There may be a discrepancy between the size of the land that the purchaser anticipates he or she will acquire under an agreement of purchase and sale and the actual size of the land that the vendor is able to convey. How the law resolves complaints by the purchaser about the size of the land is intricate, and the application of the law may be correspondingly unpredictable.[FN1]
The first intricacy is that a purchaser's anticipation about the size of the property that he or she will acquire under an agreement of purchase and sale of land is determined not only by the description in the agreement, but also by the size of the property as may be perceived by the purchaser after having inspected it. To illustrate, in LeMesurier v. Andrus,[FN2] the vendors promised to convey a property " . . . having a frontage of 50 feet more or less, a depth of 150 feet more or less, and described as 9 Dinnick Crescent, being a three-storey detached dwelling with private drive to the West of the property". The vendors were able to convey a property that conformed precisely to this description. However, a survey revealed that the fence that ran along the west boundary of the property enclosed a small portion of land that did not belong to the vendors. Although the Ontario Court of Appeal concluded that the purchaser was not justified in refusing to close the purchase because the discrepancy was immaterial, the court held that the purchaser was entitled, at least, to object to the discrepancy based on the apparent or perceived size of the property being purchased.
Similarly, in the trial judgment of LeMesurier v. Andrus,[FN3] White, J. concluded that the appearance of the property before the signing of the agreement throws light on the meaning of the words used by the parties to describe the property intended to be the subject of their agreement. In reaching this conclusion, White, J. relied on the provision typically found in standard form agreements of purchase and sale that "the purchaser acknowledges having inspected the property prior to submitting this offer and understands that upon vendor accepting this Offer there shall be a binding agreement of purchase and sale between Purchaser and Vendor." White, J. stated that this provision indicates that the parties had agreed that the appearance of the property, as reasonably viewed by the purchaser before signing the agreement of purchase and sale, may be taken into account by the court as part of the factual context in which the agreement was signed. In other words, the appearance of the subject property is a factor relevant to interpreting the agreement.
Conversely, the appearance of the property may, however, deny the purchaser ground for complaint. To illustrate, in Kuhirtt v. Lamb,[FN4] the actual depth of the property was 20 feet less than the 120 feet stated in the agreement, but the property's boundaries were clearly marked by hedges, which the purchasers could see upon inspection of the property. Despite the discrepancy between what the agreement said and what the vendors actually owned, the purchasers could not complain that they were not acquiring what they anticipated. That the appearance or the nature of what is being purchased is relevant to determining whether the purchaser has ground for complaint about any discrepancy in size is also demonstrated by the cases discussed below which differentiate between block sales of land and sales where the price is determined by the measured quantity of land.[FN5]
As already noted above, in LeMesurier v. Andrus, the deficiency in the size of the property was insufficient to justify the purchaser's refusal to close. The vendor was awarded damages for the loss in reselling the property. The law about when a purchaser can refuse to close because of deficiencies -- be they deficiencies in the quantity or in the quality of the title of the property -- is determined by the vendor's obligation to convey "good title" as qualified by the agreement of purchase and sale and by the materiality of any deficiency. [FN6] Good title is defined as a "marketable title" in fee simple. A "marketable title" is defined by case law[FN7] as a title that can, at all times and under all circumstances, be forced upon an unwilling purchaser who is not compelled to take a title with defects, clouds, or the reasonable threat of litigation to mar peaceful possession. Clouds are apparently valid claims or instruments that cast doubt on the vendor's title or on his or her ability to convey it.[FN8] To effect the marketability of title, a threat of litigation must be based on substantial and not idle grounds.[FN9] If a purchaser closes the transaction and subsequently discovers that the amount of land has been misrepresented, then the purchaser has no ground for rescission or for compensation unless there is a warranty or price adjustment provision in the agreement that survives the closing or unless the representation about the size of the property was fraudulent or amounts to an error in substantialibus. [FN10]
In LeMesurier v. Andrus, the court reduced the vendors' award of damages to account for the fact that they could not convey an insignificant amount of land that the purchaser anticipated would be part of the transaction. In effect, the court abated the damages award, a common law remedy, in a fashion similar to how a court may abate the purchase price when making a decree of the equitable remedy of specific performance. The analytical approach of the court in LeMesurier v. Andrus was a very significant innovation. It means that the Court of Appeal's decision in the older case of Bouskill v. Campea[FN11] has been overtaken by a new method of resolving disputes about the size of the land that is the subject of an agreement of purchase and sale.
In Bouskill, on the day fixed for closing, the purchaser discovered that the subject property was 160 feet, 11 3/4 inches in depth and not the "172 feet more or less" described in the agreement of purchase and sale. The purchaser refused to close, and the vendor sued for damages. The Court of Appeal dismissed the vendor's action. In doing so, the court stated that the vendor's claim had to be analyzed solely as a common law claim, in which case the issue was whether or not the size of the discrepancy fell within the scope of the words "more or less". Wilson, J.A. stated that "the vendor, in order to succeed on this appeal, must persuade the court that she was in a position on the closing date to convey what she contracted to convey, not as in a case of specific performance with an abatement, that she was able to convey substantially what she contracted to convey".[FN12] Agreeing with the trial judge in Bouskill, Wilson, J.A. concluded that as a common law matter, the discrepancy was too substantial to be covered by the words "more or less", and thus, the vendor could not perform his common law contractual obligations. In contrast, LeMesurier v. Andrus indicates that the equitable idea of substantial performance can be applied to a common law claim and, in this sense, there has been a fusion of law and equity. This significant change, however, should not be overstated because, as will be seen in the discussion below of the test to determine whether the vendor is able to convey "good title" and in the discussion below of the words "more or less", materiality is an operative factor in the common law's measure of what is a "good title". Despite the distinction drawn between law and equity in Bouskill, the common law and equity position may not have been that different if substantial performance approaches performance without a material deficiency.
The test of materiality that measures whether there is a genuine title defect was considered in Stefanovska v. Kok,[FN13] where the purchasers refused to close their purchase of a large residential property because the vendor's title was encumbered by an easement to permit the municipality to maintain a storm and sanitary sewer. The sewers were located outside but alongside the entire west boundary of the property, and the easement occupied about 3.5 per cent of the property. Moldaver, J. concluded that the presence of the easement was an insufficient reason for the purchasers' refusal to close. First, the purchasers could not object to the easement because it fell within an express qualification to the vendor's obligation to provide a good title. Second, the easement was insubstantial, that is, it was insufficient to justify not completing the transaction. Moldaver, J.'s test for measuring the sufficiency of a title objection was based on the objective materiality of the title defect, although the test allowed for the subjective concerns of the purchaser to be considered in particular or special cases.
As a measure for whether the purchaser has ground for refusing to close his or her purchase, materiality suffers from the difficulty that it is contextual and this limits the value of any case as a precedent to decide other cases. The defect was not material in Stefanovska v. Kok and in LeMesurier v. Andrus, [FN14] supra. In Posthumas v. Garner,[FN15] the test from Stefanovska v. Kok was applied and a 15% deficiency in the size of the property caused by its irregular shape was ruled insufficient to ground a refusal to close. In Homestar Industrial Properties Ltd. v. Philps,[FN16] although the purchaser succeeded in obtaining a return of its deposit on other grounds, the court held that a one-acre deficiency in a property purporting to be approximately 14.7 acres was not a material defect that would justify the purchaser refusing to close the transaction. However, the absolute or proportional size of a deficiency that is material in one case does not establish a precedent that a similar discrepancy in another case will be ruled material. In Bowes v. Vaux,[FN17] the vendor was unable to make title to 160 feet of lawn space (slightly in excess of 1% of the total area sold) and this was held to be material in the circumstances. In 663865 Ontario Ltd. v. Docherty,[FN18] the defect was a 16-foot reduction in the anticipated 88- foot depth of the property, and the purchaser was entitled to rescind.
The contextual nature of materiality also means that determining whether a defect in size is material will depend upon the particular circumstances of each case, including the purchaser's purposes and plans for the property. [FN19] That the purchaser's plans are a relevant consideration in determining materiality is understandable when the purchaser announces those plans during the negotiation of the agreement. Less understandable, however, is the fact that courts will consider the purchaser's undisclosed plans as a factor in determining materiality.[FN20] In Olszewski v. Trapman, [FN21] the purchaser was told by the agent for both parties that the property was a 2.0 acre lot. The agreement described the property as being approximately 1.5 acres. The truth was that the property was only 1.15 acres, which, because of zoning standards, was not great enough for the purchaser to realize his aspirations to build a very large house. Sheppard, J. concluded that the inaccurate statement about the acreage was a substantial overstatement that, having regard to the purchaser's intention for the property, entitled him to rescind the contract.
In addition to what the agreement says, what the purchaser sees upon inspection, the contextual nature of materiality and substantial performance, and what the purchaser intends for the property, the merits of a purchaser's complaint about the size of the property that he or she will acquire is sometimes determined by whether the property is priced as an entire or block parcel or whether its price is based upon its precise measurements. Wilson Lumber Co. v. Simpson[FN22] is a leading case about how size discrepancies are resolved in the circumstance of a block sale. The vendor thought that his property had a street frontage of 110 feet, more or less, because that was how the property had been described in assessment notices. The actual frontage was 98 feet six inches. The purchaser did not communicate that his building plans for the property required a property of 110 feet and, significantly, the price of the property was a block sum and not expressed to be related to the dimensions of the property. When the true dimensions of the property were ascertained, the purchasers demanded an abatement of the price and, when this was refused, they sued for specific performance with an abatement. The court held that the purchasers could take what the vendor had to sell without any abatement, otherwise their action for specific performance should be dismissed.
Meredith, C.J., the trial judge, held that when land is surveyed and given a lot number and also described by the dimensions qualified by the words "more or less", then the statement about the quantity of land does not amount to a representation for which the purchaser would be entitled to compensation if there was a deficiency. Meredith, C.J. made it clear that he was not including a case where the sale price is negotiated on the basis of the defined dimensions and the vendor knows that the property does not have those dimensions. In the
Thus, Wilson Lumber Co. v. Simpson is authority that a misstatement about the size or dimensions of a property is not actionable when the property is sold in block or by its apparent size, unless the discrepancy is so large as to give rise to a presumption of fraud or gross mistake.[FN23] Similarly, in Nashville Contractors Ltd. v. Middleton,[FN24] the land was described in the contract as comprising 2.5 acres, more or less, but it had an actual area of approximately 1.8 acres. Saunders, J. found, however, that the acreage was not a factor in the price or in the purchaser's plans for the property. Concluding that the purchaser had obtained what he had bargained for, Saunders, J. held that the purchaser did not have ground to refuse to close the transaction or to claim an abatement. Other authorities establish that if the discrepancy in size does not suggest fraud or gross mistake, then the governing part of the description will be the identification of the property and the false statement about dimensions will be disregarded pursuant to the interpretative principle known as falsa demonstratio non nocet.[FN25] In application, this principle means that if there is a sufficient description to ascertain what is intended to be conveyed, an erroneous addition to the description may be rejected. For example, in John Beattie Farms Ltd. v. Stevenson Estate,[FN26] the sale price was at a fixed price and it was not based on acreage. In this case, the difference between the false statement purporting that the property was 98 acres, more or less, and the actual size of 85.5 acres, was treated as surplus. In Gray v. Chadwick,[FN27] the purchaser agreed to buy 9.0 acres for $5,000 but, after signing the agreement, found that the land contained only 7.14 acres. The purchaser's claim for an abatement of $1,033.33 for the shortage of 1.86 acres was rejected because the court found that the sale was of the land as marked by the stakes that the purchaser had observed demarcating the boundaries of the land. It was not a sale by acreage, and the stated measurements were falsa demonstratio. In Rexhill Holdings Ltd. v. Maybird Investments Ltd.,[FN28] the purchaser's peculiar objection that the land was larger than represented in the agreement failed because the false part of the description was rejected.
It may be inferred from Wilson Lumber Co. v. Simpson that a vendor may be liable if the sale price is based on the size or dimensions of the property and if the vendor knowingly sells a property that is falsely described. Liability for the latter would appear to be based on the torts of fraudulent or negligent misrepresentation. It might also, of course, be based on any specific language in the agreement providing for adjustments of the price to correspond to the size or measurements of the property. Other authorities support the proposition that where the property is sold on the basis of its measurements and not in block and there is a material deficiency in the size of the property, the purchaser has ground to refuse to close the transaction or to claim compensation for the deficiency.[FN29]
The significance of the distinction between a block sale price and a measured price is confirmed by Murphy v. Horn,[FN30] another leading case and an important one about the significance of the words "more or less" in describing the measurements of the property. In this case, the vendor acquired his property in March 1928 by a deed that provided a metes and bounds description of the property using the archaic measurement of an arpent. The metes and bounds description stated that the property contained 10 arpents, more or less. Within a year, the vendor signed an agreement to sell the same land to the purchaser for $16,000. The price was determined at the rate of $1,600 per acre, and the vendor provided a description of the property measured in acres. The description was: "The ten acres more or less, being the part of farm 71 in the Township of Sandwich West, Essex county, Ontario, fronting on the fourth concession-road between Dougal and Huron Roads." The vendor knew that an arpent is smaller than an acre and that his land contained 10 arpents and not 10 acres, which would have been about 16.5 per cent larger. He knew that the purchaser anticipated acquiring acres, that the purchaser was acquiring the land for subdivision purposes and that, for this purpose, the value of the land would depend upon its size. Raney, J. held that the vendor was obliged to abate the price by 16.5 per cent. This outcome was justified on two alternative grounds. First, the vendor was liable on the ground of knowingly misrepresenting the size of the property. Second, even if the vendor had been acting in good faith, he would have been liable because the sale was not a block or lump sum sale but, rather, a sale where the price was tied to the actual measurements of the property. In granting the adjustment in the price, Raney, J. stated that the words "more or less" were "designed to cover small errors as sometimes occur in surveys".[FN31] It would seem to follow from the authority of Murphy v. Horn that the words "more or less" will not cover the case of a substantial discrepancy between contractual entitlement or expectation and the actual size of the subject property.[FN32]
The authority of Wilson Lumber Co. v. Simpson and Murphy v. Horn reveals that the words "more or less" have a limited scope of operation in the context of resolving disputes about the size of the property.[FN33] Where the sale is a block sale, the pertinent question is whether the deficiency is material. Where the sale is a sale by measure, the pertinent question is whether the deficiency is more than de minimus, that is, whether the deficiency is material. The question of whether a deficiency is substantial enough to entitle the purchaser to avoid the transaction is a question of materiality which, in turn, is a question of fact that depends upon all the circumstances of the case.[FN34] The authority of Wilson Lumber Co. v. Simpson and Murphy v. Horn thus illustrates once again that in matters of size, while the size of the property matters, it is just one of several factors that matters.
FN*. WeirFoulds LLP, Toronto.
FN1. See also: G.A. Alexandrowicz, Real Estate Transactions -- Cases, Text and Materials (Toronto: Emond Montgomery Publications Limited, 2003); B.J. Reiter, B.N. McLellan, P.M. Perell, Real Estate Law (4th ed.) (Toronto: Emond Montgomery Publications Limited, 1992); I. de Rijcke, "Description and Survey Issues" in B. Salvatore, C.R. Carter, P.M. Perell (eds.) Agreements of Purchase and Sale (Toronto: Butterworths, 1996); V. Di Castri, Law of Vendor and Purchaser (3rd ed.) (Toronto: Carswell, 1988), paras. 400, 401.
FN2. (1986), 54 O.R. (2d) 1, 38 R.P.R. 183 (Ont. C.A.); leave to appeal to S.C.C. refused  2 S.C.R. v (note) (S.C.C.).
FN3. (1984), 31 R.P.R. 143 (Ont. H.C.); reversed, but not on this point (1986), 54 O.R. (2d) 1, 38 R.P.R. 183 (Ont. C.A.); leave to appeal to S.C.C. refused  2 S.C.R. v (note) (S.C.C.).
FN4. (1991), 18 R.P.R. (2d) 122 (Ont. Gen. Div.)
FN5. See in particular Gray v. Chadwick (1922), 49 N.B.R. 144 (N.B. S.C.).
FN6. See P.M. Perell, "Refusing to Close a Real Estate Transaction" (2003), 7 R.P.R. (4th) 230.
FN7. Caruna v. Duca Community Credit Union Ltd. (1994), 20 O.R. (3d) 563, 41 R.P.R. (2d) 300 (Ont. C.A.); Holmes v. Graham (1978), 21 O.R. (2d) 289 (Ont. C.A.); Koffman v. Fischtein (1984), 49 O.R. (2d) 124, 35 R.P.R. 257 (Ont. H.C.); reversed (1986), 53 O.R. (2d) 671 (Ont. C.A.); Clements v. Wyatt (1979), 9 R.P.R. 1 (Ont. H.C.); Armitage v. Liptay (1977), 16 O.R. (2d) 223 (Ont. C.A.); affirming (1976), 12 O.R. (2d) 543 (Ont. H.C.); Zender v. Ball (1974), 5 O.R. (2d) 747 (Ont. H.C.); Marcobalt Mining Syndicate v. Gray,  O.R. 761 (Ont. C.A.); McNiven v. Pigott (1914), 31 O.L.R. 365 (Ont. C.A.); Keefer v. McKay (1884), 10 P.R. 345 (Ont. Master); Pyrke v. Waddingham (1852), 68 E.R. 813 (Eng. Ch. Div.).
FN8. Danby v. Stewart (1979), 23 O.R. (2d) 449 (Ont. H.C.); Keefer v. McKay (1884), 10 P.R. 345 (Ont. Master); Marjan Homes Inc. v. Iacobelli Construction Ltd. (1997),  O.J. No. 3075, 1997 CarswellOnt 3113 (Ont. Gen. Div.).
FN10. Redican v. Nesbitt,  S.C.R. 135 (S.C.C.); Franz v. Hansen (1918), 57 S.C.R. 57 (S.C.C.); Hyrsky v. Smith,  2 O.R. 360 (Ont. H.C.); Hunter v. Kerr (1912), 7 D.L.R. 829 (B.C. Co.
FN11. (1976), 12 O.R. (2d) 265 (Ont.
FN12. (1976), 12 O.R. (2d) 265 (Ont.
FN13. (1990), 73 O.R. (2d) 368, 12 R.P.R. (2d) 80 (Ont. H.C.). See also Stieglitz v. Prestolite Battery (1980), 31 O.R. (2d) 655, 17 R.P.R. 188 (Ont. H.C.).
FN14. (1986), 54 O.R. (2d) 1, 38 R.P.R. 183 (Ont. C.A.); leave to appeal to S.C.C. refused  2 S.C.R. v (note) (S.C.C.).
FN15. (1995), 48 R.P.R. (2d) 286 (Ont. Gen. Div.).
FN16. (1991), 19 R.P.R. (2d) 184 (B.C. S.C.); affirmed (1992), 27 R.P.R. (2d) 48 (B.C. C.A.).
FN17. (1918), 43 O.L.R. 521 (Ont. H.C.).
FN18. (1995),  O.J. No. 956, 1995 CarswellOnt 2411 (Ont. Gen. Div.).
FN19. Bouskill v. Campea (1976), 12 O.R. (2d) 265 (Ont. C.A.).
FN20. Bouskill v. Campea (1976), 12 O.R. (2d) 265 (Ont. C.A.).
FN21. (2000), 35 R.P.R. (3d) 316 (Ont. S.C.J.).
FN22. (1910), 22 O.L.R. 452 (Ont. C.A.); affirmed (1911), 23 O.L.R. 253 (Ont. C.A.).
FN23. See also: King v. Krstev (1994),  O.J. No. 2272, 1994 CarswellOnt 3774 (Ont. Gen. Div.); Ainsley v. Hicke Real Estate Ltd. (1975),  A.J. No. 27, 1975 CarswellAlta 249 (Alta. S.C.); Gray v. Chadwick (1922), 49 N.B.R. 144 (N.B. S.C.).
FN24. (May 2, 1983), Saunders J. O.J. No. 341 (Ont. H.C.).
FN25. Rexhill Holdings Ltd. v. Maybird Investments Ltd. (1972),  1 O.R. 285 (Ont. H.C.).
FN26. (2004), 19 R.P.R. (4th) 303 (Ont. S.C.J.).
FN27. (1922), 49 N.B.R. 144 (N.B. S.C.).
FN28. (1972),  1 O.R. 285 (Ont. H.C).
FN29. Pompeani v. Bonik Inc. (1997), 35 O.R. (3d) 417, 13 R.P.R. (3d) 1 (Ont. C.A.); Wardell v. Trenouth (1877), 24 Gr. 465 (Ont. Ch.); Moorehouse v. Hewish (1895), 22 O.A.R. 172 (Ont. C.A.); Flight v. Booth (1834), 131 E.R. 1160, 1 Bing. N.C. 370 (Eng. C.P.).
FN30. (1929), 64 O.L.R. 354 (Ont. H.C.).
FN31. Raney, J. cited the American case of Winton v. McGraw, 54 S.E. 506 (U.S. W. Va. S.C., 1906).
FN32. Sanderson v. Farmer (1979), 31 Nfld. & P.E.I.R. 298 (P.E.I. S.C.).
FN33. The presence of the words "more or less" may be more useful in other contexts. In Dynamic Transport Ltd. v. O.K. Detailing Ltd. (1978), 85 D.L.R. (3d) 19, 4 R.P.R. 208 (S.C.C.), the words "more or less" proved useful in resolving a dispute about whether the description of the property was sufficiently certain to satisfy the requirements of contract formation. In this case, O.K. Detailing Ltd. owned 5.42 acres of land upon which was located a warehouse. It agreed to sell the warehouse and "four acres of land more or less" to Dynamic Transport Ltd. After the agreement was signed, a survey revealed that the boundary of a four-acre parcel would run midway through the warehouse. Dickson, J. concluded that the contract was enforceable because the only reasonable construction was that the four acres was intended to be sold with an adjustment to encompass the warehouse.
FN34. Bouskill v. Campea (1976), 12 O.R. (2d) 265 (Ont. C.A.); Bowes v. Vaux (1918), 43 O.L.R. 521 (Ont. H.C.).