Idle-O Apartments Inc. v. Charlyn Investments Ltd.

• Jurisdiction: British Columbia
• Court: Court of Appeal (British Columbia)
• Judge: Newbury, Garson and Harris, JJ.A.
• Citation: (2014), 363 B.C.A.C. 282 (CA),2014 BCCA 451
• Date: 20 November 2014

Idle-O Apartments v. Charlyn Inv. (2014), 363 B.C.A.C. 282 (CA);

    624 W.A.C. 282

MLB headnote and full text

Temp. Cite: [2014] B.C.A.C. TBEd. NO.045

Idle-O Apartments Inc. (appellant/respondent on cross-appeal/plaintiff) v. Charlyn Investments Ltd. (respondent/appellant on cross-appeal/defendant)

(CA041414; 2014 BCCA 451)

Indexed As: Idle-O Apartments Inc. v. Charlyn Investments Ltd.

British Columbia Court of Appeal

Newbury, Garson and Harris, JJ.A.

November 20, 2014.

Summary:

Idle-O Apartments Inc. purported to grant a long-term (998 years) lease of unsubdivided land to Charlyn Investments Ltd. in 1978. The parties were not at arm's length. Charlyn constructed cottages and other improvements, and paid rent and taxes. In 2000, Idle-O learned that the lease was illegal and unenforceable, on the basis of s. 73 of the Land Title Act, which prohibited the long-term leasing of an unsubdivided portion of land, and the "Top Line" case (1996) (B.C.C.A.). Idle-O claimed for exclusive possession. Charlyn's equitable counterclaims included proprietary estoppel and unjust enrichment. In 2007, s. 73.1 of the Land Title Act was enacted: a lease that was unregistrable was not unenforceable between the parties to the lease . The new provision was silent on the topic of retrospective application.

The British Columbia Supreme Court, in a decision reported at [2008] B.C.T.C. Uned. 535, dismissed Idle-O's action. The Court gave s. 73.1 retrospective effect, and thus ruled that the lease was valid and enforceable. Idle-O appealed.

The British Columbia Court of Appeal, in a decision reported at (2010), 292 B.C.A.C. 277; 493 W.A.C. 277, allowed the appeal. Nothing in the language of s. 73.1 expressly or by necessary implication required that it be given retrospective effect. Thus, the lease remained invalid and unenforceable. Charlyn's claims, including proprietary estoppel, unjust enrichment and damages, were remitted to the Supreme Court.

The British Columbia Supreme Court, in a decision reported at [2013] B.C.T.C. Uned. 2158, ruled that Charlyn had made out a claim in proprietary estoppel. Both parties shared a mistaken belief at the time that "they were bound by a legally valid lease" and had conducted themselves accordingly for some 22 years. The trial judge granted Charlyn the remedy of a "replacement" lease in the same terms as the original 1978 lease. In the alternative, Charlyn had made out its counterclaim in unjust enrichment. Idle-O appealed on the grounds that the trial judge erred in giving "retrospective application" to s. 73.1; in granting a remedy under the principle of proprietary estoppel; and in awarding an alternative remedy in unjust enrichment.

The British Columbia Court of Appeal allowed the appeal in part. The trial judge did not err in finding that the elements of proprietary estoppel had been met. To the extent that the judge applied s. 73.1, she was in error. The result could have been properly reached on a "balancing" of the interests involved in this case. The judge should have considered not only the parties' expectations as expressed in the lease, but also the problems of a public nature, created by the non-compliance with the requirements normally imposed as a condition of subdivision approval. Thus, the Court deleted the term of 998 years and substituted a term that the land could be used only for purposes of recreation of Charlyn's present directors and their children (and their guests from time to time). "In this way, I hope that the remedy in this case can fulfil the parties' expectations in the main, but without affecting too adversely and for too long a time, the public interests which are served by the requirements surrounding the subdivision of land in British Columbia."

Contracts - Topic 6504

Illegal contracts - General - Enforcement of illegal contracts - See paragraphs 46 to 86.

Estoppel - Topic 1324

Estoppel in pais (by conduct) - Acquiescence - Proprietary estoppel - See paragraphs 46 to 86.

Landlord and Tenant - Topic 2623

The lease - Validity - Subdivision restrictions - See paragraphs 46 to 86.

Landlord and Tenant - Topic 2666

The lease - Registration - Effect of unregistered lease - See paragraphs 46 to 86.

Land Regulation - Topic 2702

Land use control - Subdivision control - Conveyance or subdivision contrary to legislation - See paragraphs 46 to 86.

Mistake - Topic 263

Mistake of law - Mutual mistake - Effect of - See paragraphs 46 to 86.

Cases Noticed:

International Paper Industries Ltd. v. Top Line Industries Inc. (1996), 76 B.C.A.C. 114; 125 W.A.C. 114; 20 B.C.L.R.(3d) 41 (C.A.), refd to. [para. 1].

Sykes v. Rosebery Parklands Development Society (2011), 298 B.C.A.C. 222; 505 W.A.C. 222; 2011 BCCA 15, refd to. [para. 21].

Trethewey-Edge (Dyking District) v. Coniagas Ranches Ltd. et al. (2003), 180 B.C.A.C. 258; 297 W.A.C. 258; 2003 BCCA 197, refd to. [para. 22].

Sabey v. von Hopffgarten Estate et al., [2013] B.C.T.C. Uned. 642; 2013 BCSC 642; appeal allowed (2014), 361 B.C.A.C. 223; 619 W.A.C. 223; 2014 BCCA 360, refd to. [para. 22].

Taylor Fashions Ltd. v. Liverpool Trustees Co., [1981] 1 All E.R. 897 (Ch. Div.), refd to. [para. 23].

Zelmer v. Victor Projects Ltd. (1997), 90 B.C.A.C. 302; 147 W.A.C. 302; 34 B.C.L.R.(3d) 125 (C.A.), refd to. [para. 23].

Reimer (J.S.) Trucking Ltd. v. Triple "G" Logging Ltd. et al., [1994] B.C.T.C. Uned. 748 (S.C.), refd to. [para. 25].

Kok Hoong v. Leong Cheong Kweng Mines Ltd., [1964] A.C. 993 (P.C.), refd to. [para. 27].

Yaxley v. Gotts, [2000] 1 All E.R. 711 (C.A.), refd to. [para. 28].

Erickson v. Jones et al. (2008), 259 B.C.A.C. 292; 436 W.A.C. 292; 2008 BCCA 379, refd to. [para. 30].

Kilcarne Holdings Ltd. v. Targetfollow (Birmingham) Ltd., [2005] E.W.C.A. Civ. 45, refd to. [para. 30].

Transport North American Express Inc. v. New Solutions Financial Corp. (2004), 316 N.R. 84; 183 O.A.C. 342; 2004 SCC 7, refd to. [para. 32].

Hayward v. Bennett, [2011] B.C.T.C. Uned. 1015; 2011 BCSC 1015, refd to. [para. 35].

Garland v. Consumers' Gas Co. (2004), 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 38].

Holman et al. v. Johnson, alias Newland (1775), 98 E.R. 1120 (Q.B.), refd to. [para. 38].

Kingstreet Investments Ltd. et al. v. New Brunswick (Minister of Finance) et al. (2007), 355 N.R. 336; 309 N.B.R.(2d) 255; 799 A.P.R. 255; 2007 SCC 1, refd to. [para. 39].

Pacific National Investments Ltd. v. Victoria (City) et al. (2004), 327 N.R. 100; 206 B.C.A.C. 99; 338 W.A.C. 99; 2004 SCC 75, refd to. [para. 39].

Equuscorp Pty. Ltd. v. Haxton, [2012] HCA 7 (Aust. H.C.), refd to. [para. 40].

Tsoi v. Lai, [2012] B.C.T.C. Uned. 1082; 2012 BCSC 1082, refd to. [para. 40].

McMillan v. Johnson Estate et al. (2011), 299 B.C.A.C. 151; 508 W.A.C. 151; 2011 BCCA 48, refd to. [para. 42].

Kerr v. Baranow (2011), 411 N.R. 200; 300 B.C.A.C. 1; 509 W.A.C. 1; 274 O.A.C. 1; 2011 SCC 10, refd to. [para. 42].

Willmott v. Barber (1880), 15 Ch. D. 96, refd to. [para. 46].

Amalgamated Investment & Property Co. v. Texas Commerce International Bank Ltd., [1981] 3 All E.R. 577 (C.A.), refd to. [para. 47].

Ives (E.R.) Investments Ltd. v. High, [1967] 1 All E.R. 504 (C.A.), refd to. [para. 47].

Crabb v. Arun District Council, [1976] 1 Ch. 179 (C.A.), refd to. [para. 48].

Shaw v. Applegate, [1978] 1 All E.R. 123 (C.A.), refd to. [para. 48].

Yeoman's Row Management Ltd. et al. v. Cobbe, [2008] UKHL 55; 393 N.R. 104, refd to. [para. 48].

Muschinski v. Dodds (1985), 160 C.L.R. 583 (Aust. H.C.), refd to. [para. 48].

Hillingdon London Borough Council v. ARC Ltd. (No. 2), [2000] R.V.R. 283 (C.A.), refd to. [para. 54].

Bridgestart Properties Ltd. v. London Underground Ltd., [2004] E.W.C.A. Civ. 793, refd to. [para. 54].

Moorgate Mercantile Co. v. Twitchings, [1975] 3 All E.R. 314, refd to. [para. 55].

Ryan v. Moore et al. (2005), 334 N.R. 355; 247 Nfld. & P.E.I.R. 286; 735 A.P.R. 286; 2005 SCC 38, refd to. [para. 55].

Cook v. Thomas, [2010] E.W.C.A. Civ. 227, refd to. [para. 59].

Scholz v. Scholz (2013), 340 B.C.A.C. 151; 579 W.A.C. 151; 2013 BCCA 309, refd to. [para. 59].

Drummond Wren, Re, [1945] O.R. 778 (H.C.), refd to. [para. 67].

E.D. & F. Man (Sugar) Ltd. v. Haryanto (No. 2), [1991] 1 Lloyds L.R. 429 (C.A.), refd to. [para. 68].

Friends of the Oldman River Society v. Canada (Minister of Transport and Minister of Fisheries and Oceans), [1992] 1 S.C.R. 3; 132 N.R. 321, refd to. [para. 72].

Charles Osenton & Co. v. Johnston, [1942] A.C. 130 (H.L.), refd to. [para. 72].

Wenngatz v. 371431 Alberta Ltd. et al. (2013), 337 B.C.A.C. 291; 576 W.A.C. 291; 2013 BCCA 225, refd to. [para. 72].

Stone v. Ellerman et al. (2009), 273 B.C.A.C. 126; 461 W.A.C. 126; 2009 BCCA 294, refd to. [para. 72].

Harper v. Canada (Attorney General) (2000), 262 N.R. 201; 271 A.R. 201; 234 W.A.C. 201; 2000 SCC 57, refd to. [para. 72].

Jennings v. Rice, [2002] E.W.C.A. Civ. 159, refd to. [para. 76].

Pascoe v. Turner, [1979] 1 W.L.R. 431 (C.A.), refd to. [para. 76].

Sledmore v. Dalby (1996), 72 P. & C.R. 196, refd to. [para. 76].

Australia (Commonwealth) v. Verwayen, [1990] H.C.A. 39, refd to. [para. 76].

Powell v. Benney, [2007] E.W.C.A. Civ. 1283, refd to. [para. 80].

Ottey v. Grundy, [2003] E.W.C.A. Civ. 1176, refd to. [para. 80].

Statutes Noticed:

Land Title Act, R.S.B.C. 1996, c. 250, sect. 73 [para. 13]; sect. 73.1 [para. 16].

Authors and Works Noticed:

Bright, Susan, and McFarlane, Ben, Proprietary Estoppel in Property Rights (2005), 64 Camb. L.J. 449, pp. 458 to 465 [para. 80].

Gardner, Simon, The Remedial Discretion in Proprietary Estoppel - Again (2006), 122 L.Q.R. 492, pp. 496 [para. 80]; 502 to 504 [para. 81].

Halsbury's Laws of England (4th Ed.) (1992), vol. 16, paras. 1072 [paras. 21, 47]; 1092 [para. 74].

Harpum, Charles, Bridge, Stuart, Dixon, Martin, Megarry & Wade: The Law of Real Property (7th Ed. 2008), para. 716-8 [para. 73].

MacDougall, Bruce, Estoppel (2012), p. 496 [para. 53].

Maddaugh, Peter D., and McCamus, John D., The Law of Restitution (2012 Looseleaf), generally [para. 38]; p. 15-7 [para. 39].

Megarry and Wade, The Law of Real Property - see Harpum, Charles, Bridge, Stuart, Dixon, Martin, Megarry & Wade: The Law of Real Property.

Pavlich, Dennis J., Condominium Law in British Columbia (1983), pp. 38 to 46 [para. 6].

Rankin, W. David, Concerning an Expectancy-Based Remedial Theory of Promissory Estoppel (2011), 69 U.T. Fac. L. Rev. 116, generally [para. 75].

Ship, Adam, The Primacy of Expectancy in Estoppel Remedies: An Historical and Empirical Analysis (2008), 46 Alta. L. Rev. 77, pp. 82, 100 [para. 75].

Snell's Equity (31st Ed. 2005), § 10-19 [para. 57].

Snell's Equity (32nd Ed. 2010), § 12-23 [paras. 28, 67].

Counsel:

H.W. Veenstra, for the appellant;

S. Batkin and R.A. Clark, for the respondent.

This appeal was heard at Vancouver, British Columbia, on October 8 and 9, 2014, before Newbury, Garson and Harris, JJ.A., of the British Columbia Court of Appeal. In reasons written by Newbury, J.A., the Court delivered the following judgment, dated November 20, 2014.