1785192 Ontario Inc. (Tenant) leased two properties with an option to purchase. The purchase price was to be the average of appraisals from each party.
Appraisals varied significantly: $11,746,000 (Tenant) vs. $31,200,000 (Landlord), resulting in a midpoint of $21,473,000.
The Tenant attempted to close by tendering only $11,746,000 and holding the difference in trust. Ontario H Limited Partnership (Landlord) refused to convey the properties under these terms.
Lower Court:
Ordered specific performance for the Tenant at the midpoint price, $21,473,000.
Court of Appeal:
Reversed: Held that the Tenant failed to exercise the option correctly by not tendering the full midpoint amount.
The court ruled partial payment with the balance held in trust did not fulfill the purchase obligation.
Strict adherence to option terms was required; the Landlord was not obliged to accept partial payment.
Relief from forfeiture was denied as the Tenant, a sophisticated party, assumed the risk of its approach.
Outcome:
The appeal was allowed, options were declared null, and the Landlord was awarded costs totaling $243,000.
