International Airport Industrial Park Ltd. v. Tanenbaum, [1977] 2 SCR 326

Supreme Court of Canada

International Airport Industrial Park Ltd. v. Tanenbaum, [1977] 2 S.C.R. 326

Date: 1976-10-05

International Airport Industrial Park Limited (Plaintiff) Appellant;

and

Max Tanenbaum and Sheva Fischtein, Alan C. Wilson, Executors of the Estate of Motek Fischtein, Deceased (Defendants) Respondents.

1976: June 23; 1976: October 5.

Present: Laskin C.J. and Judson, Ritchie, Spence and Beetz JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Contracts—Privity of contract—Agreements in writing to develop land—Consideration—Motion for nonsuit allowed at trial.

Appellant sued Tanenbaum and Motek Fischtein for breach of contract alleging that by agreements in writing the latter were to participate in a scheme for development of lands owned by appellant. The trial judge allowed a motion for nonsuit on the basis that there was no privity of contract between Tanenbaum and appellant with respect to the agreement to develop the land. The Court of Appeal dismissed the appeal without written reasons. On further appeal appellant argued that the trial judge had erred in finding no privity of contract and allowing the nonsuit motion.

Held: The appeal should be dismissed.

The agreement did not establish that appellant had any contractual relationship with Tanenbaum with respect to development of the property. Further even if privity were found appellant would still fail as it did not establish that Tanenbaum or Fischtein breached their obligations.

Adam v. Newbigging (1888), 13 App. Cas. 308, distinguished.

APPEAL from a judgment of the Court of Appeal for Ontario dismissing without written reasons an appeal from a judgment of O’Driscoll J. at trial allowing a motion for nonsuit and dismissing an action for breach of contract. Appeal dismissed.

Claude R. Thomson, Q.C., for the appellant.

B. Freesman and G.B. Cooper, for the respondents.

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The judgment of the Court was delivered by

JUDSON J.—The appellant, International Airport Industrial Park Limited, sued Max Tanenbaum and the estate of Motek Fischtein for breach of contract, claiming damages and declaratory relief. At trial, the defendant Tanenbaum moved for non-suit on the grounds that there was no privity of contract between him and the plaintiff. After examining two written agreements, one between Tanenbaum and Fischtein, the other between Fischtein and International, O’Driscoll J. found that there was no privity of contract between Tanenbaum and International. He allowed the motion for non-suit and dismissed the action against both defendants since the plaintiff had indicated that it would not proceed solely against the estate of Motek Fischtein. The plaintiff appealed to the Court of Appeal for Ontario which dismissed the appeal without giving written reasons. Before this Court, the plaintiff sought to establish that the trial judge had erred in finding no privity of contract and allowing the motion for non‑suit.

The record discloses the following material facts. International Airport Industrial Park Limited, a company controlled by its president Louis Mayzel, was the owner of 173 acres of land in Oakville, Ontario, known as “the Jackson property”. The land was vacant, with 38 acres zoned industrial and the rest zoned agricultural. It was mortgaged to John F. Easterbrook to secure $200,000 and was also subject to a blanket mortgage for $750,000 held by Jacob C. Oelbaum, trustee, which covered several properties owned by companies controlled by Louis Mayzel. Mayzel and his son were personally liable on the two mortgages.

By November 1965, the $200,000 mortgage to Easterbrook was in foreclosure. The redemption period had been extended on condition that $50,000 be paid to the mortgagee by December 4, 1965, but Mayzel and his companies were seriously in debt and could not meet this condition. Mayzel approached several people for financing, including Max Tanenbaum. Mayzel testified that

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Tanenbaum declined to go into partnership with him on the land, but indicated that he might be interested in buying the property. Motek Fischtein finally arranged a transaction to “rescue” the land from foreclosure. It was agreed that Allan C. Wilson, as trustee for an unnamed party, would obtain assignments of the mortgages and redeem the property. The unnamed party, whose identity was not disclosed to Mayzel, was Max Tanenbaum.

On November 8, 1965, Mayzel on behalf of International signed a document which stated that Jacob C. Oelbaum, trustee, had agreed to assign to International his mortgage, insofar as it affected the Jackson property, and his right to redeem the property; that International consented to this mortgage being assigned to Wilson, trustee, upon payment to Oelbaum of $20,000 plus $500 costs; and that International agreed to transfer to Wilson, trustee, all its interest in the land for $16,000 (the amount paid by International for an extension of the redemption period on the Oelbaum mortgage) and other consideration. This agreement was signed only by International.

On November 30, 1965, Jacob C. Oelbaum, trustee, entered an agreement with Wilson, trustee, to assign his mortgage, insofar as it related to the Jackson property, for a consideration of $20,000. The assignment was registered December 17, 1965. On December 1, 1965, Mayzel on behalf of International executed a quitclaim deed in favour of Wilson, trustee, but did not deliver it until February 4, 1966.

On December 7, 1965, Fischtein, who had arranged for the financing from Tanenbaum to “rescue” International from foreclosure, entered into the following agreement with Wilson, as trustee for Tanenbaum:

“WHEREAS the Trustee (Wilson) is the registered owner of certain lands in the Town of Oakville, more particularly described in Schedule A attached hereto;

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AND WHEREAS it has been agreed that the Developer (Fischtein) shall be given an opportunity to promote the development and/or sale of the said lands on certain terms and conditions;

NOW THEREFORE in consideration of the mutual covenants contained herein and the sum of One Dollar ($1.00), receipt of which is hereby acknowledged by the Trustee, the parties hereto agree as follows:—

(1) For a period of two years from the date hereof the developer and the Trustee shall operate as a partnership limited to the development and/or sale of the lands described in Schedule A attached hereto.

(2) All major decisions as to policy or the expenditure of money shall be mutual. The Trustee shall provide funds for surveys, engineering and architectural fees, legal fees and local or provincial charges for subdividing the lands. The Developer shall do all necessary planning and negotiating for the development on the lands of a subdivision. The net profits from the development and/or sale of the premises within the two year period shall be divided, fifty per cent (50%) to each of the parties hereto, whether or not said profit is received during the currency of this agreement.

(3) In the event that a residential subdivision and/or such other commercial or industrial development as may be required is not approved by the Town of Oakville or the lands are not sold by the date of expiration of the partnership as set out herein, the Developer shall cease to have any interest in the said lands and shall not be entitled to remuneration of any kind for services rendered to or on behalf of the said partnership other than such profits as may accrue pursuant to paragraph 2 hereof.

(4) The Trustee agrees that the Developer may deal directly with the parties for whom the said Trustee holds in trust, it being understood that he holds no beneficial interest in the premises on his behalf, is under no personal liability in connection with his trust and shall be entitled to transfer title to the premises concerned to a stake holder or an officer of the Court should serious disputes arise between the Developer and the parties for whom the Trustee holds the premises in trust.”

It will be noted that this agreement describes Wilson, trustee, as registered owner of the property when, in fact, on December 7, 1965 he had no registered interest in the property. He had an unregistered assignment of a second mortgage and

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an unregistered quitclaim deed executed in his favour by the registered owner but not yet delivered.

On December 8, 1965, Fischtein entered into the following agreement with International:

“WHEREAS Fischtein has entered into an agreement with Allan C. Wilson, Trustee, concerning the development of certain lands and premises in the Town of Oakville, more particularly described in Schedule A attached hereto;

AND WHEREAS International wishes to participate in such development;

NOW THEREFORE THIS INDENTURE WITNESSETH that in consideration of the mutual covenants contained herein, the sum of Two Dollars ($2.00) now paid by International to Fischtein, and other valuable consideration, the parties hereto agree as follows:—

(1) Upon the coming into effect of the above recited agreement between Fischtein and Allan C. Wilson, Trustee, a partnership between the parties hereto shall come into existence wherein International shall be entitled to a fifty per cent (50%) interest in the benefits of the said agreement to Fischtein and shall be responsible for fifty per cent (50%) of the duties and liabilities imposed on Fischtein by the said agreement.

(2) The partnership contemplated herein shall automatically cease upon the termination of the above recited agreement between Fischtein and Allan C. Wilson, Trustee, and in any event, it shall terminate at the end of two years from the date hereof, if a subdivision has not been approved by the Town of Oakville on the lands proposed to be developed in the Town of Oakville by the said Motek Fischtein. Provided however that if the Town of Oakville has not given permission in writing within a period of twenty months from the date hereof for Fischtein to proceed with the preparation of a plan of subdivision, then the said Fischtein shall not be required to expend further time and energy on the proposed development.

(3) International acknowledges having read the said agreement between Fischtein and Allan C. Wilson, Trustee, and to have executed this indenture in the full knowledge and understanding of the terms thereof.

(4) It is agreed that should the Party of the Second Part hereto (International) register this agreement upon title or assign his interest therein, it shall automatically become null and void as concerns any benefits accruing to the said party so registering the

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agreement and he shall be subject to damages for breach of this agreement.”

Both of the above agreements were prepared, on Fischtein’s instructions, in the offices of Wilson, his solicitor. Wilson had no direct instructions from Tanenbaum, but testified that the agreement between Wilson, trustee, and Fischtein was in accordance with previous transactions in which Tanenbaum and Fischtein had participated. Wilson further testified that, as far as Tanenbaum was concerned, Fischtein was at liberty to deal with his interest in the transaction in whatever manner he pleased.

In a further document executed on December 8, 1965, the solicitors for International entered into an escrow agreement with Wilson, trustee, which provided that

“WHEREAS, Allan C. Wilson, Trustee, has agreed to take an assignment of mortgage #149173 as assigned to Jacob C. Oelbaum, Trustee, by assignment of mortgage registered as #160472 and to redeem the premises therein mortgaged.

AND WHEREAS, to extend the time for redemption in order to complete the said assignments and redemption proceedings, International Airport Industrial Park Limited expended the sum of Sixteen thousand dollars ($16,000.00).

AND WHEREAS it was agreed that the said sum of Sixteen thousand dollars ($16,000.00) would be repaid to International Airport Industrial Park Limited upon completion of the redemption and the registration of a final order of foreclosure.

NOW THEREFORE, in consideration of these presents and the mutual covenants contained herein, and other valuable consideration, the parties hereto agree as follows:—

(1) The Parties of the first part (International’s solicitors) will deliver to the Party of the Second Part (Wilson) the following documents:—

(a) Assignment of all its rights in an agreement to purchase the above mortgage from Jacob C. Oelbaum.

(b) Quit Claim Deed—Falgarwood Homes Limited (a company controlled by Mayzel which was registered owner of the property prior to International) to Allan C. Wilson, Trustee.

(c) Quit Claim Deed—Falgarwood Land Development Co. Limited to Allan C. Wilson, Trustee.

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(d) Quit Claim Deed—International Airport Industrial Park Limited to Allan C. Wilson, Trustee.

(2) The Party of the Second Part agrees to give to the Parties of the First Part a promissory note for Sixteen Thousand dollars ($16,000.00) payable to International Airport Industrial Park Limited (I.A.I.P.L.).

(3) The Parties hereto agree to hold the aforesaid documents and note in escrow until the Party of the Second Part completes the acquisition of the said property or until May 13, 1966, whichever shall first occur, provided that if the Party of the Second Part does not acquire the said lands within the time herein provided the documents and note shall be redelivered.”

On January 26, 1966, John F. Easterbrook assigned his mortgage to Allan C. Wilson, trustee, for $251,356.50 which was the amount then owing on the mortgage for principal and interest. Wilson, trustee, had also paid $50,000 to Easterbrook for the extension of the redemption period and $1,000 to Easterbrook’s solicitors for legal fees.

On February 1, 1966, Wilson, trustee, granted the land to Max Tanenbaum, carrying on business as Birchtree Investments. On February 3, 1966, a final order of foreclosure was issued in favour of the first mortgagee. This order was registered on February 4, 1966. On the same day, the quitclaim from International to Wilson, trustee, (executed December 1, 1965) and the grant from Wilson, trustee, to Tanenbaum (executed February 1, 1966) were registered.

Tanenbaum thus became registered owner of the 173 acres for a total consideration of $338,856.50, composed of the following amounts:

Assignment of Easterbrook mortgage	$251,356.50
Payment for extension of redemption period on Easterbrook mortgage	50,000.00
Legal fees on Easterbrook mortgage	1,000.00
Assignment of Oelbaum mortgage	20,000.00
Legal fees on Oelbaum mortgage	500.00
Payment to International for costs in extending Oelbaum mortgage	16,000.00
	$338,856.50

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According to the testimony of Mayzel, the property was worth three times this amount, but no evidence was tendered to support this assertion. Wilson testified that Fischtein considered the cost of the property to Tanenbaum, approximately $2,000 per acre, to be a little high. Wilson also testified that Mayzel had no equity in the property and that the “salvage operation” was designed to relieve Mayzel and his son from their personal liability on the mortgages.

The agreement of December 7, 1965 required that the property either be sold within two years or approved for “residential subdivision and/or such other commercial or industrial development as may be required”. Wilson testified that when this agreement was executed, neither Fischtein nor Tanenbaum knew what the prospects were for developing the land and that the two-year term was inserted following the precedent of other agreements between Fischtein and Tanenbaum. In early 1966, Fischtein engaged an engineer and, at a meeting attended by Mayzel, instructed him to proceed with plans for subdivision of the property. On February 1, 1966, the engineer informed Fischtein that there was firm and unanimous opposition among officials to development of the property, other than the 38 acres already zoned industrial.

Mayzel talked to Fischtein and the engineer at various times in 1966 asking for progress reports and urging them, unsuccessfully, to proceed with development plans. By the spring of 1967, time was running out on the two year development agreement, so Mayzel proceeded on his own to develop plans and seek approval from the Town of Oakville for a plan of subdivision. He obtained a letter from the Mayor of Oakville, dated July 25, 1967, saying that although residential development would not likely be approved for several years, industrial development of part of the land would be welcome. In October 1967, Mayzel hired consulting engineers, surveyors and lawyers to prepare a subdivision application with respect to the approximately 38 acres which were already zoned

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industrial. The remaining 135 acres of agricultural land were not affected. Mayzel submitted the application without the co-operation or support of Fischtein, Wilson or Tanenbaum. On December 14, 1967, seven days after the December 7, 1965 agreement had expired, the Oakville Planning Board approved in principle the subdivision of the industrial lands.

By letter dated December 18, 1967, Tanenbaum informed the Oakville Planning Board that he was the sole owner of the property, that he had not authorized any plan of subdivision to be made, and that his intention was to submit a residential plan for the entire property when the necessary services became available. The Planning Board informed Mayzel by letter dated December 21, 1967, that no further action would be taken on the proposed subdivision until authorization for the application was confirmed by the registered owner.

International sued Max Tanenbaum and Motek Fischtein, alleging that by virtue of the December 1965 agreements International had a twenty-five per cent interest in a scheme to develop the lands. International asserted that an implied term of the agreements was that Fischtein would exercise reasonable efforts to develop the lands and Tanenbaum would sign the necessary documents. International further alleged that Fischtein and Tanenbaum had refused to comply with these obligations. The plaintiff sought a declaration that the land is owned in common by International, Tanenbaum and Fischtein, and that the owners are partners with respect to its development. It also claimed an accounting from the partners and damages of $500,000. In his statement of defence, Fischtein denied any default, neglect, breach of duty or breach of contract. He asserted that no plan of subdivision had been approved in accordance with the agreements and that the agreements had expired. The defendant Tanenbaum denied that he had any contract with or obligation to the plaintiff.

The plaintiff moved to amend its statement of claim to allege that “Motek Fischtein entered into

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the agreement which he signed with the plaintiff on behalf of himself and as agent and trustee for the defendant Tanenbaum…”. The application was dismissed by the Master and an appeal to a Judge in Chambers was unsuccessful. When the plaintiff changed solicitors before trial, he was left free to seek further amendments alleging fraud and conspiracy, but no such amendments were made.

At trial, the plaintiff’s counsel introduced as exhibits the December 7, 1965 agreement between Wilson, trustee, and Fischtein, and the December 8, 1965 agreement between Fischtein and International. He asked that, on the basis of the circumstances and the agreements themselves, the trial judge read into the agreements the implied terms that Wilson, trustee, and Fischtein were to use their best efforts to obtain approval of the Town of Oakville for a plan of subdivision. The trial judge ruled that since the parties had signed the documents in full knowledge and since there was no suggestion of misrepresentation, fraud, or lack of independent legal advice, no terms could be implied into the written contracts.

The plaintiff called as witnesses Louis Mayzel, one of Mayzel’s former employees, and Allan C. Wilson who testified as to the negotiations and dealings among the parties. Counsel for the defendant Fischtein estate called two witnesses, both officials of the Town of Oakville, who testified to the effect that in the period 1965-67 there were no prospects of gaining approval of a subdivision plan on the whole Jackson property for residential, commercial and industrial development. Counsel for the defendant Tanenbaum moved for a non-suit and indicated that he would call no evidence.

O’Driscoll J. allowed the motion for non-suit and dismissed the action against both defendants for the following reasons:

“…it is my view that there never was any privity of contract between Mr. Wilson, Trustee for Mr. Tanenbaum, and International Airport Industrial Park Limited. It therefore follows that there was no privity of contract, there was never any agreement, there was

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never any contract between the plaintiff in this action and the defendant Max Tanenbaum.

It therefore follows quite simply that, this being the situation, there is no cause of action, there being no agreement, there being no contract, and the motion for non-suit must be allowed and the action of the plaintiff as against Tanenbaum dismissed with costs.

Mr. Mark, on behalf of International Airport Industrial Park Limited, with the president thereof beside him, namely Mr. Mayzel, has stated in open court that if I should make the finding that I have made, his client (the plaintiff)—having been instructed by the president thereof—is not desirous of proceeding against the Estate of the late Motek Fischtein. That being the situation, the action against the Fischtein Estate is dismissed, also with costs.”

Jessup, Brooke and Arnup JJ.A. dismissed the plaintiff’s appeal without calling on the respondent and without giving written reasons.

Before this Court, the appellant argued that the trial judge had erred in granting a motion for non-suit on the basis that there was no privity of contract between the appellant and Tanenbaum. It was submitted that the trial judge erred (1) in refusing to hear evidence of the negotiations leading up to the agreements of December 7 and 8, 1965; (2) in failing to find that Wilson acted as trustee not only for Tanenbaum but for a partnership of Tanenbaum, Fischtein and the appellant; and (3) in failing to give effect to the escrow agreement of December 8, 1965, which, when read together with the other agreements of December 7 and 8, 1965 and preceding agreements, indicated a contractual relationship between the appellant and Tanenbaum.

Although the trial judge had ruled that evidence of negotiations could not be adduced for the purpose of reading into the documents an implied term, the record shows that he did not prevent either Mayzel or Wilson from testifying about the dealings which preceded the agreements. Mayzel alleged that the agreements of December 7 and 8, 1965 were intended to create a partnership among Tanenbaum, Fischtein and International, but this assertion is not supported by the evidence. Mayzel himself testified that Tanenbaum had refused to enter a partnership with him, and Wilson testified that Tanenbaum did not care how Fischtein dealt

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with his own interest in their several partnerships. It seems clear that there was no shared intention to create a partnership between International and Tanenbaum.

The appellant submitted that the agreement of December 7, 1965 between Wilson, trustee, and Fischtein, indicates that Wilson acted as trustee for a partnership since it refers, in para. 4, to “parties for whom the trustee holds in trust”. Paragraph 4 provides for direct dealing between Fischtein and the “parties” and possible conflicts between Fischtein and the “parties”. Wilson, when called as the plaintiff’s witness, testified that he acted as trustee only for Tanenbaum, and not for a partnership between Tanenbaum, Fischtein and the appellant. He explained that he used the term “parties” when drafting the December 7, 1965 agreement because he did not know whether the financing would come solely from Tanenbaum personally or from a combination of sources. Wilson’s evidence is consistent with International’s own claim that it had a twenty-five per cent interest in development profits. If International was right in contending that “the parties for whom the trustee holds in trust” refers to a partnership composed of itself, Tanenbaum and Fischtein, it would be entitled to a share in the fifty per cent interest of the partnership as well as the twenty-five per cent interest it claims.

International submitted that, at the least, Fischtein had assigned to it part of his interest in the partnership agreement with Tanenbaum. This, however, does not assist the appellant. The Partnerships Act, R.S.O. 1970, c. 339, s. 24, rule 7, provides that, subject to an express or implied agreement between the partners, new partners may be introduced into a partnership only with the consent of each existing partner. On Mayzel’s own testimony, it is clear that Tanenbaum would not have agreed to accept International as a partner, although he was willing to allow Fischtein to deal with his partnership interest as he pleased. Section 31 of the Act provides that where a partner assigns his interest or part of his interest to another person who is not accepted into the partnership, the assignee’s only right against the partnership is to

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receive the share of profits to which the assigning partner would be entitled on the basis of the account of profits agreed to by the partners. The assignee is not entitled to interfere in the management or administration of the partnership. If, as in this case, the partnership produces no profits, the assignee has no rights against the partnership.

It was also argued on behalf of the appellant that although the agreements of December 7 and 8, 1965 were deliberately drafted so as to avoid formal privity of contract between Tanenbaum and International, the evidence establishes in substance a joint venture on the part of Tanenbaum, Fischtein and International. The appellant relied on Adam v. Newbigging[1], in which Lord Halsbury, L.C. stated at p. 315 that:

“If a partnership in fact exists, a community of interest in the adventure being carried on in fact, no concealment of name, no verbal equivalent for the ordinary phrases of profit or loss, no indirect expedient for enforcing control over the adventure will prevent the substance and reality of the transaction being adjudged to be a partnership; and I think I should add, as applicable to this case, that the separation of different stipulations of one arrangement into different deeds will not alter the real arrangement, whatever in fact that arrangement is proved to be.

And no ‘phrasing of it’ by dexterous draftsmen, to quote one of the letters, will avail to avert the legal consequences of the contract.

In that case, however, there was evidence establishing a partnership in fact and an attempt on the part of the partners to conceal from outsiders the involvement of two of their number. As Lord Halsbury stated, at p. 316:

No one has ever doubted that if the adventure is carried on for a person so that it is his business, then he is a partner, whatever subtle contrivance he may resort to to cloak and muffle the real nature of his interest in the concern.

Adam v. Newbigging does not advance the argument of the appellant in this case where there is no evidence acceptable to the trial judge and the Court of Appeal of a partnership between Tanenbaum and International.

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Even if there were no shared intention to create a partnership between Tanenbaum and International, the question remains whether the agreements entered into by Wilson, trustee, Fischtein and Mayzel on behalf of the appellant, established a contractual relationship between Tanenbaum and the appellant. The trial judge looked only at the December 7, 1965 agreement between Wilson, trustee, and Fischtein, and the December 8, 1965 agreement between Fischtein and International, concluding that there was no privity between Tanenbaum and the appellant. The appellant submitted that the escrow agreement of December 8, 1965 between the appellant’s solicitors and Wilson, trustee, should be read in conjunction with the other two agreements. The escrow agreement confirms that Wilson, trustee, had agreed to redeem the property and compensate International for costs of $16,000, and that International had agreed to execute a quitclaim with respect to its interests in the property. Although the agreement establishes that Wilson and Mayzel dealt with each other to facilitate the redemption and transfer of the property, it does not establish that International had any contractual relationship with Tanenbaum with respect to development of the property.

The plaintiff failed to establish that it gave anything more than a quitclaim as consideration for an alleged contract with Tanenbaum. Although Mayzel testified that the appellant’s equity in the property was three times the amount of the outstanding mortgages, no evidence was adduced to support this assertion which was challenged on cross-examination. Wilson testified that $2,000 an acre, the price in effect paid by Tanenbaum, was considered by Fischtein to be at least equivalent to market value. Wilson’s testimony that International had no equity in the land is supported by Mayzel’s admission that he and his companies were seriously in debt and by the fact that the first mortgagee agreed, shortly before the final order of foreclosure, to assign his mortgage for the amount owing to him for principal and interest. Mayzel asserted that he had entered into the transactions with Fischtein and Wilson in order to protect his equity, but his dealings are equally consistent with an attempt to avoid liability on his personal guar-

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antees. Thus, although it is clear that Mayzel negotiated with Wilson with respect to the redemption of the property and its transfer to Wilson, there is no evidence that was accepted that Tanenbaum, or Wilson on his behalf, agreed that International would have an interest in the profits of development of the land or that International gave valuable consideration for such an interest.

The trial judge was justified in allowing the defendant Tanenbaum’s motion for non-suit on the basis that there was no privity of contract between Tanenbaum and International with respect to the agreement to develop the land.

Even if privity were found, the plaintiff would not succeed since it did not establish that Tanenbaum or Fischtein breached their obligations. The December 7, 1965 agreement between Wilson, trustee, and Fischtein established a partnership for two years, limited to the development or sale of the property. Wilson, as trustee for Tanenbaum, undertook to “provide funds for surveys, engineering and architectural fees, legal fees and local or provincial charges for subdividing the lands”. Fischtein undertook to “do all necessary planning and negotiating for the development on the lands of a subdivision”. The agreement required approval within two years of “a residential subdivision and/or such other commercial or industrial development as may be required”. Fischtein was advised early in 1966, and the evidence at trial established, that there was no likelihood of obtaining approval for a plan of subdivision with respect to the whole property within the two year time limit. Fischtein was thus justified in refusing to proceed with development plans. There is no evidence that Wilson or Tanenbaum refused to provide funds for the costs incurred by Fischtein.

When Mayzel entered the December 8, 1965 agreement with Fischtein, he had full knowledge of the terms of the December 7, 1965 agreement and was aware of the prospects for development of

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the land. International assumed fifty per cent of Fischtein’s duties under the December 7, 1965 agreement, but although Mayzel urged Fischtein to pursue subdivision approval, he did not take any initiative himself to develop subdivision plans or submit accounts for expenses until October 1967. The plans he developed related to an industrial subdivision on only one‑fifth of the land, and thus did not meet the terms of the December 7, 1965 agreement. Neither Fischtein nor Tanenbaum was obliged to support an application for approval of this partial subdivision plan. The plaintiff’s failure to establish that either Tanenbaum or Fischtein breached their obligations under the December 1965 agreements provides additional grounds, for the trial judge’s decision to allow the motion for non-suit.

I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Campbell, Godfrey & Lewtas, Toronto.

Solicitors for the respondents: Robins & Robins, Toronto.