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Promises Made, Promises Broken – Proprietary Estoppel Found in Mulholland v. Mulholland Estate

This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.

Mulholland v. Mulholland Estate, 2019 ONSC 5785 (CanLII), http://canlii.ca/t/j2whj

Justice Woodley’s opening lines in this decision are telling: “Few proceedings are as complicated, contentious, or costly, as an estate dispute amongst family members. This proceeding is no exception.”

This case dealt with a broken promise and a claim for the equitable relief of proprietary estoppel (among several other issues).

The Story

The deceased was survived by his wife and nine adult children. One of those children, the applicant in this case, James, suffered from health issues and in 1983 left university and moved home to live with his parents on a 100-acre horse farm. From that day on, James ran the day to day operation of the farm vastly expanding the horse operation and buildings at the direction of his father. James produced extensive documentation supporting his claim for contributions to the property and buildings.

James testified that his father did not pay him regular wages, but, instead promised James that he would receive an ownership interest in the farm that would include severance of a portion of the property and the building of a family home at no cost to him. Later, this agreement was modified by the father and James, since the severance had been denied: James would receive the main residence at the property once his mother passed. While it was never documented in writing, two brothers provided evidence that supported this agreement.

James was also wholly financially supported by his father from 1983 until his father’s death in 2007, although this level of support was so low it left James close to poverty. James accepted this as he was building a business with his father and expected a parcel of land and a home. However, the father unilaterally breached this agreement, and no property or interest in the property was ultimately left to James after his father passed.

The deceased’s wife, James’ mother, testified that “she” never contemplated giving him a parcel of land. Although she admitted that there was a fenced off area on the property that she had made inquiries about severing in her mind to address “house for a farm manager.” Justice Woodley found this to be an interesting statement given that James was the farm manager at that time. While the municipality had denied a severance claim, James had exclusive use of the fenced off area for 20 years and planted a tree nursery and fruit trees.

His mother argued that James’ claim had to fail since James was fully compensated for his work and services and he had free room and board on the property.

Proprietary Estoppel

Justice Woodley found that during the father’s lifetime he assured James that he would receive a home and a proprietary interest in a portion of the farm property. While these assurances changed over the years due to land severance issues, James was still always assured that he would receive a home, and property of some nature on the farm in exchange for his work and services. James reasonably relied on the expectation that he would be provided with a home and obtain a proprietary interest in the property. He continued to dedicate his work and services to the betterment of the property. He trusted his father’s assurances.

Due to the detriment that James suffered as a result of his reliance, it would be unfair and unjust to permit the father, through his estate plan and by reason of his death, to resile from such assurances. Justice Woodley found that the equitable relief of proprietary estoppel provided a remedy for James.

Relying on the leading case of Cowper-Smith v Morgan, [2017] 2 SCR 754, Justice Woodley noted that proprietary estoppel protects the equity, which in turn protects the claimant’s reasonable reliance. Like other estoppels, proprietary estoppel avoids the unfairness or injustice that would result to one party if the other were permitted to break their word and insist on their strict legal right.

As all of the elements of proprietary estoppel were made out, it was appropriate to satisfy the equity by recognizing the creation of property rights despite the “want of writing”.

Justice Woodley concluded that James was entitled to receive that which was promised to him and James was granted a “trust interest” in the farm as to a 1/3 interest. As there were no assets in the residuary estate to pay out his interest, it was determined that the property had to be sold.

As a result of Justice Woodley’s, “view that the testator [was] at ‘fault’ in causing or contributing to the proceedings” and that the application was reasonably necessary in the circumstance, the costs for all parties were to be covered by the estate. However, as there were no assets remaining, other than the farm, the costs were to come out of the remaining 2/3 interest in the property.


Alleged “promises” by family members often lead to contentious litigation before our courts. Often these promises are never formally documented but are built on “trust” between family members. The equitable remedy of proprietary estoppel is one way to right the wrong of a broken promise.

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