The appellants granted the respondent a lease with an option to purchase, as well as a second option to purchase abutting lands.
The lands were in an area of subdivision control.
When the respondent attempted to exercise the options, the appellants refused to close, arguing that the agreement violated s. 29 of The Planning Act because they retained the fee in the abutting lands subject to the unexercised option.
The Supreme Court of Canada held that the grantor of an option does not retain the fee in the optioned lands, as they have bound themselves to dispose of the lands to the optionee and have no further control over their alienation.
The appeal was dismissed and specific performance was granted.
