The appellant sold a surplus grain terminal to a purchaser with an agreement intended to include a restrictive covenant preventing the property's use for grain handling.
The property was later sold in a tax sale to a new purchaser who intended to use it for grain handling.
The appellant sued for a declaration that the restrictive covenant ran with the land and sought rectification of the original agreement if the covenant was found defective.
The motion judge struck out the rectification claim as disclosing no reasonable cause of action and declared the covenant did not survive the tax sale.
The Court of Appeal allowed the appeal, finding that it was not plain and obvious that the rectification claim could not succeed, and set aside the declaratory orders.
