Yes and yes, said Gillese JA on behalf of the Ontario Court of Appeal in Benzie v Hania, 2012 ONCA 766. The Kunins had three children: Michael (a daughter), Barbara and Mitchell. Michael married Norman Benzie, an American, and was planning to move with him to New Mexico, but to entice them to stay in Ontario Mr Kunin proposed to sell the family's farm property to Michael, who had spent a considerable amount of money on it. Barbara opposed the sale, wanting the property to remain 'a family property' (although title was actually in her name for financial and tax reasons). As a compromise, Mr Kunin proposed an arrangement whereby the property would be transferred to Michael but her siblings would have a right of first refusal (RFR) if she ever decided to sell, and the net proceeds of any sale of the property would be divided among them equally. The agreement they signed in 1987 to effect this also provided in an enurement clause that it was binding on the heirs, administrators and successors of the siblings. Barbara agreed to let Michael convey title to herself and Norman as joint tenants, provided the latter undertook to be bound by the terms of the 1987 agreement, including the RFR. The agreement and the undertaking were registered on title under the Registry Act, and later migrated to Land Titles. The Kunin siblings subsequently fell out. Michael and Norman sought to have the 1987 agreement deleted from the Land Titles registry and obtain a declaration stating that it was not binding on non-parties (including Norman, Michael's children by him and her children from a previous marriage) and the undertaking unenforceable.
The judge declined to grant the application, reasoning that the agreement was intended to survive the deaths of the parties and create an interest that bound anyone who might inherit it. Those who inherited the property also inherited the terms of the agreement. Norman was bound by the agreement because he signed the undertaking, and received consideration for that in the form of Barbara's forbearance from enforcing her rights under the agreement. The agreement was properly registered initially and also properly translated to the Land Titles system. The Court of Appeal agreed. The fact that the heirs were not parties to the original contract was essentially a red herring. Because the agreement was not a contract based on personal considerations (e.g. individual skill or confidence), it did not terminate with the death of one of the parties. Michael's estate would be bound by it after her death and so, Justice Gillese thought, should her heirs (based on a couple of Canadian cases where a RFR has survived the death of one of the original parties). The RFR would be binding on both Michael's kids and her widower after her death, consistent with the enurement clause. Norman's undertaking was enforceable for the reasons given by the judge at first instance. On the registration point, Michael and Norman were incorrect in arguing that the RFR couldn't be registered because it wasn't a covenant that runs with the land. A RFR isn't a covenant at all, but a personal right – and it met the criteria for a registrable instrument. Michael and Norman's application failed, with the result that the RFR will continue to operate after Michael's death.
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