Broken Promises and Reliance Thereon

Broken Promises and Reliance Thereon

Many estate disputes arise out of alleged “broken promises” to be provided for after death in a certain agreed manner concerning real property in the estate of the deceased that were relied and acted upon by the disappointed beneficiary. Such a claim arises under the equitable law of proprietary estoppel.

A “classic” example of proprietary estoppel occurred in Linde v Linde 2019 BCSC 1586 where the parents promised to provide the family farm in their estates to a son who worked the farm for fifty years for little or no wages and restricted his career paths based on repeated assurances and expectations that he would inherit the farm on his parent’s death.

The court set aside a transfer of the land to a third party after a falling out with the son based on the equitable principles of proprietary estoppel.The law was further clarified by the decision of Cowper-Smith v Morgan 2017 SCC 61, that many of those broken promises that were relied upon may be legally enforceable through the law of proprietary estoppel.

The Broken Promise: Facts

The facts of the leading proprietary estoppel case Cowper-Smith v Morgan are interesting and perhaps even “common”. The promise made by the sister and relied upon by her brother is a scenario that might very well be reasonably agreed upon between siblings.

An elderly mother had three children: two adult sons, N and M, and an adult daughter, G.

In 2001, the mother made a Declaration of Trust, transferring her house and other assets into her own and the daughters names in joint tenancy, and made a will naming her executrix, trustee and beneficiary of half of estate, with balance to the sons “ if the daughter saw fit”.

In 2007, son M moved from England to look after their mother on his sister’s assurance that she would sell him her one-third interest in the house.

M looked after his mother until her death in 2010.

The sister took no steps to divide the estate as per the promise made by her to her brother who cared for their mother for three years, so he brought a successful court action in the Supreme Court of Canada that granted orders declaring that the daughter held the mother’s home and investments in trust for the estate and that brother M was entitled to purchase her one-third interest in the home, and for an order distributing the home and investments in accordance with the mother’s 2002 will.

The trial judge held that M acted to his detriment in moving from England to look after his mother, relying on his sister’s agreement to his conditions for the move, and that, in doing so, M acted reasonably. The Trial judge also held that the brother’s right to purchase the daughter’s one-third interest in house was the minimum required to satisfy equity.

The Supreme Court of Canada agreed with the trial judge, finding inter alia that reasonableness is circumstantial, and it would be out of step with equity’s purpose to make a hard rule that reliance on a promise by party with no present interest in property can never be reasonable.

Of legal note, the daughter did not own any interest in the estate at the time of the brother’s reliance yet this was not barrier to success of proprietary estoppel claim . As soon as the daughter received interest in property, promissory estoppel attached.

The principles that can be derived from Cowper-Smith are:

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 or her reliance is reasonable in all the circumstances;
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 his or her word.

The representation or assurance may be express or implied. An equity that is under crystallized arises at the time of detrimental reliance on a representation or assurance.

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.

The Remedy

Where a claimant has established proprietary estoppel, the court has considerable discretion in crafting a remedy that suits the circumstances.

The claimant who establishes the need for proprietary estoppel is entitled only to the minimum relief necessary to satisfy the equity in his favor, and cannot obtain more than he expected.

There must be a proportionality between the expectation and the detriment. Estoppel claims concern promises which, since they are unsupported by consideration, are initially revocable.

Other Fact Situations

Proprietary estoppel claims need not be limited in their application to estate claims-there is a myriad of factual situations related to real property where promises are made and a person acts on the promises to his or her detriment. Equity arises to enforce the agreement through the application of promissory estoppel.

A claim for promissory estoppel was rejected in Burge v Emmonds Estate 2017 BCSC 2437. The dispute was the interpretation of a mediation agreement and whether it created an easement.

The Court in Burge stated:

The principles of promissory estoppel are well settled. The petitioners must establish that the respondents have, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the petitioners must establish that, in reliance on the representation, they acted on it or in some way changed their position: Maracle para. 13.

76 In order to prove proprietary estoppel, the petitioners must prove four things:

(1) that the claim is brought in a property context;
(2) that the respondents made a representation to the petitioners that an easement would be granted;
(3) that the petitioners reasonably relied on that representation; and
(4) that it would be unconscionable and unjust in all the circumstances for the respondents to go back on the assumption they allowed the petitioners to make:

The claimant must demonstrate why it would be unconscionable or unfair for the other party to be allowed to rely on and enforce its legal rights. In that regard, then, it would “rarely, if ever, be unconscionable to insist on strict legal rights” in the absence of any detriment or prejudice to the claimant: Thus, the claimant typically must demonstrate that it will suffer some detriment if the other party is allowed to rely on its strict legal rights.


Not all promises made by a testator to provide for a claimant are enforceable. as they must relate to real property.

It is the promisee’s detrimental reliance on the promise which makes it irrevocable. Once that occurs there is simply no question of the promisor changing his or her mind.

The detriment need not consist of expenditure of money or other quantifiable financial detriment, so long as it is something substantial.

Equity and Clean Hands

Kim v Choi 2019 BCSC 437 involved a plaintiff seeking the equitable remedy of restitution against unscrupulous immigration consultants and discussed the necessity of coming to court with “clean hands” based on the legal doctrine of “ex turpi causa”.

Closely related to ”clean hands”, the doctrine of “ ex turpi causa non oritur action” which means no cause of action will arise from a base cause. The law presumptively will not lend its assistance to a person who is tainted by illegality.

Traditionally, the doctrine has been applied rigidly, but that approach in recent years has been relaxed and the public policy analysis now requires a balancing test. That is not to say that the court will likely provide relief for an aggrieved party to an illegal agreement.

In JTL v RGL 2010 BCSC 1233 at paragraphs 113 – 116 the court reviewed the rationale for “ex turpi causa” and stated that the doctrine rested on the need to preserve the integrity of the judicial system.

The court pose the practical question as whether it would be manifestly unacceptable to fair-minded or right-thinking people that a court should lend assistance to a plaintiff who has defied the law

The court continued that the doctrine was justified were allowing the plaintiff’s claim would introduce inconsistency into the fabric of the law either by permitting the plaintiff to permit from a legal or wrongful act or evade the penalty prescribed by criminal law . Hall v Hebert (1933) 2 SCR 159.

In Daemore v Von Windheim 2011 BCSC 1523, the court refused to grant restitution where one party has secured an unjust windfall acquired through illegal activity.

The facts in that case are interesting. The parties were married and had for years engaged in criminal activities. The wife and specialized in credit card fraud, mortgage fraud and money laundering, whereas the husband preferred to involve himself in prostitution and drug trafficking.

The court held that even if there was a windfall or unjust enrichment, those considerations did not outweigh the parties unlawful conduct.

The Daemore comments are helpful, and confirming the modern approach of providing some discretion as to whether the doctrine of ex turpi caqusa should be invoked. That discretion depends on the particular circumstances.

The balancing exercise to Maine statutory policy against the desire to prevent a windfall or unjust enrichment claim was illustrated in Tsoi v Lai 2012 BCSC 1082 where the court held that the concerns of a windfall or unjust enrichment overrode his concern about illegality.

In Tsoi the plaintiff sought to recover monies that he had advanced to the defendant, who operated a gambling business, and legally loaned money to his gamblers at exorbitant interest rates. That type of business was illegal under the criminal code.

Tracing Assets

Tracing Assets | Disinherited Vancouver Estate Litigation

The classic statement of law relating to the process of tracing assets is found in the decision of the Ontario High Court of Justice in McTaggart v Boffo (1976) 10 OR (2d) 733 at 749-750:

“The general principle for the tracing of trust funds is found in Pettit, Equity and the Law of Trusts :

Whenever there is an initial fiduciary relationship, the beneficial owner of an equitable proprietary interest in property can trace it into the hands of anyone holding the property, except a bona fide purchaser for value without notice who is title is as usual inviable

Tracing is only possible so long as the fund can be followed in a true sense ie so long as, whether mixture and mix, it can be located and identified. It presupposes the continued existence of the money either as a separate fund or as part of a mixed fund or as latent in property acquired by the means of such a fun. Simply put, two things will absolutely prevent the tracing of trust monies:

a) If, on the fact of an individual case, such continued existence of the identifiable trust fund is not established, equity is helpless to trace it;

b) The chain for tracing is also broken with the trust fund either in its initial form or converted form has found its way into the hands of a third person purchaser for value without notice.

This statement has been cited with approval in the decision of the British Columbia Court of Appeal in Tracy v Instaloons Financial Solutions Centres (BC) ltd 2010 BCCA 357 at para. 42.

The ability to trace assets can only be a matter of consequence with a wrongdoer is unable to meet his obligations are worthy asset that is the subject matter of the legal proceedings is of personal importance to the victim.

The decision in McTaggart v Boffo identifies two categories of litigants that are adverse and interest to a claimant:

1. The wrongdoers creditors, who otherwise have the right to share in the proceeds of the wrongdoers assets, hence the need to determine whether the acid can be said to be truly the property of the victim;

2. third-party purchasers at arms length in good faith of acquired the asset from the wrongdoer without notice that the acid in truth belongs to another person.

The decision in McTaggart refers to the tracing of trust funds because the fundamental concept underlying this remedy is that it is aimed at achieving a return of funds /assets wrongfully converted.

If a person steals/converts an item of personal property that person may then be compelled to return it to its rightful owner; and that circumstance, equity need not intervene through tracing since the court merely recognizes and declares the victims property right.

However if the wrongdoer converts an asset and then sells or assigns it to another person in exchange for valuable consideration, tracing then becomes available assuming that this consideration can be followed in a true sense because it can be located and identified.

Treat the tracing process is often complicated by circumstances such as co-mingling into blended funds that may fall into the following broad categories:

1. Co-mingled funds comprised of funds/assets belonging to both the trustee/wrongdoer and to the victim;
2. co-mingled funds comprised of funds obtained from two or more victims as in the case of investment schemes
3. co-mingled funds comprised of funds obtained from two or more victims blended with the wrongdoers own funds.

The requirement that the converted asset can be followed in a true sense because it can be located and identified astringent, even in the context of an equitable and discretionary remedy, because of the injustice be following up on the wrongdoers other creditors were this cannot be proven.

Tracy v Instaloons made the point that the right to trace is not in itself a discretionary remedy. That case involved victims of a criminal scheme of charging interested a criminal rate, and the victim sought to recover the legal charges they had actually paid to the defendant. The Court of Appeal confirmed that once an equitable proprietary right has been established, the holder of that proprietary right can then traced the subject matter of the right farther up the transactional chain and even into commingled accounts.

The court stated that it may be difficult to identify the funds or other property and to which the claim charges of being transformed or with which they have been mingled; and the process will come to a halt in certain conditions, including were the balance in an account is fallen below the amount being traced.

The “In Law Suite” (Unjust Enrichment)

The "In Law Suite" - Unjust Enrichment

A common source of estate litigation is the contribution of funds towards an “ in law suite”, that ultimately does not work out over time, and the in-laws sue to recover the monies that they contributed to their child, and his or her spouse’s home. Typically the agreement is that the parent would be allowed to live in the home for life in consideration for the contribution of funds for the renovation.

This factual scenario occurred in MacKinnon v. Donauer 2017 BCCA 437 , where the mother “in-law” brought a claim in resulting trust and unjust enrichment for the sum of $150,000 contributed to her daughter and son-in-law for the purchase of a new house containing a basement in law suite.
The agreement between the parties was that the mother could live in the suite rent-free for as long as she wished. After the expiration of nine years the relationship deteriorated and the mother-in-law moved out.

The mother-in-law brought court action for the $150,000 that she had invested in the property and sought a declaration of entitlement to a proportionate equitable interest therein, and sale, or a similar remedy for unjust enrichment.

The trial judge dismissed both claims, but the Court of Appeal allowed the claim of unjust enrichment and ordered the parties to agree on a sum of money or to return to court.

Essentially, the Court of Appeal allowed the mother-in-law’s claim to succeed on the basis of unjust enrichment, holding that the family arrangement constituted a juristic reason for the benefit received by the defendant children.

On an objective basis it was not reasonable for the defendants to retain the entire benefit of the plaintiff’s contribution.

The court ordered that a monetary judgment in an amount to be determined by the court below was appropriate, based on the Supreme Court of Canada decision of Nishi v. Rascal trucking 2013 SCC

The appeal court stated that in normal circumstances, the court would calculate a monetary judgment with reference to the mother-in-law’s life expectancy when she moved in, and would multiply 29% of the fair market value of the house at the date of trial by a fraction the denominator of which would be the number of years the children could have expected the mother-in-law to be in the house from the date when she moved in, and the numerator of which would be that number 9. The court would then adjust for contingencies arising on the evidence that was before the court at trial, including the contingency she would have left the suite during her lifetime for health reasons for example.

The court largely followed the English Court of Appeal case of Hussey v. palmer (1972) EWCA CIv.1, 1 WLR 1286 (CA), which had similar facts.

In the Hussey decision, a woman well over 70 years of age, had a daughter who was married to Mr. Palmer. When Mrs. Hussey had to sell her house because it was condemned, Mr. & Mrs. Palmer invited her to come to their house and live with them. Since it was too small Mrs. Hussey contributed monies for an extension which included a bedroom. After 15 months they could not live in harmony any longer and Mrs. Hussey went and lived elsewhere. Finding she was in need of money she eventually made a claim against her daughter and son-in-law, claiming she had loaned the money, while the children argued that she had made a gift.

The English Court of Appeal allowed her appeal on the basis that the claim was more in the nature of a constructive trust, as opposed to a resulting trust, and by whatever name it is described, it is a trust imposed by law, whenever justice and good conscience require it.

The court cited various cases in which a trust has been imputed or imposed for the benefit of a person who has contributed towards the purchase of a house in the absence of an agreement between the parties, and in the absence of any evidence of an intention to create a trust. The court found this case fell within the principles of those cases, stating it would be “entirely against conscience” if Mr. Palmer were to retain beneficial ownership of the entire house and not allow Mrs. Hussey any interest in it or charge upon it.

The court also followed the decision of Campbell v. McClelland (1995) 57 A CWS 663 (BCSC) where a grandmother moved into her grandchildren’s home, and contributed funds totaling $60,000 to pay the mortgage and to renovate a basement suite, in the expectation that she would have a permanent home there. That relationship also did not work out, and the grandmother sued for the return of her funds and succeeded.

The court found that there was no juristic reason for the enrichment of the grandchildren, and the corresponding deprivation of the grandmother had been shown, thus making a claim for constructive trust.

The court in Campbell stated:

“The test is an objective one. Objectively, it cannot be said that there was a legitimate expectation that the McClelland should benefit financially to Mrs. Campbell’s detriment. I do not accept that the parties expectations were that Mrs. Campbell would relinquish forever a major portion of her limited resources with no expectation that the funds should be repaid her that she would receive something of equal value to her, namely a secure and permanent home.”

Proprietary Estoppel (SCC)

Proprietary Estoppel (SCC)

In a significant win for disinherited individuals who were promised to inherit an asset, the Supreme Court of Canada in Cowper-Smith-Smith v. Morgan , 2017 SCC 61 reversed the BC Court of Appeal and allowed a claim for proprietary estoppel.


The trial judge had found that a non-owner of property, who gave assurances that were relied upon by the plaintiff, with respect to her future intentions, based on the assumption that she would inherit from her mother, the owner, was obligated I equity to carry out the effect of that promise.
The deceased mother transferred her house into joint tenancy with her daughter in 2001.
In 2002. The mother made a will, leaving her estate equally to her three children.

The mother’s investment accounts over several years were transferred into joint names with the daughter.

A declaration of trust for the house in bank accounts was signed in 2001 that stated that the daughter would be entitled absolutely to those assets upon the death of the mother.

Despite the fact that the trust declaration in joint ownership, if valid assured that the estate would be virtually devoid of assets, the mother also executed a new will that appointed the sister as executor and provided that the estate would be divided equally among the three children.

The defendant sister told her siblings that the house was put into her name only, so that she could assist in their mother’s affairs and that the asset would all eventually go to her mother’s estate.

The defendant daughter promised to transfer a one third share in the house in order to lure him back to Canada in order to assist his sister in caring for his mother.

The trial judge allowed the claim of the brother on the basis that he relied upon the promise made by his sister when he agreed to return to Canada to take care of his mother when the sister reneged on her promise to transfer to him her one third of the house, even though she did not own the house when she promised to transfer the brother one third of it.

The Court of Appeal reversed the trial judge decision on the basis that the sister did not own the property when she promised to transfer it to her brother.
The Supreme Court of Canada reversed the appeal court and allowed the claim of the brother to succeed on the basis of proprietary estoppel.



To establish proprietary estoppel, one must first establish an equity of the kind that proprietary estoppel protects.

An equity arises when:

  1. A representation or assurances is made to the claimant, on the basis of which the claimant expects that he or she will enjoy some right or benefit over property;
  2. The claimant relies on that expectation by doing or refraining from doing something and his or her reliance is reasonable in all of the circumstances, and;
  3. The claimant suffers a detriment a s a result of his or her reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on his or her word and insist on his or her strict legal rights.

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

It is not necessary that the party responsible for the expectation own an interest in the property at the time of the claimant’s reliance-when the party responsible for the expectation has or acquires sufficient interest in the property, proprietary estoppel will attached to that interest and protect the equity.

Whether a claimant’s reliance was reasonable in the circumstances, is a question of mixed law and fact. A trial judge’s determination of this point, is absent palpable and overriding error, entitled to deference.

When a claimant has established proprietary estoppel, the court has considerable discretion in crafting a remedy that suits the circumstances, an appellate court should not interfere unless the trial judge’s decision evinces an error in principle, or is plainly wrong.

A claimant to establish is the need for proprietary estoppel is entitled only to the minimum relief necessary to satisfy the equity in his or her favor, and cannot obtain more than he or she expected.

Further, there must be a proportionality between the remedy, and the detriment.

Courts of equity must strike a balance between vindicating of the claimant’s subjective expectations and correcting that detriment.

Here, both the brother and a sister had clearly understood for well over a decade that their mother’s estate, including the family home, would be divided equally between her three children upon her death.

It was a sufficiently certain that the sister would inherit a one third interest in the property for her assurance to be taken seriously as one in which the brother could rely.

An equity arose in favor of the brother when he reasonably relied to his detriment on the expectation that he would be able to acquire his mother’s one third interest in the family home.

The equity could not have been protected by proprietary estoppel at the time it arose, because the sister did not then own an interest in the property.
However, proprietary estoppel did attach to the sisters interest as soon as she obtained it from the estate.

The sister as executor, could be ordered to transfer a one third interest in the property to each of the estate beneficiaries, so that her promise to her mother may be fulfilled.

Quantum Meruit (Unjust Enrichment) For Care-Worker

Quantum Meruit (Unjust Enrichment) For Care-Worker

What is Quantum Meruit?

Tarantino v Galvano 2017 ONSC 3535 awarded the sum of $273,000 for caregiving services provided under the basis of a quantum meruit claim, namely a reasonable fee for services provided.

A quantum meruit claim is simply one of the established categories of unjust enrichment claims Kerr v Baranow 2011 SCC 10 at paragraph 74.

It is a claim that there has been an unjust enrichment, and that the remedy should be a monetary remedy calculated on the basis of fee for services rather than a proprietary remedy such as a constructive trust imposed over specific property.

Quantum meruit typically occurs when valuable services are rendered without the existence of a contract, and it is obvious those services were not intended to be gratuitous. The law will then impose an obligation to pay for the value of the services without implying a contract are necessarily require the establishment of an employment relationship. A party can make a claim for quantum meruit compensation against the estate of a deceased person for services rendered to the deceased person during their lifetime – Deglman v Guaranty Trust Co. of Canada 1954 SCR 725.


3 Elements of Unjust Enrichment

As quantum meruit is a form of unjust enrichment, a plaintiff alleging unjust enrichment must establish three elements:

  1. And enrichment of or benefit to the defendant;
  2. a corresponding deprivation of the plaintiff;
  3. the absence of a juristic ( legal) reason for the enrichment

A party seeking quantum meruit compensation should provide evidence establishing the value of the services rendered. Lata v Rush 2012 ONSC 4543.

Such evidence was provided in the Tarantino case that the average for general personal support worker in general attendant care was $24 per hour, and a registered nurse $55 per hour. The evidence was that an average pay for personal support workers was $15.40 per hour, which the court accepted and multiplied out over five years of care to total $273,000.

“Good Conscience” Constructive Trusts

"Good Conscience" Constructive Trusts

The Ontario Court of Appeal in Moore v Sweet 2017 ONCA 182 discussed the concept of constructive trusts that had been pronounced by the Supreme Court of Canada in the decision Soulos v. Korkontzillas 1997 2 SCR 217 in rejecting the claim of a named beneficiary of an insurance policy during her 20 year marriage to the deceased, who after separating from her, irrevocably named his new partner of 13 years as the beneficiary of the same insurance policy.

The wife  argued on appeal that she should remain the beneficiary of the insurance policy under the equitable principle of ” good conscience”, but the appeal court reversed the trial decision and held that she should be the beneficiary of the policy stating :

“There is nothing in the circumstances of this case that would provide the basis for a “good conscience” constructive trust when the facts do not support such a trust based on unjust enrichment or wrongful act, and it is therefore unnecessary to determine whether such a third category of remedial constructive trust continues to be available in view of the Supreme Court of Canada’s decision in Soulos v. Korkontzilas, [1997] 2 S.C.R. 217.”

The wife had not been made an irrevocable beneficiary designate which the insurance act treats as basically airtight and difficult to set aside.

Good Conscience” Constructive Trusts

100      There has been considerable debate in the jurisprudence and in academia about whether resort to the remedial constructive trust in Canada is now limited to two categories since the Supreme Court of Canada’s decision in Soulos — unjust enrichment and wrongful acts — thereby eliminating resort to a more elastic “good conscience” trust, i.e., one based on no more than a sense of fairness to the effect that it would be “against all good conscience” to deny a plaintiff recovery in the circumstances of a particular case. At the end of the day, Ms. Moore submits that good conscience is satisfied by giving effect to the oral agreement without which the Policy would not have continued to exist.1

101      It has long been accepted that equity is quintessential never-say-never terrain, and that concepts respecting its application develop with the times and to meet the needs of particular circumstances. This long-standing principle may work against establishing a completely closed set of categories as the foundation for imposing a remedial constructive trust.

102      At the same time, McLachlin J. was pretty clear in Soulos that, while a constructive trust “may be imposed where good conscience so requires” (para. 34), “[t]he situations which the judge may consider in deciding whether good conscience requires imposition of a constructive trust may be seen as falling into two general categories” (unjust enrichment and situations where property had been obtained by a wrongful act) (para. 36). It was her view that “[w]ithin these two broad categories, there is room for the law of constructive trust to develop and for greater precision to be attained, as time and experience may dictate” (para. 43). Rothstein J. re-affirmed this view in Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660, at paras. 144-145.

103      I do not think it is necessary to resolve this debate for purposes of this appeal.

104      Most of the authorities in which courts have been willing to override a beneficiary designation can be explained on the basis of an agreement between one of the claimants and the insured that removed the insured’s ability to designate a later beneficiary.2 As noted earlier, Shannon involved a separation agreement in which the insured undertook to name his first spouse as a beneficiary irrevocably. In Bielny, the separation agreement required the insured to name the children of the first marriage as irrevocable beneficiaries. In Fraser v. Fraser, the trial judge found on the facts that the terms of the separation agreement requiring the insured to maintain the plaintiff as beneficiary were tantamount to an irrevocable designation.

105      Whether these authorities need to be re-examined in light of Soulos, as suggested in some authorities — see, for example, Love v. Love, 2013 SKCA 31, 359 D.L.R. (4th) 504 — is not something that need be determined here. As I have concluded above, it was not open to the application judge on this record to hold that the oral agreement between the Moores constituted an equitable assignment, or that it was tantamount to an irrevocable beneficiary designation.

106      Absent those considerations, I do not see anything in the circumstances of this case that would place it in some other “good conscience” category not caught with the rubric of either wrongful act (not asserted here) or unjust enrichment. For that reason, I do not see the need to resolve the foregoing debate about whether Soulos has restricted the categories for imposing a remedial constructive trust to unjust enrichment or wrongful act or whether there remains some additional “good conscience” basis.

107      Simply because wrongful act is not asserted, and unjust enrichment is unsuccessful, does not mean that some other “good conscience” basis must exist on the facts. To engage in such an exercise, on this record at least, it seems to me, would undermine the rationale for creation of the juristic reason element in the first place.

Unjust Enrichment in Common Law Relationships

Unjust Enrichment in Common Law Relationships

The Ontario Court of Appeal in Reiter v Hollub 2017 ONCA 186 reviewed the law of unjust enrichment and dismissed a 6 year common law spouse’s claim that she should share in the increase in the property value of the matrimonial home owned by her male spouse .

The appeal Court reviewed the law of unjust enrichment and in particular the Supreme Court of Canada’s decision in Kerr v Barranow 2011 SCC 10.

  1. The appellant, Jessica Reiter, appeals from the dismissal of her application for an interest in the increase in equity of a home owned by the respondent, Tiar Hollub, which she shared during their six year common law relationship.
  2. Ms. Reiter advanced her claim on the basis of unjust enrichment. She argued that she had contributed to the $410,000 increase in the net value of the home over the course of the relationship. She relied on contributions she made to common living expenses and to the maintenance and repair of the residence. She also relied on the fact that she had given Mr. Hollub a one-time payment of $5,000 toward the mortgage.
  3. Ms. Reiter also took the position that her relationship with Mr. Hollub amounted to a joint family venture as defined in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269.
  4. The application judge held that Ms. Reiter was unable to establish a joint family venture to support the requested remedy. She found no evidence that would support a conclusion that Ms. Reiter’s contributions had led to an increase in the value of the property. The application judge also found that the evidence did not support a joint family venture as defined in Kerr v. Baranow. As to Ms. Reiter’s $5,000 payment toward the mortgage, the application judge held that although Mr. Hollub had been enriched to Ms. Reiter’s detriment as a result of this contribution, his retention of the payment was justified by the parties’ agreement to share living expenses.
  5. I see no reason to interfere with the application judge’s rejection of Ms. Reiter’s claim for a proprietary interest in the house. The application judge’s conclusions about the circumstances of Ms. Reiter’s contribution to expenses and about the nature of the relationship are entitled to deference. I would therefore dismiss that aspect of Ms. Reiter’s appeal. However, I would allow the appeal on the treatment of the $5,000 lump sum payment to Mr. Hollub.

In Kerr v. Baranow, at para. 31, Cromwell J. recognized that “[a]t the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain”. Since the Supreme Court’s 1980 decision in Pettkus v. Becker, [1980] 2 S.C.R. 834, unjust enrichment principles have been available to support claims made by domestic partners upon the breakdown of their relationship.

17      The test for unjust enrichment is well-settled. To establish unjust enrichment, the person advancing the claim must prove three things:

  1. An enrichment of or benefit to the defendant;
  2. A corresponding deprivation of the plaintiff; and
  3. The absence of a juristic reason for the enrichment.

18      There are two steps to identifying whether there is a juristic reason for the responding party to retain the benefit incurred. First, the court must consider whether the case falls within a pre-existing category of juristic reason, including a contract, a disposition of law, donative intent, and other valid common law, equitable or statutory obligations: Kerr, at para. 43. If a case falls outside one of these established categories, the reasonable expectations of the parties and public policy considerations become relevant in assessing whether recovery should be denied: Kerr, at para. 44.

19      In Kerr v. Baranow, at para. 46, the Supreme Court outlined two possible remedies where unjust enrichment is established — a monetary award or a proprietary award. The court counselled, at para. 47, that the first remedy to consider is always the monetary award and that, in most cases, a monetary award is sufficient to remedy the unjust enrichment.

20      To obtain a proprietary award, the person advancing the claim based on unjust enrichment must demonstrate that monetary damages are insufficient and that there is a sufficiently substantial and direct causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property: Kerr, at paras. 50-51. A minor or indirect contribution will not suffice.

21      The court held that there are two different approaches to valuation for a monetary award: Kerr, at para. 55. First, a monetary award may be based on a quantum meruit, value received or fee-for-services basis. Second, a monetary award may be based on a value survived basis. This is where the joint family venture analysis becomes relevant.

22      To receive a monetary award on a value survived basis, the claimant must show that there was a joint family venture and that there was a link between his or her contributions to the joint family venture and the accumulation of assets and/or wealth: Kerr, at para. 100. Whether there is a joint family venture is a question of fact to be assessed in light of all of the relevant circumstances, including the four factors noted above — mutual effort, economic integration, actual intent and priority of the family: Kerr, at para. 100.

23      Justice Cromwell was careful to note that cohabiting couples are not a homogenous group: Kerr, at para. 88. The analysis must therefore take into account the particular circumstances of each relationship. The emphasis should be on how the parties actually lived their lives, not on their ex post facto assertions or the court’s view of how they ought to have done so: Kerr, at para. 88.

24      While the four factors identified above are helpful to determine whether the parties were engaged in a joint family venture, there is no closed list of relevant factors: Kerr, at para. 89. The factors Cromwell J. suggested were not a checklist of conditions, but a useful approach to a global analysis of the evidence and examples of relevant factors that a court may take into account: Kerr, at para. 89.

Parent Money to Children: Gift or Loan?

Wills Variation Refused-Assets Passing Outside of Estate Sufficient

Dheenshaw v Gill 2017 BCSC 319 deals with an increasingly commonly litigation problem- the advancement of large sums of parents money to their children and the subsequent determination whether  the monies were a gift or a loan when matters go ” sideways”.

The court will look start at attempting to determine  the intention of the parties  when making the advancement of the monies which are usually made gratuitously.

There is  usually a presumption that the advancement of funds was not a gift and that the onus of proving a gift is on the recipient children, who must rebut the presumption that they hold the funds as a resulting trustees. The court will examine a number of criteria in analysing such a scenario.


In Beaverstock v. Beaverstock, 2011 BCCA 413, the Court addressed the correct approach to the resolution of a dispute about whether a gratuitous advance from a parent to an adult child is a loan or a gift. As the Court held at para. 9:

The correct approach to the resolution of this dispute is not in dispute. It is set out in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795. Whether the transfer was a loan or a gift depends on the actual intention of the appellant when she made the advance, which is a question of fact. As the advance was gratuitous, the onus was on the respondent to demonstrate that the appellant intended a gift, since equity presumes bargains, not gifts (para. 24). This equitable principle gives rise to a presumption the son received the money on a resulting trust, which is a rebuttable presumption of law. The trial judge was therefore required to presume the advance was not a gift and to determine whether the respondent had satisfied the burden of rebutting the presumption of resulting trust on a balance of probabilities (para. 44).

73      In Byrne v. Byrne, 2015 BCSC 318, the issue was whether bi-weekly payments of $1,000 made by the claimant’s father to a joint account held by the claimant and the respondent and used to pay for household expenses constituted a gift or loan. Mr. Justice Armstrong began his analysis at paras. 41 and 42:

[41] Payments from a parent to an adult child are generally not presumed to be gifts; they are presumed to form a resulting trust in which the parent keeps an interest in the property. However it is open to a party claiming the transfer is a gift to rebut the presumption of a resulting trust by providing evidence to that effect: Pecore v. Pecore . . .

[42] In Pecore, the Supreme Court of Canada addressed how the presumptions operate in the context of transfers from a parent to an adult child:

(a) the focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer . . .

(b) When the transferor’s intent is unavailable or unpersuasive, the presumptions of advancement (a gift) and resulting trust are useful guides and will apply . . .

(c) gifts from parents to independent adult children are not presumed to be gifts; rather the presumption of a resulting trust applies . . .

(d) there may be circumstances where a transfer between a parent and an adult child was intended to be a gift and it is open to the party claiming that the transfer is a gift to rebut the presumption of resulting trust by bringing evidence to support that claim . . .

(e) the burden on the party claiming a gift was made is proof on a balance of probabilities . . .

74      At para. 43, the court noted that in Kuo v. Chu, 2009 BCCA 405at para. 9, the Court of Appeal adopted the following factors from Locke v. Locke, 2000 BCSC 1300, as applicable to the question of whether a loan or a gift was intended:

(a) Whether there were any contemporaneous documents evidencing a loan;

(b) Whether the manner for repayment is specified;

(c) Whether there is security held for the loan;

(d) Whether there are advances to one child and not others, or advances of unequal amounts to various children;

(e) Whether there has been any demand for payment before the separation of the parties;

(f) Whether there has been any partial repayment; and,

(g) Whether there was any expectation, or likelihood, of repayment.

75      The Locke factors are items of circumstantial evidence relevant to the transferor’s actual intention. They are not exhaustive and are to be weighed by the trial judge, along with all of the other evidence, in order to determine the transferor’s actual intention as a matter of fact: Beaverstock at para. 11.

76      Whether the opposing spouse was aware of the transaction is not determinative of the question of whether a loan was made: Byrne at para. 47.

77      In Beaverstock, the Court held that the trial judge had erred in law by failing to begin his analysis with the presumption of resulting trust and in failing to make a finding concerning the appellant’s actual intention when she advanced the funds to her son.

78      In Savost’Yanova v. Chui, 2015 BCSC 516, where the husband’s father had advanced $60,000 to assist with the purchase of the matrimonial home, Mr. Justice Weatherill held that in determining the intent of the person of who advances money in a family context, the court must weigh all of the evidence to determine whether the presumption of resulting trust has been rebutted: Chui at para. 77.

79      At para. 75, the court adopted the following summary of the applicable legal principles:

[75] The law regarding whether a transfer made by a parent to an adult child is a loan or a gift was summed up by Madam Justice Brown in Hawley v. Paradis, 2008 BCSC 1255at para. 30, after a review of the applicable authorities:

[30] Based on the case law presented to me, I conclude:

1. that the presumption of advancement no longer applies between adult children and their parents;

2. that as between adult children and their parents, the presumption is a resulting trust when the parents make gratuitous transfers to children;

3. that the court must consider all of the evidence in determining whether the parent intended the transfer as a gift or a loan;

4. that the factors considered in Wiens and Locke will assist the court in determining whether the advance was a loan or a gift.

80      Here, I must determine whether the actual intention of the claimant’s mother was to make a gift or a loan. Because the advance was gratuitous, the claimant bears the onus of demonstrating that her mother intended a gift, “since equity presumes bargains, not gifts”. In determining the transferor’s intention, the court must take into account the Locke factors, along with all of the other evidence.



Laches was discussed and rejected by the court in Grewal v Khakh 2016 BCSC 2055, where the court quoted the Supreme Court of Canada:

52           In  M. (K.) v. M. (H.), , [1992] 3 S.C.R. 6, [1992] S.C.J. No. 85 (S.C.C.) at para. 98, where the court said:

A good discussion of the rule and of laches in general is found in Meagher, Gummow and Lehane, supra, at pp. 755-765, where the authors distill the doctrine in this manner, at p. 755:

It is a defence which requires that a defendant can successfully resist an equitable (although not a legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either

(a) acquiesced in the defendant’s conduct or

(b) caused the defendant to alter his position in reasonable reliance on the plaintiff’s acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb.

Thus there are two distinct branches to the laches doctrine, and either will suffice as a defence to a claim in equity. What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches under either of its two branches. Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine.