Month: April 2021

Polyamorous Triad Registered as Child’s Parents

British Columbia Birth Registration No. 2018-xx-xx5815 2021 BCSC 767 ordered the three members of a polyamorous “triad” to be registered as the three parents of a new born baby. The three petitioners commenced living in a committed polyamorous relationship in 2017.

In the fall of 2018 the biological parents had a child and by reason of the provisions of the Family Law act, they are the only legal parents registered on the child’s birth registration.

The three of them however have been equally involved in the child’s caregiving , love and nurturing and they have gone on trips together as a family to visit all of the three petitioner’s families.

The court awarded the third party to the triad be registered on the birth registration as a legal parent.

S.26 Family law act stipulates that if a child is born through sexual intercourse then the child’s parents are the birth mother and the child’s presumed biological father.
S. 30 allows for three legal parents if there is a written agreement as to such. This would probably more likely happen in assisted reproduction circumstances
S. 31 Family Law act sets out the circumstances in which the court may make a parentage declaration, but the law requires there to be a dispute or uncertainty before exercising that statutory jurisdiction. Re Family Law Act 2016 BCSC22 at paras. 42-43.

There was no uncertainty or dispute about parentage in the petition.

Parens Patriae Jurisdiction

The court’s parens patriae jurisdiction may be used to bridge a legislative gap. A.A. v B.B. 2007 ONCA 2 at para. 27, and can do so from changing social conditions.

Here the judge found that there was a gap in the Family Law act with regard to children conceived through sex who have two or more parentn .

TO remedy the gap pursuant to S 1923) of the FLA, exercised the courts parens patria and declared the three petitioners as the child’s legal parents.

Parentage Declarations

In the said AA v BB decision, A.A., B.B. and C.C. sought to have A.A.’s motherhood recognized to give her all the rights and obligations of a custodial parent. Legal recognition of her relationship with her son would also determine other kindred relationships. In their very helpful factums, the M.D.R. Intervenors and the Children’s Lawyer summarize the importance of a declaration of parentage from the point of view of the parent and the child:

the declaration of parentage is a lifelong immutable declaration of status;
it allows the parent to fully participate in the child’s life;
the declared parent has to consent to any future adoption;
the declaration determines lineage;
the declaration ensures that the child will inherit on intestacy;
the declared parent may obtain an OHIP card, a social insurance number, airline tickets and passports for the child;
the child of a Canadian citizen is a Canadian citizen, even if born outside of Canada (Citizenship Act, R.S.C. 1985, c. C-29, s. 3(1)(b));
the declared parent may register the child in school; and
the declared parent may assert her rights under various laws such as the Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched. A., s. 20(1)5.

Perhaps one of the greatest fears faced by lesbian mothers is the death of the birth mother. Without a declaration of parentage or some other order, the surviving partner would be unable to make decisions for their minor child, such as critical decisions about health care: see M.D.R. at para. 220. As the M.D.R. Intervenors say: “A declaration of parentage provides practical and symbolic recognition of the parent-child relationship.” …

Adjournment of a Trial

The decision to adjourn a trial hearing is a discretionary one, governed by the interests of justice and necessitating a balancing of interests: Sidoroff v. Joe (1992), 76 BCLR (2d) 82 BCCA .

The court outlined some relevant factors in Navarro v. Doig River First Nation, 2015 BCSC 2173:

A judge exercises discretion when an adjournment is sought and has wide powers in relation to the order that is made. The discretion must, of course, be exercised judicially in accordance with appropriate principles. The exercise of discretion is a delicate and difficult matter that addresses the interests of justice by balancing the interests of the plaintiff and of the defendant. This balancing requires a careful consideration of all of the elements of the case including the nature of the proceedings and the parties.

The Court of Appeal will be extremely reluctant to interfere with a decision of a trial judge on an adjournment matter which is integral to exercise of judicial discretion.

There are numerous factors to be considered on an adjournment application.

The paramount consideration is the interest of justice in ensuring that there will remain a fair trial on the merits of the action.

Because the overall interests of justice must prevail at the end of the day, courts are generous rather than overly strict in granting adjournments, particularly where granting the request will promote a decision on the merits.

The natural frustration of judicial officials and opposing parties over delays in processing civil cases must give way to the interests of justice, which favours a claimant having his day in court and a fair chance to make out his case.

Other factors or considerations include (in no particular order of priority):

• the expeditious and speedy resolution of matters on their
merits (Rule 1-3(1));

• the reasonableness of the request;

• the grounds or explanation for the adjournment;

• the timeliness of the request;

• the potential prejudice to each party;

• the right to a fair trial;

• the proper administration of justice;

• the history of the matter, including deliberate delay or misuse of
the court process; and

• the fact of a self-represented litigant.

S. 158 WESA- Removal of an Executor

The Estate of Jean Maureen Dahle, deceased 2021 BCSC718 discussed the law relating to the removal of an executor, both under s 158 WESA, the common law and S. 31 Trustee Act.

The court was asked by two co executors to remove the other.

The court declined to remove either but appointed a third corporate trustee as a third co executor.

THE LAW

Section 158(3) of the WESA builds on the common law jurisprudence and provides statutory authority for removal of an executor of an estate (referred to as a “personal representative” in the WESA) in circumstances where the Court considers that the executor should not continue in office. The relevant part of s. 158(3) provides:

(3) Subject to the terms of a will, if any, and to subsection (3.1), the court, by order, may remove or pass over a person otherwise entitled to be or to become a personal representative if the court considers that the personal representative or person entitled to become the personal representative should not continue in office or be granted probate or administration, including, without limitation, if the personal representative or person entitled to become the personal representative, as the case may be,
…
(f) is

(i) unable to make the decisions necessary to discharge the office of personal representative,
(ii) not responsive, or
(iii) otherwise unwilling or unable to or unreasonably refuses to carry out the duties of a personal representative,
to an extent that the conduct of the personal representative hampers the efficient administration of the estate, or
…
[ Section 158(4) of the WESA provides that an order to remove an individual as an executor does not remove that person as a trustee of the estate.

Section 31 of the Trustee Act provides the statutory authority for the Court to remove an individual as a trustee, including as a trustee of an estate:

31 If it is expedient to appoint a new trustee and it is found inexpedient, difficult or impracticable to do so without the assistance of the court, it is lawful for the court to make an order appointing a new trustee or trustees, whether there is an existing trustee or not at the time of making the order, and either in substitution for or in addition to any existing trustees.

[A testator’s discretion to choose their executors and trustees should be given deference and not interfered with lightly: DeCotiis v. DeCotiis, 2008 BCSC 1206 at paras. 11–12. Ms. Dahle did not provide either Tim or Martin with sole decision-making power with respect to the estate or the Nickey Trust, and thus, they must exercise their duties jointly as co-executors and co-trustees and they are expected to act unanimously: Clock Holdings Ltd. v. Braich Estate, 2008 BCSC 1697 at para. 16.

While not determinative, animosity among co-executors may be a relevant factor in determining whether it is reasonable for them to be expected to carry out their duties effectively and efficiently: Nieweler Estate (Re), 2019 BCSC 401 at para. 29 [Nieweler]. To this I would add that it is relevant to consider whether the animosity is such that the duties could not be carried out efficiently and effectively, even with the assistance of a third party.

Unreasonable delay and failure to act to distribute an estate may be grounds for removal. In Dirnberger Estate, 2016 BCSC 439, Justice Kelleher referred to the Court of Appeal’s decision in Conroy v. Stokes, [1952] 4 D.L.R. 124 (B.C.C.A.) [Conroy] when describing the categories of conduct that can warrant removal of an executor:

There are four categories of conduct on an executor’s part that will warrant removal:

1. endangerment of the trust property;
2. want of honesty;
3. want of proper capacity to execute the duties; and
4. want of reasonable fidelity.

In Nieweler, Justice Myers applied the categories from Conroy concurrently with the application of the factors listed in s. 158 of the WESA. At para. 31, Justice Myers emphasized the importance of the welfare of the beneficiaries as the key factor in the exercise of the Court’s discretion to remove an executor:

[ The main guide in exercising the Court’s discretion to remove trustees is the welfare of the beneficiaries: Letterstedt at 387. It is not the interests of a particular beneficiary that are to be considered, but rather the benefit of the beneficiaries collectively: Conroy v. Stokes, at 128; Re Winter Estate, at para. 22.

It is important to note that perfection is not expected of an executor and not all acts of misconduct will lead to removal. Justice Thompson summarized this principle concisely in Estate of Forbes McTavish Campbell, 2015 BCSC 774 [Forbes McTavish]:

In Levi-Bandel v. McKeen, 2011 BCSC 247, Mr. Justice Butler removed a co-executrix. At paras. 15-16, he referred to the authorities supporting the inherent power of the court to remove a trustee. The test for removal of a trustee is the welfare of the beneficiaries of the trust estate: Letterstedt v. Broers (1884), 9 App. Cas. 371 (P.C.); Conroy v. Stokes, [1952] B.C.J. No. 111 (C.A.). Not every act of misconduct should result in removal. The question is whether the acts or omissions endanger the trust property or show a want of honesty or proper capacity to execute the duties or reasonable fidelity: Letterstedt, at 386.
[Emphasis added.]

Section 159 of the WESA provides the Court with the statutory authority to appoint an executor in circumstances where the Court has discharged or removed an executor. However, the WESA, unlike s. 31 of the Trustee Act, does not explicitly provide the Court with statutory authority to appoint an additional executor where an order for removal is not made. Nonetheless, the parties are in agreement, and I also accept, that this Court’s inherent jurisdiction provides me with the authority and discretion to appoint an additional executor in circumstances where no removal order is made so long as such an order is in the best interests of the welfare of the estate’s beneficiaries.

Typical Signs of Dementia

Typical Signs of Dementia

1. Short Term Memory Loss:

Everyone nervously laughs when they walk into a room and can’t remember the reason for doing so, but short-term memory loss is a far different matter and is a telltale indication of possible dementia.

Short-term memory loss is typically the first symptom that others pick up on and typically relates to items such as:

• Repeatedly asking the same question
• repeatedly telling the same story or joke
• seemingly having a long-term memory, but subject to verification.

2. Depression

• Many seniors suffer from depression and the difficulty with a demented person is that they may not realize they are depressed. Signs of depression can be loss of interest in activities, hobbies, and other people, trouble concentrating, isolation and general apathy.

3. Anxiety

Anxiety and general agitation can be caused by a number of different medical conditions, but anyone who is suffering from dementia is experiencing a profound loss of their ability to understand and function properly, and thus it can be frightening and anxiety provoking. Changes in residences, environment, caregiver arrangements, and other related matters can cause confusion and anxiety.

4. Difficulty Finding Words or Communicating

• People with the most common types of dementia, such as Alzheimer’s disease and vascular dementia often have aphasia, which can cause difficulty in finding words, and remembering the names of people they know well.

5. Reasoning and Problem Solving

• The accumulated effect of the decline in communication, learning, remembering, and problem solving may occur either quickly or very slowly over time depending on which area of the brain is affected.

6. Difficulty Performing Common Tasks

• having dementia can make many everyday tasks increasingly problematic. This can range from everything from choosing your clothing and dressing oneself to using a coffee machine and everything in between. After having performed many of these tasks innumerable times, it suddenly becomes problematic, and many people begin to hide their problems at this point.

7. Coordination and Motor Impairment

• similarly, many common tasks such as buttoning a button, removing the lid, or even chewing and swallowing can become increasingly difficult

8. Confusion and Disorientation

• In the earlier stages, the confusion and disorientation may be quite mild, but will typically become more severe over time, so that it can become difficult and recalling recent events, making decisions or understanding what others have stated.

9. Personality Changes

It is not uncommon for passive people to become more violent or other such notable significant personality changes.

10. Inappropriate Behavior

It is not uncommon for demented people to act or talk inappropriately, such as saying hurtful things to loved ones .

11 Paranoia

It is not uncommon for demented people to become suspicious of those around them, and accuse them of theft of items such as a saucer or cup, or alleging infidelity or other improper behavior.

12. Spatial Problems

• Getting lost while driving is often an indication of a confused mind. The degree of the demented is probably worse if one becomes lost in their own neighborhood

Fraudulent Executor Ordered to Pay Costs

Kyle estate 2017 BCSC 752 held that an executor who misappropriated trust funds was denied the legal costs of defending the pursuit of those assets and either double costs or special costs were awarded against the executor on the basis of public policy, rather than the costs be borne by the estate.

The executor had been removed by court order, and it was determined that approximately $450,000 had been misappropriated from estate funds by him.

He was not forthright with his mother and siblings regarding what appeared by them to be sums missing from the estate of the deceased, had obtained a grant of probate of the will of the deceased without disclosing the joint account, and had failed to meet the onus of showing that it was the intention of the deceased to make an absolute gift of the monies in the joint account to himself.

The court also found that the former executor undertook almost 2 years of misdirection and deceit to knowingly permit inaccurate information to be conveyed by the estate lawyer and was not honest, complete or neutral in disclosing the benefits he had received from the deceased.

The other beneficiary was awarded full indemnification for his legal costs and expenses as a result of pursuing a claim against the former executor.

In a proceeding involving the misconduct of an executor or trustee, including where the executor has acted dishonestly and in breach of fiduciary obligations, the beneficiary may obtain an award of special costs against the executor personally and, if the executor is a beneficiary under the estate, these costs can come out of the executor share of the estate. Szpradowski v Szpradowski Estate (1992) 44 ETR 89

Szpradowski at para. 227 stated ” there is no reason why the estate of the legatee, should bear the cost of which the executor put the estate “-

Wills Variation: Abandoned Twins Awarded 70% Estate

Jung v Poole estate 2021 BCSC 623 awarded two twins who were abandoned by their father shortly after birth and then again after a contested custody application at age 4, 70% of the residual estate of the deceased, with the two neighbors who had been left the estate receiving 15% each.

After abandoning the children at birth, and subsequently losing a custody trial, despite being awarded generous parenting time, the deceased through bitterness blame the children and in his last will, stated that they were illegitimate, that he wanted no part of his estate to go to them, and he instructed his executors to fight any attempt by them to vary the will.

The court found that the deceased attitude towards the children was misguided, ill-conceived, and a breach of his moral obligation to provide for the twins.

The Law

The validity of the testator’s reasons for disinheriting an adult child is based on fact. The rationality of his or her reasons must consist of a logical connection between the facts and the act of disinheritance . Kelly v baker 1996 BCJ 3050 BCCA.

A testator’s failure to support his or her minor children is a factor that can be considered in determining the existence of a moral claim. Brown v . Ferguson 2010 BC SC 1890 at para 101.

An adult child’s decision to have no contact with the testator can be a rational ground for disinheritance. Enns v Gordon Estate 2018 BC SC 705 at 103 – 106.

However if the lack of a relationship between the testator in his or her child was the testator’s fault, as opposed to mutual estrangement, a moral duty can be found in can intensify if the testator rejects the child’s efforts at reconciliation. Lamperstorfer v Plett 2018 BC SC 89 at para 195.

The moral duty of a testator who has been rejected by member of his or her family is not required to ignore the rejection. The testator must be judicious, he need not be impervious . Hall v . Hall, 2011 BC CA 354 at para 26 – 27.

The moral obligation of a testator to a child begins when the child is born. The law of nature leaves each child utterly dependent upon his or her parents during infancy, and by extension to childhood in later years and a diminishing capacity. Tomlyn v Kennedy 2008 BCSC 331

In the Court of Appeal decision Gray v Nandel 2002 BCCA 94 the court stated at paragraph 17:

” I cannot accept that a child so neglected for his first 18 years and then treated shabbily during a brief reconciliation can be said to forfeit the moral claim to share in his father’s estate by abandoning any further effort to establish a relationship. The fault in this sad story lies with the father and in my opinion, the onus to seek further reconciliation was on his shoulders. The testator gave the appellant virtually nothing in an emotional material way; the will was his last opportunity to do right by his son.”

McMain v Lebalc 2013 BCSC 891 also involved a testator who through no fault of his son had little contact and no relationship with his son for the 20 years prior to his death, and to disinherited his son is a result of that estrangement.

The court in McMain stated that in the circumstances of this case,” the plaintiff is a strong moral claim to share of the of the testator’s estate. The plaintiff had come to the conclusion that his father did not love them and wanted nothing to do with them. I do not blame him. The testator did almost nothing to lead them to think otherwise. It was the only rational conclusion for him to have drawn from a lifetime of experience.”

Passive-Aggressive Behaviour

Passive-aggressive people are frequently seen in estate litigation and family law matters.

People such as parents or partners who display passive-aggressive behavior have a hard time expressing their feelings verbally. This results in the suppression of any negative emotions they may experience. Instead of expressing negative emotions verbally, they project those feelings in their behaviors toward a spouse or child.

What Is Passive Aggression?

Passive aggression is behavior that is indirectly aggressive rather than directly aggressive. Passive-aggressive people regularly exhibit resistance to requests or demands from family and other individuals often by procrastinating, expressing sullenness, or acting stubborn.

Manifestations of Passive-Aggression

Passive-aggressive behavior won’t manifest in a punch to the face, but covert anger can cause you to feel as if you’ve been kicked in the gut. People who exhibit this behavior show their anger by withholding something they know you want, through procrastination, stubbornness, and obstructionism. “Passive-aggressive people act passive, but are covertly aggressive,”

When they reach a point where they no longer want to go along with the status quo that has been set over the years, they will become defiant in their own non-confrontational way. That is when the disconnection and loss of emotional intimacy is most felt by those married to a passive-aggressive spouse or parent.

Emotional Alienation

Passive-aggressive people are pretty good at showing up and meeting needs during good times, but not so much during the bad times.

Their fear of conflict coupled with their fear of forming emotional connections keeps them from being a fully engaged partner. “Passive-aggressive people are generally codependent, and like codependents, suffer from shame and low self-esteem,”

They can form an intimate connection up to a certain point. They can be self-sacrificing within limits. They can make an emotional investment to a degree.

1. During an argument, a passive-aggressive person will claim that the other party is overreacting or too aggressive. In the heat of the moment, it is completely normal, healthy even, to be expressive and show emotions. These are traits that they themselves cannot understand, much less demonstrate. They may not see the exercise as a way to solve a problem—only to deepen one; some may even take it as a personal attack. Their refusal to engage in conflict leaves the other party feeling lonely and responsible for all the marital problems. “They don’t express their anger openly

2. The more expressive and emotional their partner/parent becomes, the calmer and more logical the passive-aggressive person appears to become. This is a mechanism to once again avoid conflict—the “logic” they employ is relative to the situation and does not reflect any mature emotional intelligence. .

3. The passive-aggressive person retreats completely and their partner/child is left to pick up the pieces. Nothing ever gets resolved, and such behavior sends a clear message that they are unwilling to meet halfway in the marriage. This feeling for the spouse or child is comparable to rejection, but the passive-aggressive partner/parent doesn’t see it that way. They still love their partner/parent , but will forget what that means when they begin to feel threatened, thus starting the chain reaction of conflict-avoidance, emotional distance, and long-term relationship woes.

The Pay-Off

There is a twisted logic at play behind someone’s need to remain calm and logical during times of conflict. They fear rejection, and by engaging and sharing their emotions during conflict, they feel this will trigger a rejection by someone they love. The thought of anyone being upset with them is unsettling, and when that person is their betrothed, they see it as emotional destruction.

The more they refuse to engage, the more effort their partner/child puts into their interactions together. In their mind, the more you try, the more you admire and love them, and so they will not see this situation as negative. Unfortunately, this leads to an emotional disconnect that cannot be bridged until their passive-aggressive behavior is addressed and amended.

S. 58 WESA Refused

The curative provisions of section 58 WESA were declined in De Bon estate 2021 BCSC 505 Van where the court refused to vary a January 2012 will that the deceased referred to in six subsequent letters that purported to vary the 2012 will in various degrees.

Many of the subsequent documents referred to as “ instructions to assist and provide guidance to the executor” of the estate, or “ to whom it may concern”, were contradictory with respect to what part of the bequest was going to be distributed to which individual and at what time.

The court was satisfied that the documents were created by the deceased, although not all were signed by him, but were clearly prepared in his handwriting. The deceased also made arrangements for the documents to be delivered to his executor.

Most importantly, the court found that at no time was their language in any of the documents that provided for a revocation of the 2012 will.

The deceased was familiar with the preparation of wills, as he had prepared and had delivered to the wills registry six notices of filing of early earlier versions of a will, all prior to the 2012 will.

The court found on a balance of probabilities that the provisions of the 2012 will remained unaffected by the subsequent letters and notations and none of them purported to be a will dealing with intentions of someone who was well aware of the statutory elements a will must contain
Accordingly, the court found that the notes did not contain the testamentary intentions of the deceased.

THE LAW

In the Estate of Palmer, 2017 BCSC 1430, Justice Kent summarized the analysis required pursuant to s. 58 of WESA as follows;

27. The recent case of Estate of Young, 2015 BCSC 182, describes the legal framework applicable to s. 58 of WESA and the curing of “deficiencies” related to the making or alteration of a will. The history and intent of the legislation, including the case law in other jurisdictions addressing similar provisions, is set out in paras. 16–33 of that decision and will not be repeated here.

The law is summarized in paras. 34–37 of the decision and can be paraphrased as follows:

• the courts’ curative power with respect to non-compliant testamentary documents is inevitably and intensely fact-sensitive;

• the first threshold issue is whether the document in question is authentic;

• the second, and core, issue is whether the non-compliant document represents the deceased’s testamentary intentions;

• a testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death. Rather, the document must record a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death;

• the burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is the balance of probabilities;

• factors relevant to establishing the existence of a fixed and final testamentary intention may include the presence of the deceased’s signature, the deceased’s handwriting, witness signatures, revocation of previous wills, funeral arrangements, specific bequests and the title of the document; and

• generally speaking, the further a document departs from the formal validity requirements of the legislation, the harder it may be for the court to find that it embodies the deceased’s testamentary intention.

Cohabitation Agreement Upheld: S. 93 Family Law Act

In Hudema v Moore 2021 BCSC 587 the parties signed a cohabitation agreement between themselves that while they cohabited, the relationship would NOT be defined as marriage like, the court reviewed S. 93 Family law act and upheld the agreement.

The male partner had brought an action under section 93 (3) and 93 (5) of the Family Law Act based on unfairness and misrepresentation of the “true” purpose of the agreement.

The court held that the Agreement was not substantively unfair, and there was no basis to set it aside under s. 93(5) of the FLA

S. 93 Family Law Act

(3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

(a)a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;
(b)a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;
(c)a spouse did not understand the nature or consequences of the agreement;
(d)other circumstances that would, under the common law, cause all or part of a contract to be voidable.

(4)The Supreme Court may decline to act under subsection (3) if, on consideration of all of the evidence, the Supreme Court would not replace the agreement with an order that is substantially different from the terms set out in the agreement.

(5)Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

(a)the length of time that has passed since the agreement was made;

(b)the intention of the spouses, in making the agreement, to achieve certainty;

(c)the degree to which the spouses relied on the terms of the agreement.

Mr. Hudema voluntarily chose to sign the Agreement and was not coerced into doing so. While there was no certificate of independent advice signed, Mr. Hudema did have an opportunity to consult with a lawyer before signing. His decision to sign the Agreement was an informed one.

The court concluded there was no procedural unfairness in the process by which the Agreement was signed, and no basis to set aside the Agreement, in whole or part, on any of the grounds listed in s. 93(3) of the FLA.

Unfairness

Mr. Hudema alternatively argues that the Agreement should be set aside pursuant to s. 93(5) because it is significantly unfair in its terms. The issue of whether the terms of the Agreement are significantly unfair turns on a consideration of the factors listed in s. 93(5)(a)-(c) of the FLA, including the length of time that has elapsed, the intentions of the spouses in making the agreement, and their reliance on the terms of the Agreement.

This is not a case where circumstances have changed since the making of the Agreement such as to undermine the parties’ intentions in signing it. The parties’ relationship ended just over a year after the signing of the Agreement.

There is no evidence that their financial circumstances substantially changed over the course of that year. Mr. Hudema simply regrets his agreement and wants to be released from it.

Promises and Reliance: Proprietary Estoppel

Khela v Clarke 2021 BCSC 503 examined promises made and reliance thereon which may give rise to a claim for proprietary estoppel which is an equitable doctrine that may form the basis of a cause of action for claimed interests in land, in the absence of an enforceable contractual relationship with the defendant.

Lord Denning M.R.’s judgment in Crabb v. Arun District Council, [1975] 3 All E.R. 865 at 871 (C.A.), as setting out the basis for proprietary estoppel:

The basis of this proprietary estoppel – as indeed of promissory estoppel – is the interposition of equity. Equity comes in, true to form, to mitigate the rigours of strict law. The early cases did not speak of it as “estoppel”. They spoke of it as “raising an equity”. If I may expand that, Lord Cairns said in Hughes v. Metropolitan Railway Co [(1877) 2 App Cas 439 at 448, [1874-1880] All E.R. Rep 187 at 191]: “… it is the first principle upon which all Courts of Equity proceed …” that it will prevent a person from insisting on his strict legal rights – whether arising under a contract, or on his title deeds, or by statute – when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties. What then are the dealings which will preclude him from insisting on his strict legal rights? …

Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights – knowing or intending that the other will act on that belief – and he does so act, that again will raise an equity in favour of the other, and it is for a court of equity to say in what way the equity may be satisfied. The cases show that this equity does not depend on agreement but on words or conduct….

The doctrine of proprietary estoppel was considered by the Supreme Court of Canada in Cowper-Smith v. Morgan, 2017 SCC 61 [Cowper-Smith].

At paras. 15–22 of Cowper-Smith, Chief Justice McLachlin stated the law of proprietary estoppel in Canada as follows:

[15] An equity arises when:

(1) a representation or assurance is made to the claimant, on the basis of which the claimant expects that he will enjoy some right or benefit over property;

(2) the claimant relies on that expectation by doing or refraining from doing something, and his reliance is reasonable in all the circumstances;

and (3) the claimant suffers a detriment as a result of his reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on her word:

The representation or assurance may be express or implied: see Wolff v. Canada (Attorney General), 2017 BCCA 30, 95 B.C.L.R. (5th) 15, at para. 21;

An inchoate equity arises at the time of detrimental reliance on a representation or assurance. It is not necessary to determine, in this case, whether this equity is personal or proprietary in nature.

When the party responsible for the representation or assurance possesses an interest in the property sufficient to fulfill the claimant’s expectation, proprietary estoppel may give effect to the equity by making the representation or assurance binding.

Proprietary estoppel protects the equity, which in turn protects the claimant’s reasonable reliance:

Like other estoppels, proprietary estoppel avoids the unfairness or injustice that would result to one party if the other were permitted to break her word and insist on her strict legal rights

When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.

Where protecting the equity of the case may demand the recognition of “new rights and interests … in or over land” (Crabb v. Arun District Council, [1975] 3 All E.R. 865 (C.A.), at p. 871, per Lord Denning M.R.), proprietary estoppel can do what other estoppels cannot – it can found a cause of action: see MacDougall, at p. 424; McGhee, at pp. 330-33. Where the ingredients for a proprietary estoppel are present, the court must determine whether it is appropriate to satisfy the equity by recognizing the modification or creation of property rights “in situations where there is want of consideration or of writing”: Anger & Honsberger Law of Real Property (3rd ed. (loose-leaf)), by A. W. La Forest, at p. 28-3.

It has commonly been understood in Canada that proprietary estoppel is concerned with interests in land: Delane Industry Co. v. PCI Properties Corp., 2014 BCCA 285, 359 B.C.A.C. 61, at para. 49; f or transfer of rights to land”:

The British Columbia Court of Appeal has acknowledged the question of whether proprietary estoppel “also extends to other proprietary rights”, although this was not at issue in the case before it: Sabey, at para. 32. The English courts have gone much further, allowing proprietary estoppel claims in relation to chattels, insurance policies, intellectual property rights, commercial assets, and other forms of property: see S. Wilken and K. Ghaly, The Law of Waiver, Variation, and Estoppel (3rd ed. 2012), at pp. 263-64; MacDougall, at pp. 452-53; see also Thorner, at paras. 48 and 66, per Lord Walker, and para. 104, per Lord Neuberger.