Court of Appeal Decision of the Week

Proprietary Estoppel: Applying Wolf v. Canada (Attorney General), 2017 BCCA 30 (CanLII)

Case: Hawes v. Dave Weinrauch and Sons Trucking Ltd., 2017 BCCA 114 (CanLII)

Keywords: Subsurface Mineral Rights; Proprietary Estoppel; Equity

Synopsis:

Westmin Resources Ltd. acquires the “Ainsworth property” located in West Kootenay Lake region; hires the appellants as caretakers. In exchange for their services, Westmin allows the appellants to occupy a house for payment of a modest rent.

Boliden Westmin (Canada) Ltd. later acquires the Ainsworth property from Westmin. According to the appellants, Boliden provides assurances the houses they occupy would become theirs. Counsel for Boliden writes to the British Columbia Assets and Land Corporation (BCAL) with a view to completing the sale to the appellants. Although Counsel for Boliden eventually prepares draft contracts for the purchase and sale of properties occupied by the appellants (“if certain conditions were met”), the agreements are never executed.

Boliden is itself acquired by Breakwater Resources Ltd. A senior land administrator informs the appellants that Boliden (now called NVI Mining Ltd.) is not prepared to sell the houses. The Ainsworth Property is then sold to the Respondent (Dave Weinrauch and Sons Trucking Ltd.) in 2008. The Respondent advises the appellants they are permitted to remain in the houses until the spring of 2009. The appellants refuse to leave; argue it would be unconscionable for the respondent to go back on its assurances.

The appellants seek a declaration that, on the basis of proprietary estoppel, they are entitled to a quitclaim from the respondent of subsurface mineral rights. After a finding by the Trial Judge the appellants had not established an equitable claim in the property, their subsequent appeal is dismissed by the Court of Appeal. Frankel J.A. finds the actions of the predecessor in title cannot support an equitable claim against it. Accordingly, there is no claim against the successor.

Importance:

Citing the recent decision of the British Columbia Court of Appeal in Wolf v. Canada (Attorney General), 2017 BCCA 30 (CanLII), Frankel J.A. referred to the following general principles and test for proprietary estoppel (at para. 30):

[20]      Before addressing the specific errors alleged by the appellant, it will be useful to briefly outline the general principles of proprietary estoppel.  The approach to be taken was set out by Lord Justice Scarman in the seminal case of Crabb v. Arun District Council, [1976] 1 Ch. 179 at 192-93:

In such a case I think it is now well settled law that the court, having analysed and assessed the conduct and relationship of the parties, has to answer three questions.  First, is there an equity established?  Secondly, what is the extent of the equity, if one is established?  And, thirdly, what is the relief appropriate to satisfy the equity?

[21]      In order to determine the question of whether an equity has been established, some cases have posed four sub-questions (see [Idle-O Apartmentsv. Charlyn Investments Ltd.2014 BCCA 451 (CanLII)] at paras. 22 and 24).  Those sub-questions were combined into the following two-pronged test by Madam Justice Bennett in Sabey v. Rommel2014 BCCA 360 (CanLII) at para. 30 (which the summary trial judge set out at para. 21, quoting from Idle-O Apartments at para. 49):

  1.   Is an equity established?  An equity will be established where:a. There was an assurance or representation, attributable to the owner, that the claimant has or will have some right to the property, andb. The claimant relied on this assurance to his or her detriment so that it would be unconscionable for the owner to go back on that assurance.

For the purposes of the present case, it is important to note that the assurance or representation need not be express and can be inferred from the conduct of a party, and that acquiescence can amount to an assurance or representation.

Frankel J.A. described as “pertinent” additional language from Lord Denning’s judgment in Crabb v. Arun District Council, [1976] 1 Ch. 179 at 187–188 (C.A), with emphasis on the following passage (at para. 31):

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.

Applying these principles, the Court of Appeal determined that Boliden had never assured the appellants by word or conduct the houses would become theirs if they continued to live in them and act as caretakers of the Ainsworth property. (See para. 34).

Contrary to the Trial Judge’s reasoning, which proceeded on the basis Boliden had given some assurances, the Court of Appeal found the only representation in this matter was an indication Boliden would be prepared to conditionally sell the houses to the appellants. Unfortunately for the appellants, the Court of Appeal found no such agreement was ever reached. (See para. 34).

As such, the Court of Appeal concluded the appellants’ decision to expend money improving their living conditions was not, for the purpose of the appeal, incurred because the appellants had been given assurances the houses would be theirs. (See para. 37).

Counsel for the Appellants: Timothy Pearkes and Ahna Fernandez (Pearkes & Fernandes, Nelson, British Columbia)

Counsel for the Respondent: Blair Suffredine, Q.C. Nelson, British Columbia

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Posted: Wednesday, March 15, 2017