditures were awarded.

Court Disposition

Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Ontario affirmed

Orders

  • Appeal dismissed with costs to respondent
  • Plaintiff entitled only to abatement in purchase money based on the value of the interest the lessor could convey (proportionate part attributable to the land in which lessor had only a life estate)