LOLG Successful in Striking Down Contract at the Ontario Court of Appeal

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On January 21, 2025, the Court of Appeal for Ontario released its decision in Ottawa (City) v. ClubLink Corporation ULC, 2025 ONCA 34. This case concerned the enforceability of a contract between a landowner and the City of Ottawa that purported to restrict urban development on the subject land and require the continued operation of a golf course. At an earlier stage of the proceedings, LOLG succeeded in having two provisions of this contract declared void because they violated the rule against perpetuities. The issue before the Court of Appeal was the consequence of that finding—and specifically, what effect the unenforceability of those two provisions had on other parts of the contract (along with related agreements between the parties) that purported to restrict ClubLink’s ability to re-develop the golf course lands.

The Court of Appeal unanimously agreed with LOLG that the contract “could not survive” the removal of the two provisions that were earlier declared void for perpetuities, because those provisions together “provided for the contractually permissible path for redeveloping the golf course lands to another use”. Without those two provisions, the contract would require the golf course lands to be maintained for that purpose in perpetuity, which was “at odds with the intent of the parties” to ensure a pathway for the evolution of land use. The Court’s approach confirmed the primacy of the parties’ contractual intentions and reasonable expectations when determining when and how to enforce contractual agreements. Read the decision here.