When a Spouse Refuses to Bar Dower
Many will think that the Supreme Court of Canada introduced good faith into contracts in Bhasin v. Hrynew (2014), however, it’s important to consider Mason v. Freedman where similar issues arose, and the Court made its first good faith decision.
Introduction
Real estate contracts are meant to be binding. But what happens when one spouse refuses to cooperate, specifically, when a wife refuses to bar her dower on the sale of land?
The Supreme Court of Canada dealt squarely with this issue in Mason v. Freedman, [1958] S.C.R. 483. The decision remains an important authority on the duties of a Seller who cannot deliver full title because of a spouse’s dower rights.
Background
Franklin Mason owned a farm in Scarborough and agreed to sell it for $136,000. The deal was straightforward, $20,000 cash, the balance by mortgage. But before closing, Mason announced that his wife would not bar her dower.
He offered to transfer the property without her signature and demanded payment. The Buyer refused, insisting on clear title. Mason then tried to return the deposit, claiming that the deal was off under a rescission clause in the contract that allowed him to cancel if he was “unable or unwilling” to clear objections to title.
The Buyer sued for specific performance, asking the Court to compel Mason to complete the sale.
The Legal Issue
Could Mason rely on the rescission clause to avoid the contract, claiming he was “unable” to get his wife’s consent?
Or was he still bound to perform, even if he couldn’t obtain her signature?
The Court’s Decision
The Supreme Court of Canada sided with the purchaser.
Mason was ordered to complete the sale and convey whatever title he could, even without his wife’s bar of dower. However, to protect the Buyer against any future dower claim, part of the purchase price (up to one-third) had to be paid into court as security.
Legal Principles
1. Vendor’s Obligation
A seller who promises to convey a property in fee simple cannot escape responsibility simply because their spouse refuses to sign away dower rights. The seller must either:
- Deliver clear title; or
- Convey whatever interest they hold, with appropriate compensation provided to the buyer.
2. Specific Performance with Compensation
The buyer may choose to enforce the contract and seek specific performance with compensation. The court can order that a portion of the price be held in trust or paid into Court to cover any potential dower claim.
3. Rescission Clauses Are Not Escape Hatches
A rescission clause does not allow a vendor to walk away “at his sweet will.”
The vendor must act reasonably, in good faith, and make a genuine effort to complete the deal.
Mason did none of this, he made no effort to persuade his wife to sign.
4. Good Faith Requirement
The court stressed that contractual discretion must be exercised honestly and reasonably. A vendor cannot rely on their own deliberate failure to meet contractual duties as an excuse for non-performance.
Outcome
The Court ordered specific performance with compensation. The sale had to proceed, and money was to be held in Court to secure the buyer against any dower claim. Mason also had to pay costs.
Legal Implications
While the Dower Act has long since been abolished in Ontario, the principles from Mason v. Freedman still resonate:
- Vendors (in fact, ALL parties) must act in good faith and take reasonable steps to fulfill their promises.
- Contract clauses offering relief (like rescission or limitation provisions) cannot be used capriciously or arbitrarily.
- Courts remain willing to grant specific performance with compensation when fairness demands it.
Conclusion
Mason v. Freedman is a reminder that real estate contracts are serious business. A vendor cannot simply declare a deal void when performance becomes inconvenient, especially if the obstacle arises from their own inaction or refusal to act in good faith.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com