Friday, March 28, 2014

Proprietary estoppel may be used to create a life interest in land

Clarke v. Johnson, 2014 ONCA 237 clarifies the law on proprietary estoppel and holds it may be used to create a life interest in land:


[52]        A summary of the principles governing proprietary estoppel based on the modern approach include the following:

- proprietary estoppel may form the basis of a cause of action;

- it is not essential that the five probanda be satisfied;

- rather, three elements must be established:

(i) the owner of the land induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the property;

(ii) in reliance upon his belief, the claimant acts to his detriment to the knowledge of the owner; and

(iii) the owner then seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive;

- detriment includes expenditures but countervailing benefits may also be considered;

- reliance may be express or inferred;

- if an equity arises, the court has a broad discretion to fashion an appropriate remedy.

[53]        That said, one must be reminded of Oliver J.’s observation in Taylor Fashions at p. 913:

I am not at all convinced that it is desirable or possible to lay down hard and fast rules which seek to dictate, in every combination of circumstances, the considerations which will persuade the court that a departure by the acquiescing party from the previously supposed state of law or fact is so unconscionable that a court of equity will interfere. Nor, in my judgment, do the authorities support so inflexible an approach.

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