Contracts

• Author: International Law Group

Ms. A. (defendant) left her secure bank job and her home in England and moved to Vancouver in July 1993 to live with her boyfriend Mr. M. (plaintiff) because plaintiff had promised to pay down the mortgage on her home in England if she moved into his home. The relationship was stormy, partly because plaintiff did not pay off defendant's mortgage debt of $73,048.53.

On the other hand, he did lend her $100,000 on a promissory note dated 6 April 1994, and she applied those funds to her mortgage debt. Plaintiff soon evicted her, however, and, since then, defendant has been unable to find a permanent job either in England or in Vancouver.

Plaintiff sued defendant in the British Columbia courts to collect the loan. He alleged that their relationship was ephemeral and that he intended that defendant would have to pay off his loan. In response, defendant relied on several theories. One was that the money was a gift, and another was that the court should estop plaintiff from collecting the "loan" because he had made a promise upon which defendant had relied to her detriment. Defendant also counterclaimed to have plaintiff pay down the remainder of the mortgage.

The trial judge refused to order plaintiff to pay down the remainder of the mortgage. He reasoned that the defendant had failed to establish the existence of a legal relationship between the two parties at the time of the promise. Defendant appealed, arguing that the trial judge erred in requiring proof of an existing legal relationship as a necessary element of promissory estoppel. The British Columbia Court of Appeal, however, dismisses her appeal.

The Court first points out that "[t]he only issue on this appeal is whether the trial judge erred in refusing to enforce the promise on which Ms. A. relied to her detriment." [¶ 3] Defendant's counsel asked the court "to follow the path already well trod by the courts of New Zealand, Australia, and the United States, and being opened in England to an equitable remedy for injurious reliance on a promise intended to bind its maker and to be acted upon by the promisee to the knowledge of the promisor." [¶ 4]

Although the Court agrees that the trial judge may have erred in requiring proof of an existing legal relationship at the time of the promise, it declines to extend the doctrine of promissory estoppel to right a wrong done to Ms. A.

Defendant relied on developments in the American law of promissory estoppel and the concept of injurious reliance...