Cowper‑Smith v. Morgan

Cowper‑Smith v. Morgan
Collection
Supreme Court Judgments
Date
2017-12-14
Neutral citation
2017 SCC 61
Report
[2017] 2 SCR 754
Case number
37120
Judges
McLachlin, Beverley; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Wagner, Richard; Gascon, Clément; Côté, Suzanne; Brown, Russell; Rowe, Malcolm
On appeal from
British Columbia
Notes
SCC Case Information: 37120
Decision Content
SUPREME COURT OF CANADA
Citation: Cowper-Smith v. Morgan, 2017 SCC 61, [2017] 2 S.C.R. 754
Appeal Heard: May 26, 2017
Judgment Rendered: December 14, 2017
Docket: 37120
Between:
Max Wayne Cowper-Smith
Appellant
and
Gloria Lynn Morgan and Gloria Lynn Morgan Executor of the Will of the Late Elizabeth Flora Cowper-Smith, Deceased
Respondent
Coram: McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown and Rowe JJ.
Reasons for Judgment:
(paras. 1 to 60)
McLachlin C.J. (Abella, Moldaver, Karakatsanis, Wagner, Gascon and Rowe JJ. concurring)
Partially Concurring Reasons:
(paras. 61 to 72)
Brown J.
Partially Concurring Reasons:
(paras. 73 to 83)
Côté J.
Cowper-Smith v. Morgan, 2017 SCC 61, [2017] 2 S.C.R. 754
Max Wayne Cowper‑Smith Appellant
v.
Gloria Lynn Morgan and Gloria Lynn Morgan Executor of
the Will of the Late Elizabeth Flora Cowper‑Smith, Deceased Respondent
Indexed as: Cowper‑Smith v. Morgan
2017 SCC 61
File No.: 37120.
2017: May 26; 2017: December 14.
Present: McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown and Rowe JJ.
on appeal from the court of appeal for british columbia
Wills and estates — Wills — Property — Equity — Proprietary estoppel — Remedies — Claimant relying to his detriment on promises made by co‑beneficiary of their mother’s estate to transfer co‑beneficiary’s interest in property to claimant — Whether trial judge erred in concluding that proprietary estoppel operated to enforce promisor’s promise — Whether evidence supports trial judge’s conclusion that elements of proprietary estoppel were met — Whether promisor’s lack of ownership in property at time promise was made defeats claimant’s equitable claim — What is appropriate remedy.
As early as 1992, E and A made it clear that after their deaths, their property would be divided equally among their three children, G, M and N. After A’s death however, E’s estate planning changed dramatically: she transferred title to the family home in Victoria and all of her investments into joint ownership with G, indicating in a trust declaration that G would be entitled absolutely to those assets upon her death. Despite the fact that the trust declaration and joint ownership, if valid, assured that the estate would be virtually devoid of assets, E also executed a new will that appointed G as executor and provided that the estate would be divided equally among the three children.
In 2005, when E could no longer live on her own, M agreed to move back to Victoria to care for her, giving up his employment income, his cottage lease, his contacts with his children and his social life, but only after G agreed that M would be able to live in the family home permanently and eventually acquire G’s one‑third interest in the property. After E’s death, the trust declaration came to light and in 2011, G announced her plans to sell the family home, in which M was still living. M and N sought an order setting aside the trust declaration as the product of G’s undue influence over E and declaring that G held the property and investments in trust for E’s estate to be divided equally between the three children in accordance with E’s most recent will. They also claimed, on the basis of proprietary estoppel, that M was entitled to purchase G’s one‑third interest in the property. The brothers succeeded at trial, where the trial judge found that G had not rebutted the presumptions of undue influence and resulting trust, and declared that the property belonged to E’s estate. The Court of Appeal unanimously upheld the trial judge’s conclusions with respect to undue influence and resulting trust, but split on proprietary estoppel. The majority held that since G owned no interest in the property at the time that she made assurances to M, proprietary estoppel could not arise. M appealed on the issue of proprietary estoppel.
Held: The appeal should be allowed.
Per McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon and Rowe JJ.: The trial judge did not err in concluding that proprietary estoppel operates to enforce G’s promise. Since ownership at the time the representation or assurance was relied on is not a requirement of a proprietary estoppel claim, the fact that G did not have an interest in the property at the time M relied on her promise does not negate G’s obligation to keep her promise.
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 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 of 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 and insist on 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 attach 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.
Where a claimant has established proprietary estoppel, the court has considerable discretion in crafting a remedy that suits the circumstances, and an appellate court should not interfere unless the trial judge’s decision evinces an error in principle or is plainly wrong. However, a claimant who establishes the need for proprietary estoppel is entitled only to the minimum relief necessary to satisfy the equity in his favour, and cannot obtain more than he expected. Further, there must be a proportionality between the remedy and the detriment. Courts of equity must strike a balance between vindicating the claimant’s subjective expectations and correcting that detriment.
In the instant case, on the trial judge’s findings, both M and G had clearly understood for well over a decade that E’s estate, including the family home, would be divided equally between her three children upon her death. It was thus sufficiently certain that G would inherit a one‑third interest in the property for her assurance to be taken seriously as one on which M could rely. There is no basis on which to overturn the trial judge’s conclusion that M’s reliance was reasonable. An equity arose in M’s favour when he reasonably relied to his detriment on the expectation that he would be able to acquire G’s one‑third interest in the family home. That equity could not have been protected by proprietary estoppel at the time it arose, because G did not then own an interest in the property. However, proprietary estoppel will attach to G’s interest as soon as she obtains it from the estate. G, as executor, can be ordered to transfer a one‑third interest in the property to each of the estate beneficiaries so that her promise to M may be fulfilled. An in specie distribution of shares in the property is not contrary to E’s intent and this Court has the power to direct G to exercise her discretion as executor in a certain manner. With respect to remedy, the minimum necessary to satisfy the equity in M’s favour is an order entitling him to purchase G’s interest in the family home at its fair market value as of the approximate date on which he would reasonably have expected to be able to do so in the first place.
Per Brown J.: There is agreement with the majority that the trial judge did not err in allowing the proprietary estoppel claim, but disagreement regarding the appropriate remedy. An equity sufficient to ground a claim in proprietary estoppel may arise where the promisor does not in fact hold that right or benefit at the time of making the promise, but the equity arises only if and when the promisor obtains the right or benefit that was promised to the claimant, not at the moment of detrimental reliance. Where a promisor’s attainment of the promised right or benefit rests upon the satisfaction of a future contingency, no equity capable of being remedied through proprietary estoppel can arise until that contingency is satisfied. If the promisor does not hold the right or benefit at the time of the promise, an inchoate equity arises in favour of the claimant at the moment of the claimant’s detrimental reliance thereon, but before an equity capable of conferring a proprietary right can be shown to arise, the promisor must gain the promised right or benefit because the promisor cannot grant what he does not have. To qualify as an equity justifying the operation of proprietary estoppel, the equity must be proprietary, because it must be capable of compelling a promisor to relinquish a proprietary right which he or she actually holds.
In this case, the requisite equity will only arise from the moment that G holds the right or benefit that was the subject of her promise to M, that is, from the time this Court orders her to divide the property into equal one‑third interests and to deliver these to the beneficiaries of E’s estate. Therefore, the minimum necessary to satisfy the equity, once it arises, is to permit M to purchase G’s one‑third share of the property as of the date of this Court’s order.
Per Côté J.: There is agreement with the majority that a proprietary estoppel claim can arise even where a promisor had no ownership interest in the property at the time the promise was made and that a promisee’s reliance is not unreasonable, as a matter of law, solely because the promisor does not own the property at the time the promisee acts, to his or her detriment, in reliance on the promise. Nevertheless, a court cannot order an executor to distribute shares of an estate in a manner that disregards the testator’s express intent for the sole purpose of enabling a beneficiary to make good on her promise to a third party. This principle holds true even where that beneficiary also happens to serve as the estate’s executor.
In the instant case, this Court has no power to order G to exercise her executorial discretion in a particular manner. E’s last will was unambiguous in expressly vesting G with discretion in the administration of her estate and in entrusting her to decide the fate of the property in issue, including whether or not it should be sold. Compelling G to transfer shares of the property to the estate’s beneficiaries is to substitute the Court’s own judgment for that of G in determining how the property should be administered, effectively creating a specific bequest that E herself opted not to make. If G’s duties as executor are truly in conflict with her interests as a beneficiary such that there is a breach of fiduciary duty, the proper remedy is not to order an in specie distribution but to replace G as executor. However, if G is ordered to distribute the property in specie and compelled to sell her share to M, the sale price should be determined by the value of the property as of the date of this Court’s order.
Cases Cited
By McLachlin C.J.
Considered: Thorner v. Major, [2009] UKHL 18, [2009] 1 W.L.R. 776; referred to: Sabey v. von Hopffgarten Estate, 2014 BCCA 360, 378 D.L.R. (4th) 64; Clarke v. Johnson, 2014 ONCA 237, 371 D.L.R. (4th) 618; Idle-O Apartments Inc. v. Charlyn Investments Ltd., 2014 BCCA 451, [2015] 2 W.W.R. 243; Scholz v. Scholz, 2013 BCCA 309, 340 B.C.A.C. 151; Wolff v. Canada (Attorney General), 2017 BCCA 30, 95 B.C.L.R. (5th) 15; Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co., [1981] 1 All E.R. 897; Amalgamated Investment & Property Co. (In Liquidation) v. Texas Commerce International Bank Ltd., [1982] 1 Q.B. 84; Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53; Crabb v. Arun District Council, [1975] 3 All E.R. 865; Willmott v. Barber (1880), 15 Ch. D. 96; Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., [1970] S.C.R. 932; Sohio Petroleum Co. v. Weyburn Security Co., [1971] S.C.R. 81; Sykes v. Rosebery Parklands Development Society, 2011 BCCA 15, 330 D.L.R. (4th) 84; Erickson v. Jones, 2008 BCCA 379, 299 D.L.R. (4th) 465; Delane Industry Co. v. PCI Properties Corp., 2014 BCCA 285, 359 B.C.A.C. 61; Burgsteden v. Long, 2014 SKCA 115, 378 D.L.R. (4th) 562; Eberts v. Carleton Condominium Corp. No. 396 (2000), 136 O.A.C. 317; Bellton Farms Ltd. v. Campbell, 2016 NSCA 1, 394 D.L.R. (4th) 262; Wettstein v. Wettstein, 1992 CarswellBC 1421 (WL Can.); Waltons Stores (Interstate) Ltd. v. Maher (1988), 76 A.L.R. 513; Walton v. Walton, E.W.C.A., April 14, 1994; Gillett v. Holt, [2001] Ch. 210; Cobbe v. Yeoman’s Row Management Ltd., [2008] UKHL 55, [2008] 1 W.L.R. 1752; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Re Basham (deceased), [1987] 1 All E.R. 405; Watson v. Goldsbrough, [1986] 1 E.G.L.R. 265; Re Harris (1915), 22 D.L.R. 381; Gunn Estate, Re, 2010 PECA 13, 200 Nfld. & P.E.I.R. 197; Staub v. Staub Estate, 2003 ABCA 122, 226 D.L.R. (4th) 327; Griffiths v. Williams, [1978] 2 E.G.L.R. 121; de Montigny v. Brossard (Succession), 2010 SCC 51, [2010] 3 S.C.R. 64; Jennings v. Rice, [2002] EWCA Civ. 159, [2003] 1 P. & C.R. 100; Commonwealth of Australia v. Verwayen (1990), 170 C.L.R. 394; Sledmore v. Dalby (1996), 72 P. & C.R. 196; Pilcher v. Shoemaker (1997), 13 R.P.R. (3d) 42; Ellis v. Eddy Holding Ltd. (1996), 7 R.P.R. (3d) 70.
By Brown J.
Considered: Southern Pacific Mortgages Ltd. v. Scott, [2014] UKSC 52, [2015] A.C. 385; referred to: Idle‑O Apartments Inc. v. Charlyn Investments Ltd., 2014 BCCA 451, [2015] 2 W.W.R. 243; Sabey v. von Hopffgarten Estate, 2014 BCCA 360, 378 D.L.R. (4th) 64; Crabb v. Arun District Council, [1976] 1 Ch. 179; Clarke v. Johnson, 2014 ONCA 237, 371 D.L.R. (4th) 618; Tiny (Township) v. Battaglia, 2013 ONCA 274, 305 O.A.C. 372; Schwark Estate v. Cutting, 2010 ONCA 61, 316 D.L.R. (4th) 105; Thorner v. Major, [2009] UKHL 18, [2009] 1 W.L.R. 776; Abbey National Building Society v. Cann, [1991] 1 A.C. 56; Yeoman’s Row Management Ltd. v. Cobbe, [2008] UKHL 55, [2008] 4 All E.R. 713; Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co., [1982] 1 Q.B. 133; Watson v. Goldsbrough, [1986] 1 E.G.L.R. 265; Jennings v. Rice, [2002] EWCA Civ. 159, [2003] 1 P. & C.R. 100.
By Côté J.
Referred to: Browne v. Moody, [1936] 4 D.L.R. 1; National Trust Co. v. Fleury, [1965] S.C.R. 817; Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807; Re Burke (1959), 20 D.L.R. (2d) 396; Gunn Estate, Re, 2010 PECA 13, 200 Nfld. & P.E.I.R. 197; Jackson Estate, Re (2004), 192 O.A.C. 161; Re Smith, [1971] 1 O.R. 584; Cooper v. Fenwick, [1994] O.J. No. 2148 (QL).
Authors Cited
Anger & Honsberger Law of Real Property, 3rd ed. by Anne Warner La Forest. Aurora, Ont.: Canada Law Book, 2006 (loose‑leaf updated December 2016, release 17).
Bright, Susan, and Ben McFarlane. “Proprietary Estoppel and Property Rights” (2005), 64 Cambridge L.J. 449.
Feeney’s Canadian Law of Wills, 4th ed. by James MacKenzie. Toronto: Butterworths, 2000 (loose‑leaf updated September 2016, issue 64).
Gardner, Simon. “The Remedial Discretion in Proprietary Estoppel — Again” (2006), 122 L.Q.R. 492.
Gray, Kevin, and Susan Francis Gray. Land Law, 5th ed. Oxford: Oxford University Press, 2007.
MacDougall, Bruce. Estoppel. Markham, Ont.: LexisNexis, 2012.
McFarlane, Ben. The Law of Proprietary Estoppel. Oxford: Oxford University Press, 2014.
Megarry, Robert, and William Wade. The Law of Real Property, 8th ed. by Charles Harpum, Stuart Bridge and Martin Dixon. London: Sweet & Maxwell, 2012.
Ship, Adam. “The Primacy of Expectancy in Estoppel Remedies: An Historical and Empirical Analysis” (2008), 46 Alta. L. Rev. 77.
Snell’s Equity, 33rd ed. by John McGhee. London: Sweet & Maxwell, 2015.
Widdifield on Executors and Trustees, 6th ed. by Carmen S. Thériault. Scarborough, Ont.: Carswell, 2002 (loose‑leaf updated 2012, release 2).
Wilken, Sean, and Karim Ghaly. The Law of Waiver, Variation, and Estoppel, 3rd ed. New York: Oxford University Press, 2012.
APPEAL from a judgment of the British Columbia Court of Appeal (Saunders, Smith and Willcock JJ.A.), 2016 BCCA 200, 400 D.L.R. (4th) 579, 386 B.C.A.C. 287, 667 W.A.C. 287, [2016] 10 W.W.R. 497, 19 E.T.R. (4th) 225, 87 B.C.L.R. (5th) 273, [2016] B.C.J. No. 927 (QL), 2016 CarswellBC 1238 (WL Can.), setting aside in part a decision of Brown J., 2015 BCSC 1170, 10 E.T.R. (4th) 218, [2015] B.C.J. No. 1428 (QL), 2015 CarswellBC 1871 (WL Can.). Appeal allowed.
G. Darren Williams, Ellen Vandergrift and Moira Dillon, for the appellant.
Claire E. Hunter and Ryan J. M. Androsoff, for the respondent.
The judgment of McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon and Rowe JJ. was delivered by
[1] The Chief Justice — Equity enforces promises that the law does not. This appeal concerns such a promise, part of an arrangement between siblings to provide care for their aging mother. The sister assured the brother that, if he moved back into the family home to do so, he would be able to acquire her share of that property after their mother’s death. The question before us is whether equity — and specifically the doctrine of proprietary estoppel — now binds her to her word.
[2] The trial judge concluded that all the elements of proprietary estoppel were established: the sister promised the brother that he would be able to purchase her eventual interest in their mother’s property; the brother reasonably relied on the expectation that he would be able to do so; and, because of the detriment the brother suffered as a result of his reliance, it would be unfair and unjust in the circumstances to permit the sister to resile from her promise. The evidence supports that conclusion.
[3] That the sister did not have an interest in the property at the time her brother relied on her promise does not negate her obligation to keep her promise; proprietary estoppel will attach to the sister’s interest in the property as soon as she receives it from their mother’s estate. I would allow the appeal.
I. Facts and Judicial History
[4] The Cowper-Smiths of Victoria were not always at odds. Elizabeth and Arthur married in 1945. Together, they raised a daughter, Gloria, and two sons, Max and Nathan. Gloria became a potter and settled with her husband in Victoria. Max practised law in England. Nathan moved to Edmonton, where he worked with abused children on behalf of the Alberta government.
[5] Shortly before Arthur died in 1992, he explained to his sons that he and Elizabeth would leave everything to be divided equally between the three children. They intended to avoid family discord. In that, they failed.
[6] Gloria first fell out with Nathan, who had moved back home in 2000 after his long-term relationship had ended and he had quit his job in Edmonton. He did work around the house with which Elizabeth seemed satisfied. After visits with Gloria, however, Elizabeth would return agitated, concerned that Nathan intended to take her house from her and troubled by what she said were Nathan’s plans to throw “gay parties” there. In February and April 2001, Nathan received two letters in Gloria’s handwriting. The first of these demanded that Nathan not shout or raise his voice in the home or “entertai[n] Gay Males” at home, among other things. The second announced he was no longer welcome to live with his mother and should move out at once. He returned from an overseas trip in June 2001 to find the locks changed, with his belongings still inside. He broke in. Gloria had the police escort him out. He eventually moved back to Edmonton. When, in 2005, Elizabeth asked Nathan to forgive her for what had happened, he assured her that he did not blame her; he knew the ordeal had been Gloria’s doing.
[7] Max was next. In the years following his father’s death, he struggled with financial difficulties and his mental health deteriorated. He turned to alcohol and drugs. His marriage fell apart. After 2000, things improved. A visit to Victoria in 2003 was such a success that he returned later that year and again in 2005. He and Gloria got along well and, when Gloria made it clear that Elizabeth could no longer live on her own, they began to discuss options for their mother’s care. Max eventually agreed to give up his life in England, to move back to Victoria, and to care for their mother and the family home. He did so only after Gloria agreed that Max would be reimbursed for various expenses, have the use of their mother’s car, and, crucially, be able to live in the house permanently and eventually to acquire Gloria’s one-third interest in the same. The arrangement worked until 2009, when Gloria began to back away from her promises. The relationship between the siblings disintegrated, first into acrimony and then into litigation.
[8] In June 2001, around the time that Gloria, accompanied by the police, confronted Nathan at the property, Elizabeth’s estate planning changed dramatically. She transferred title to the property and all her investments into joint ownership with Gloria. Pursuant to a “Declaration of Trust”, Gloria would hold her interests in the house and the investments as bare trustee, with Elizabeth as the sole beneficiary, and Gloria would be “entitled . . . absolutely” to both the property and the investments upon her mother’s death. Elizabeth also executed a new will which appointed Gloria as executor and revoked all previous wills. She revoked this will in 2002, when she executed yet another, her last. She again named Gloria as executor but this time provided that her estate would be divided equally between her three children. Neither the trust declaration nor Gloria’s joint ownership of the property and the investments — which, if valid, would have assured that Elizabeth’s estate would be virtually devoid of assets, her last will notwithstanding — was ever changed.
[9] Nathan discovered Gloria’s joint ownership of the house in 2005. Gloria assured him that the arrangement was to simplify the administration of their mother’s estate and that he and Max would still each receive a one-third share. She gave Max the same assurance four years later, when he learned that Gloria’s name was on title. Gloria changed her position only in April 2011, when, eight months after Elizabeth’s death, the trust declaration entitling Gloria to Elizabeth’s assets “absolutely” came to light and Gloria announced her plans to put the house, in which Max was still living, on the market.
[10] These proceedings ensued. Nathan and Max sought an order setting aside the 2001 trust declaration as the product of Gloria’s undue influence over Elizabeth and declaring that Gloria therefore held the property and investments in trust for Elizabeth’s estate, to be divided equally between the three children in accordance with the 2002 will. They also claimed, on the basis of proprietary estoppel, that Max was entitled to purchase Gloria’s one-third interest in the house.
[11] The brothers succeeded at trial: 2015 BCSC 1170, 10 E.T.R. (4th) 218. The trial judge found that Gloria had not rebutted the presumptions of undue influence and resulting trust, and she declared that the property belonged to Elizabeth’s estate. She also held that the elements of proprietary estoppel had been made out. Gloria appealed. The British Columbia Court of Appeal (2016 BCCA 200, 400 D.L.R. (4th) 579) unanimously upheld the trial judge’s conclusions with respect to undue influence and resulting trust, but split on proprietary estoppel. The majority held that, since Gloria owned no interest in the property, proprietary estoppel could not arise. Smith J.A. dissented; she would have dismissed Gloria’s appeal entirely.
[12] Max appeals to this Court on the issue of proprietary estoppel. Gloria has not cross-appealed with respect to undue influence or resulting trust.
II. Issues
[13] The main question before us is whether the trial judge erred in concluding that proprietary estoppel operates to enforce Gloria’s promise. We must therefore consider the elements of proprietary estoppel and determine whether the evidence supports the trial judge’s conclusion that those elements are met. Specifically, we must decide whether Gloria’s lack of ownership of an interest in the property defeats Max’s claim.
[14] If proprietary estoppel may indeed be established, then we must turn to the question of remedy.
III. Analysis
[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: see Thorner v. Major, [2009] UKHL 18, [2009] 1 W.L.R. 776, at para. 29, per Lord Walker; see also Sabey v. von Hopffgarten Estate, 2014 BCCA 360, 378 D.L.R. (4th) 64, at para. 30; Clarke v. Johnson, 2014 ONCA 237, 371 D.L.R. (4th) 618, at para. 52; Idle-O Apartments Inc. v. Charlyn Investments Ltd., 2014 BCCA 451, [2015] 2 W.W.R. 243, at para. 49; Scholz v. Scholz, 2013 BCCA 309, 340 B.C.A.C. 151, at para. 31. 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; Sabey, at para. 33; B. MacDougall, Estoppel (2012), at p. 446; Snell’s Equity (33rd ed. 2015), by J. McGhee, at p. 335. 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.
[16] Proprietary estoppel protects the equity, which in turn protects the claimant’s reasonable reliance: see S. Bright and B. McFarlane, “Proprietary Estoppel and Property Rights” (2005), 64 Cambridge L.J. 449, at p. 452. 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: see Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co., [1981] 1 All E.R. 897 (Ch.), at pp. 909, 915-16 and 918. As Lord Denning M.R. put it in Amalgamated Investment & Property Co. (In Liquidation) v. Texas Commerce International Bank Ltd., [1982] 1 Q.B. 84 (C.A.), at p. 122:
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.
See also Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53, at para. 51; MacDougall, at pp. 15-16.
[17] 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.
[18] Consensus as to the elements of proprietary estoppel has proved elusive: see Thorner, at para. 29, per Lord Walker; MacDougall, at pp. 444-47. Recent decades have seen a softening of the five criteria, or “probanda”, set out by Fry J. in Willmott v. Barber (1880), 15 Ch. D. 96, at pp. 105-6 — and cited by this Court in Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., [1970] S.C.R. 932, at pp. 938-39, and Sohio Petroleum Co. v. Weyburn Security Co., [1971] S.C.R. 81, at pp. 85-86 — as judges have moved away from strict requirements that would constrain their ability to do justice in the circumstances of a particular case: see Clarke, at paras. 41-53; Sykes v. Rosebery Parklands Development Society, 2011 BCCA 15, 330 D.L.R. (4th) 84, at paras. 44-49; Erickson v. Jones, 2008 BCCA 379, 299 D.L.R. (4th) 465, at paras. 52-57; Crabb, at pp. 876-77, per Scarman L.J.; Taylors Fashions, at pp. 915-18.
[19] But flexibility must not come at the expense of clarity and predictability. As Professor MacDougall has commented:
While the five probanda ought to be replaced as the criteria for the estoppel, a structured formulation for establishing the need for proprietary estoppel serves the purpose of providing a useful and reasonably clear-cut method for predicting the estoppel. The replacement of such a structure by a single factor of “unfairness” or “unconscionability” leads . . . [to] too open-ended and amorphous a doctrine that only encourages litigation, particularly given the already very flexible and open-ended nature of the effect of the estoppel. [p. 447]
[20] I agree. Unfairness or injustice — sometimes referred to as “unconscionability”, albeit not in the sense in which that term is used in contract law (see Ryan, at para. 74) — are not stand-alone criteria; they are what proprietary estoppel aims to avoid by keeping the owner to her word.
[21] 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; Burgsteden v. Long, 2014 SKCA 115, 378 D.L.R. (4th) 562, at para. 25; Clarke, at para. 52; Eberts v. Carleton Condominium Corp. No. 396 (2000), 136 O.A.C. 317, at para. 23; Bellton Farms Ltd. v. Campbell, 2016 NSCA 1, 394 D.L.R. (4th) 262, at para. 46. Still, as Professor MacDougall has noted, “[a] limitation to land is arguably arbitrary . . . . It arises from the somewhat chance circumstance that proprietary estoppel . . . originated as a device to get round form requirements that mainly constrained the creation of or transfer of rights to land”: p. 450; see also Wettstein v. Wettstein, 1992 CarswellBC 1421 (WL Can.) (S.C.), at paras. 56-57. 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.
[22] We need not decide, in this case, whether proprietary estoppel may attach to an interest in property other than land; Max’s expectation was that he would enjoy a right over the family home, namely, the right to acquire Gloria’s eventual interest in it. Nor need we determine whether equity more broadly enforces non-contractual promises on which claimants have detrimentally relied: see, e.g., Waltons Stores (Interstate) Ltd. v. Maher (1988), 76 A.L.R. 513 (H.C.), at pp. 524-25, per Mason C.J. and Wilson J. As I will explain, proprietary estoppel may prevent the inequity of unrequited detriment where a claimant has reasonably relied on an expectation that he will enjoy a right or benefit over property, even when the party responsible for that expectation does not own an interest in the property at the time of the claimant’s reliance.
A. Was Max’s Reliance Reasonable?
[23] As we have seen, to establish proprietary estoppel one must first establish an equity of the kind that proprietary estoppel protects. This requires three things: a representation or assurance on the basis of which the claimant expects to enjoy a right or benefit over property, reasonable reliance on that expectation, and detriment as a result of the reliance. When the owner of an interest in the property over which the claimant expects to enjoy a right or benefit is responsible for the representation or assurance, then the equity established by the claimant’s reasonable reliance may be given effect by proprietary estoppel.
[24] There is no question that Gloria assured Max that, if he moved back to Victoria to care for their mother, he would be able to acquire her eventual interest in the house. Nor is it disputed that, as a result of his reliance on that assurance, Max has suffered a detriment. The trial judge determined, and all now agree, that “Max acted to his detriment in moving from England to Victoria, giving up employment income, the long-term lease of a cottage, his contacts with his children, and his social life to look after his aged dementing mother” and that “[h]e did so relying on Gloria’s agreement to his conditions for the move”: para. 118.
[25] The question is whether Max’s reliance was reasonable. If not, then no equity arose in his favour. Gloria argues — and the Court of Appeal majority accepted — that Max’s reliance could not have been reasonable because Gloria did not own an interest in the property. As Willcock J.A. wondered, at para. 111 of his reasons, “[h]ow can there be reasonable reliance upon a promise to convey an interest in property made by one who does not have such an interest or whose interest is uncertain?”
[26] Reasonableness is circumstantial. As Lord Walker put it in Thorner, “to establish a proprietary estoppel the relevant assurance must be clear enough”, that is, “[t]he promise must be unambiguous and must appear to have been intended to be taken seriously. Taken in its context, it must have been a promise which one might reasonably expect to be relied upon by the person to whom it was made”: para. 56, quoting Walton v. Walton, E.W.C.A., April 14, 1994 (unreported), at para. 16, per Hoffmann L.J.; see also Gillett v. Holt, [2001] Ch. 210 (C.A.), at p. 225; Taylors Fashions, at pp. 915-16; McGhee, at p. 338. What matters is what one party induced the other to expect; as Lord Hoffmann stated in Thorner, the question is whether “the meaning . . . conveyed would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon”: para. 5; see also Crabb, at p. 871; B. McFarlane, The Law of Proprietary Estoppel (2014), at p. 98.
[27] In Thorner, one party had induced the other to expect that he would inherit farm property. Since the parties knew “that the extent of the farm was liable to fluctuate (as development opportunities arose, and tenancies came and went)”, “[t]here is no reason to doubt that their common understanding was that [the] assurance related to whatever the farm consisted of at [the owner’s] death”: para. 62. This was not the sort of uncertainty which would make reliance on the assurance unreasonable because “it is unprofitable, in view of the retrospective nature of the assessment which the doctrine of proprietary estoppel requires, to speculate on what might have been”: para. 65.
[28] This approach to assessing certainty — and thus the reasonableness of reliance — permits equity “to mitigate the rigours of strict law”: Crabb, at p. 871; see also Thorner, at para. 98, per Lord Neuberger. Unlike a contract, which, “subject to the narrow doctrine of frustration, must be performed come what may”, equity “looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept”: Walton, at paras. 20-21, quoted in Thorner, at para. 57.
[29] In a proprietary estoppel claim, where the equity is said to have arisen when the claimant relied on an expectation that he would enjoy some right or benefit over property, it may be that the party responsible for the expectation had such a speculative interest in the property that the claimant’s reliance could not have been reasonable: see Cobbe v. Yeoman’s Row Management Ltd., [2008] UKHL 55, [2008] 1 W.L.R. 1752, at para. 20, per Lord Scott. But whether this is so will depend on context, not on ex ante doctrinal restrictions. The Court of Appeal majority’s proposed bright line rule — namely, that reliance on a promise by a party with no present interest in property can never be reasonable — is out of step with equity’s purpose, which is to temper the harsh effects of strict legal rules.
[30] Whether, in a particular case, a claimant’s reliance was reasonable in the circumstances is a question of mixed fact and law. A trial judge’s determination of this point is, absent palpable and overriding error, entitled to deference: see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 36.
[31] Here, on the trial judge’s findings, both Max and Gloria had clearly understood for well over a decade that their mother’s estate, including the house in which she lived, would be divided equally among her three children upon her death. Nathan, Max, and Max’s ex-wife each testified to a conversation with Elizabeth and Arthur, just prior to Arthur’s death in 1992, in which both parents made clear that everything they owned would be divided equally among their three children once Elizabeth passed away. Max’s evidence was that Elizabeth confirmed as much to him in 2002. Gloria conceded at trial that, in the years before her mother’s death, she made statements evincing the same expectation. She departed from that position — and asserted that she was entitled to all of her mother’s assets, the house included — only in April 2011.
[32] It was thus sufficiently certain that Gloria would inherit a one-third interest in the property for her assurance to be taken seriously as one on which Max could rely. Max and Gloria negotiated for an extended period before Max uprooted his life in England and returned to Victoria. Gloria promised unequivocally that he would be able to acquire her share of the property if he did so. She made that commitment, among others, with the purpose of enticing him back to the family home. In this, she succeeded. I see no basis on which to overturn the trial judge’s conclusion that, in these circumstances, Max’s reliance was reasonable.
[33] Max reasonably relied on the expectation that he would be able to acquire Gloria’s