Docket: CACV2254 David Long (Defendant) Appellant - v. -, 2014 SKCA 115

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2014 SKCA 115 Date: 2014-11-14 Between: Docket: CACV2254 David Long (Defendant) Appellant - and - Marlene Van Burgsteden (Plaintiff) Respondent Coram: Ottenbreit, Caldwell and Whitmore JJ.A. Counsel: Melvin R. Annand, Q.C. for the appellant Peter V. Abrametz for the respondent Appeal: From: 2012 SKQB 89 Heard: April 15, 2014 Disposition: Allowed in part Written Reasons: November 14, 2014 By: The Honourable Mr. Justice Caldwell

In Concurrence: The Honourable Mr. Justice Ottenbreit The Honourable Mr. Justice Whitmore Caldwell J.A. I. Introduction [1] David Long appeals from the decision of the trial judge (indexed as 2012 SKQB 89) in which she found him liable for thedestruction of some trees and ordered him to pay to Marlene Van Burgsteden $56,179.93 in damages, plus pre-judgment interest on thedamages award, $9,900.00 in punitive damages, and Ms Van Burgsteden’s trial costs. Mr. Long alleges the trial judge committed errorsof fact and law in reaching her decision on liability.

Ms Van Burgsteden cross-appeals alleging the trial judge erred by arbitrarilydiscounting her damages by 25%. I would allow the appeal from the punitive damages award but otherwise dismiss the appeal and Iwould also dismiss the cross-appeal, all for the following reasons. II. background [2] In 2004 Elmer and Mildred Bragg owned property adjacent to the residence of Mr. Long’s nephew, Joel Eckdahl. In May ofthat year, Mr. Eckdahl and his business partner, Ms Van Burgsteden, purchased 204 Colorado spruce trees at auction for $1,300.00.Later in 2004, at Mr Long’s suggestion, Mr.

Eckdahl and Ms Van Burgsteden sought and obtained the Braggs’ permission to plant thetrees on the Braggs’ property, which they did in the fall of 2005, after placing the trees in wire baskets so as to facilitate their easyremoval. This arrangement was not reduced to writing at that time. [3] In May 2007, Mr. Long agreed to purchase the Braggs’ property, subject to it being subdivided, which took almost two years.He took title to the Braggs’ property free and clear on April 1, 2009. At the time he entered the purchase agreement, Mr. Long wasaware of the verbal arrangement between the Braggs and Mr.

Eckdahl and Ms Van Burgsteden with respect to the trees because theBraggs had told him about it, but the purchase agreement made no mention of it. Similarly, Mr. Eckdahl and Ms Van Burgsteden wereaware in 2007 that Mr. Long had agreed to purchase the property, but they did not then seek to protect the verbal arrangement they hadwith the Braggs. [4] In spring 2007, Mr. Long asked Mr. Eckdahl to remove the trees from the property. Mr. Long repeated this request a number oftimes during 2007 and 2008. Finally, on October 2, 2008, Mr. Long had his lawyer send a letter to Mr.

Eckdahl instructing him toremove the trees by October 18, 2008, warning that if he did not, then Mr. Long would destroy the trees without further notice.Mr. Eckdahl and Ms Van Burgsteden had previously removed some trees they had sold to third parties, but they did not comply withMr. Long’s request. They did, however, reduce their arrangement with the Braggs to writing sometime in 2008. [5] This matter came to a head on May 1, 2009, while Mr. Long went about burning dead grass on what had then become hisproperty. He and Mr.

Bragg had ploughed a fire break to protect the yard site from the fire they intended to start, but the fire break wouldnot have protected the trees. From his neighbouring residence Mr. Eckdahl saw smoke from the fire. He then approached Mr. Longwhile Mr. Long supervised the fire. He argued with Mr. Long and then struck him on the forehead with a baseball bat and left himbleeding from a head wound. The fire damaged some of the trees. Later, in July 2009, a contractor hired by Mr. Long removed andshredded the fire-damaged trees as well as all of the undamaged trees remaining on the property. [6] In consequence, Mr.

Eckdahl and Ms. Van Burgsteden brought suit against Mr. Long claiming damages for the loss of 99Colorado spruce trees. Mr. Long countersued Mr. Eckdahl for damages arising from the battery. Mr. Eckdahl later withdrew his claimagainst Mr. Long and settled the counter-claim brought by Mr. Long. Mr. Eckdahl was a witness at trial, but not a party to it. III. trial decision [7] In her statement of claim and at trial, Ms Van Burgsteden sought to establish Mr. Long’s liability for the destruction of thetrees on five footings: (

i) lease, (ii) profit á prendre, (iii) negligence, (iv) nuisance, and (

v) breach of contract. While the trial judgefound Mr. Long liable, she did not do so on any of these footings, which she either rejected or ignored. Rather, the trial judge based herdetermination of liability on two fresh footings: (

i) contractual license and proprietary estoppel and (ii) conversion. She wrote: [38] Based on the evidence, I am satisfied that the agreement between the plaintiffs and the Braggs was in fact a gratuitous licensewhich allowed Marlene VanBurgsteden to store her trees on the Bragg land and to access those trees for the purpose of maintaining andselling them. … [43] As a general rule, because it is a personal contract, a license would not bind a purchaser of the land over which the license isexercised unless the purchaser had notice of the license. (see: Errington v. Errington and Woods, supra at page 299; Stiles v.

TodMountain Development Ltd. (1992), (BC SC), 64 B.C.L.R. (2d) 366 (S.C.) at page 15). The legal basis for this is in

equity and the concept of proprietary estoppel. The Saskatchewan Court of Appeal had occasion to discuss that concept in MontrealTrust Co. v. Williston Wildcatters Co., 2002 SKCA 91, 223 Sask. R. 276.

At para. 47 of that decision, they quoted with approval the trialjudge’s comments as follows: [47] The trial judge set out the test as follows: Thus, where a party expends money on the land of another under an expectation created or encouraged by the owner, or even where thelandowner merely stands silent, the authorities establish that proprietary estoppel may found a cause of action, a revocable licence maybe rendered irrevocable, or the party’s interest may be found in a licence coupled with an equity, the circumstances may establish acontract between the parties, or equity may require that the fee simple be transferred.

The equity is enforceable against a successor intitle who takes with notice. [See: Stiles v. Tod Mountain Development Ltd. (1992), (BC SC), 88 D.L.R. (4th) 735(B.C.S.C.) at p. 743] (see also: Sykes v. Rosebery Parklands Development Society, 2011 BCCA 15, 330 D.L.R. (4th) 84 at para. 44 to 49). [44] In this case, the plaintiff expended money to acquire the baskets in which the trees were placed, and then to move and plant thetrees on the Bragg land.

They did so with the full knowledge of the Braggs and with the full expectation that the trees would remain thereuntil they were sold or used in their landscaping business. The defendant, David Long, knew the terms of the arrangement. In fact, hewas the individual who suggested that the plaintiffs place the trees on the Bragg land in the first place. I accept the evidence of MildredBragg who testified that at the time the land was sold to David Long, in fact when they were signing the agreement for sale, she raisedthe issue of the trees with Mr.

Long advising him that the trees did not go with the land – that they belonged to the plaintiffs. David Longresponded to her comments with a smile and a nod. [8] As might be expected, the trial judge considered the application of The Land Titles Act, 2000, SS 2000, c L-5, in thecircumstances and whether the trees had ceased to be chattels by reason of being planted on the Braggs’ property: [47] In this case, the sole purpose for planting the trees on the Bragg land was to store them until they could be sold or used by theplaintiffs in their landscaping business.

The trees themselves were placed in wire baskets to facilitate their removal. The trees were neverconsidered part of the Bragg land. They were viewed and treated as the sole property of the plaintiffs, not only by the plaintiffs and theBraggs but by the defendant, David Long. This is evident from his demands that the trees be removed. In the circumstances, I find thetrees retained their status as chattels. They never became part of the Bragg land and thus The Land Titles Act, 2000, S.S. 2000, c. L-5.1has no application to them. Mr.

Long has not taken issue in this appeal with the trial judge’s conclusions on the non-application of The Land Titles Act, 2000, or thatthe trees were chattels. [9] Having therefore determined that the trees remained chattels owned by Ms Van Burgsteden, the trial judge turned to considerwhether Ms Van Burgsteden had abandoned the trees, saying: [48] The defendant, David Long, argues that Marlene VanBurgsteden’s failure to remove the trees in response to his verbal andwritten demands constituted an abandonment of her proprietary interest in the trees. He relies on the case of McCutcheon v.

Lightfoot, (MB CA), [1929] 1 W.W.R. 694 (Man. C.A.). [49] In McCutcheon, supra, the defendant purchased land which was being sold by the town for tax arrears. A brick making businesshad operated on the land and when the defendant took possession there was equipment and chattels relating to that business left on theproperty. The defendant notified the plaintiff that he had acquired the property and that the defendant should remove any chattels hewished to keep within 30 days. The plaintiff ignored that communication as well as a further one sent by the defendant’s lawyer.

Thedefendant eventually disposed of the chattels. Only after they were destroyed did the plaintiff notify the defendant that he wished toretain the chattels. The Court of Appeal upheld the trial judge’s finding that the plaintiff had abandoned the property. [50] The McCutcheon case is distinguishable on its facts from the case before me. The evidence establishes, and I accept, that whilethe plaintiffs did not remove the trees as requested by the defendant, they did not ignore his demands.

The evidence establishes that JoelEckdhal [sic] tried to talk to the defendant with respect to the issue and as a result of the defendant’s refusal to enter into discussions withhim that the plaintiffs retained a lawyer to negotiate with the defendant. Those negotiations were ongoing at the time the fire took placein May, 2009. These facts do not support a finding of abandonment. (see also: Stewart v. Gustafson (1998), (SKKB), 171 Sask. R. 27 (Q.B.) at paras. 10 to 22). [10] With these findings in place, the trial judge addressed Mr.

Long’s liability for the destruction of the trees and raised the secondfresh theory of liability, namely, conversion: [51] It is uncontroverted that on the afternoon of May 1, 2009, David Long started a fire in the grass on the Bragg land where thetrees were located. There is not one scintilla of evidence to support a finding that anyone else was involved in setting fires on that land onthat date. I accept the evidence of both Marlene VanBurgsteden and Joel Eckdhal [sic] that the trees were burning and that David Longwas walking along them. Mr.

Long testified in examination in chief that he saw smoke coming from the trees and went to investigate.While he later changed his testimony, I am satisfied that the fire did in fact spread to the trees and that Mr. Long was solely responsiblefor their burning. There is no question that the trees damaged by the fire, as well as those trees that remained unharmed were latermulched at the request of Mr. Long. Mr. Long was solely responsible for the destruction of the trees. He destroyed them knowing fullwell that they were the property of the plaintiffs and that the plaintiffs had not “abandoned” them.

In short, he converted the trees to hisown use and destroyed them. [Emphasis added] [11] After assessing damages in the main (which I will address under the cross-appeal), the trial judge turned her mind to Ms VanBurgsteden’s claim to punitive damages where Ms Van Burgsteden had alleged Mr. Long’s actions were “high-handed” and

“scandalous”. The trial judge acknowledged the law as set out by the Supreme Court of Canada in cases like Fidler v Sun Life AssuranceCo. of Canada, 2006 SCC 30, [2006] 2 SCR 3 and Whiten v Pilot Insurance Co., 2002 SCC 18, [2002] 1 SCR 595 [Whiten], and by thisCourt in Lynch v Hashemian, 2006 SKCA 126, [2007] 2 WWR 52, and then reasoned thusly, again referencing conversion: [62] In this case, I find the defendant’s conduct in destroying the trees was both malicious and high-handed. His actions wereintentional. He knew the trees belonged to the plaintiffs. He knew they formed a part of their landscaping business.

He knew this whenhe acquired the land and he knew it when he intentionally destroyed the trees. His actions amount to conversion. The claim for punitivedamages is well founded. [63] As pointed out at para. 74 of Whiten v. Pilot Insurance Co., supra, the governing rule with respect to the quantum of punitivedamages is proportionality. In this case, I find an award of $100 per tree to be an appropriate award for punitive damages. This amountsto $9,900. [Emphasis added] IV. APPEAL issues [12] Mr. Long says the trial judge erred in four ways in finding him liable as she did for the destruction of the trees: (

a) she determined liability on the basis of legal theories that were neither pled nor argued at trial; (

b) she found the arrangement between Ms Van Burgsteden and the Braggs was an irrevocable contractual license; (

c) she held the equitable principle of proprietary estoppel applied on the facts; and (

d) she found the trees had not been abandoned. [13] He also says the trial judge erred by awarding punitive damages against him in the circumstances. V. Analysis [14] I will address each of the issues raised in the appeal, although in a different order than raised by Mr. Long, beginning with thetheories of liability introduced by the trial judge. A. Theories of liability that were neither pled nor argued [15] I find considerable merit to Mr. Long’s first criticism of the trial decision: that the trial judge determined this matter on legaltheories not advanced in the statement of claim or at trial.

I have reviewed the statement of claim as well as the transcript of the trial. Thefact is in neither case did Ms Van Burgsteden advance the proposition that Mr. Long might be liable to her on the basis of a license andproprietary estoppel or on the basis of conversion. [16] In her bootstrap response to this circumstance, Ms Van Burgsteden says Mr. Long cannot assert that he has suffered prejudicebecause the pleadings claim and all of the evidence shows that the trees were hers and that Mr. Long improperly destroyed them. It is MsVan Burgsteden’s position that the trial judge properly found Mr.

Long had “converted the trees to his own use and destroyed them” andproperly awarded damages on that basis because this is exactly what she had pled. That is, I take her as saying, it matters not whichtheory of liability prevails provided Mr. Long knew he might be found liable for his actions on some theory of liability, even if it wereneither explicitly pled nor actually argued at trial. I see it differently. [17] The fact Mr.

Long was found liable for the destruction of the trees on two footings that first arose in the reasons for judgmentruns entirely contrary to a longstanding principle of law: No litigant should be put to a loss without having had a proper opportunity tomeet the case against him.

In North Western Salt Company Limited v Elecxtrolytic Alkali Company Limited, [1914] AC 461 (HL) at 476-477, Lord Moulton characterised this as follows: … [O]ur judicial procedure is based on the principle that in fairness a litigant should have due notice of the issues that are to be raised inorder that he may prepare himself with the evidence necessary to present his case fittingly to the Court, and it would indeed be strange tohold that this wholesome rule should be relaxed when he is charged with something so grave as acting against the common weal.

So, where a trial judge determines a matter on the basis of a legal theory that was not raised in the pleadings and was not argued at trial,the trial judge commits an error of law.

See: Online Constructors Ltd. v Speers Construction Inc., 2012 ABCA 132 at para 15, Alta LR(5th) 100; Sumner v PCL Constructors Inc., 2011 ABCA 326 at para 26, [2012] 1 WWR 649; Canada Trustco Mortgage Co. v Renard,2008 BCCA 343 at paras 38-39, 298 DLR (4th) 216; Northey-Taylor v Casey, 2008 ABCA 149 at para 9, [2008] 9 WWR 112; see also:Rodaro v Royal Bank of Canada (2002), (ON CA), 59 OR (3d) 74 (CA). [18] In Canada Trustco Mortgage Co. v Renard, Frankel J.A. described the principle in these terms: [38] Fairness requires that a trial judge not bring issues into litigation without giving the parties an opportunity to address them.

This is also reflected in Walker v. Blades, 2007 BCCA 436, 70 B.C.L.R. (4th) 226 at para. 16, and Rodaro v. Royal Bank of Canada, (2002), (ON CA), 59 O.R. (3d) 74 (C.

A) at paras. 60-62. In Walker, the trial judge erred in dismissing an action on the basisthat the plaintiff had repudiated the contract in issue, when repudiation had not been pleaded or argued. In Rodaro, the trial judge’s errorwas in granting judgment in favour of the plaintiff on a theory of liability that had not been pleaded or argued. [39] The common thread running through these authorities is the proposition that a party is entitled to know and respond to the case

against it, whether by the calling of evidence, or through submissions. This is particularly so when there is a question as to whether aparty is engaged criminal activity. In my view, the trial in the case at bar became unfair when the trial judge, acting on his own initiative,made a finding that Mr. and Mrs. Renard acted in concert with Mr. Glockl to defraud Canada Trustco.

In effect, the Renards werepronounced guilty of fraud, albeit on an application of the civil burden of proof, without having an opportunity to respond to allegationsagainst them. [19] In Rodaro v Royal Bank of Canada, Doherty J.A. had gone farther by saying: [60] It is fundamental to the litigation process that lawsuits be decided within the boundaries of the pleadings. As Labrosse J.A. saidin 460635 Ontario Limited v. 1002953 Ontario Inc., (ON CA), [1999] O.J.

No. 4071 at para. 9 (C.A.) (QL): ...The parties to a legal suit are entitled to have a resolution of their differences on the basis of the issues joined in the pleadings. Afinding of liability and resulting damages against the defendant on a basis that was not pleaded in the statement of claim cannot stand.

Itdeprives the defendant of the opportunity to address that issue in the evidence at trial. ... [61] By stepping outside of the pleadings and the case as developed by the parties to find liability, [the trial judge] denied RBC andBarbican the right to know the case they had to meet and the right to a fair opportunity to meet that case.

The injection of a novel theoryof liability into the case via the reasons for judgment was fundamentally unfair to RBC and Barbican. [62] In addition to fairness concerns which standing alone would warrant appellate intervention, the introduction of a new theory ofliability in the reasons for judgment also raises concerns about the reliability of that theory. We rely on the adversarial process to get atthe truth. That process assumes that the truth best emerges after a full and vigorous competition amongst the various opposing parties.

Atheory of liability that emerges for the first time in the reasons for judgment is never tested in the crucible of the adversarial process. Wesimply do not know how [the theory first raised in the trial judge’s reasons for judgment] would have held up had it been subject to therigours of the adversarial process. We do know, however, that all arguments that were in fact advanced by Mr.

Rodaro and weretherefore subject to the adversarial process were found wanting by [the trial judge]. [20] Therefore, I conclude the trial judge in this case erred in law by resting her finding of liability on two theories that had not beenpleaded or tested at trial. In this matter, as in Rodaro v Royal Bank of Canada, we know the trial judge also found no traction to thetheories of liability advanced in the statement of claim or argued by the plaintiff at trial.

As such, the trial judge’s error in this caserequires that the trial decision be set aside. [21] However, notwithstanding the foregoing conclusion, a trial decision may yet be sustained if, on an examination at the appellatelevel and after having received the submissions of appellate counsel, it is clear no other evidence would have been adduced at trial hadthe appellant been notified of the new theory of liability before trial or at trial and the correctness of the trial judge’s finding of liabilityon the basis of the fresh theory advanced in the judge’s reasons is borne out (see: Online Constructors Ltd. v Speers Construction Inc.,Sumner v PCL Constructors Inc., and, in particular, Rodaro v Royal Bank of Canada at paras. 58-71, Canada Trustco Mortgage Co. vRenard at paras. 31-42, and Northey-Taylor v Casey at paras. 13-18).

In other words, regardless of her error, if the evidentiary record iscomplete and the trial judge here were correct in her application of the law to the facts and thereby correctly found Mr. Long liable, thenthe result would nevertheless withstand appellate scrutiny. On the other hand, if Mr. Long were prejudiced by an inability to adduceevidence on the point or the trial judge were not correct in her finding of liability on both of the two fresh theories, then we would haveto dismiss the claim against Mr.

Long, as there would then be no remaining legal theory upon which to ground his liability for the loss ofthe trees. Here, Mr. Long has not taken issue with the evidentiary record, has not sought to adduce fresh evidence on appeal and has notsuggested he has lost a right of cross-examination on a point of evidence or suffered any similar prejudice. Rather, he says, under theremaining grounds of appeal, that the two fresh theories of liability are not borne out by the facts.

In that respect, I accept that theremaining questions for the Court are ones of law involving the application of the two legal theories to the facts. [22] Accordingly, I turn now to consider the remaining grounds of appeal. B. Irrevocable contractual license and proprietary estoppel [23] To start, Mr. Long takes no issue with the trial judge’s finding that the arrangement between the Braggs and Mr. Eckdahl andMs Van Burgsteden was a “gratuitous licence”. He says in law that is in all likelihood what it is, as among those individuals. So I willproceed from that basis. [24] Mr.

Long submits the trial judge’s theory of his liability based on gratuitous licence and the principles of proprietary estoppelfails because there is no actual relationship between him and Ms Van Burgsteden. He concedes he was aware she had placed trees on theland he then intended to acquire, but says there is no evidence of any agreement whatsoever as between him and Ms Van Burgsteden inregard to the trees. But, as we will see, a direct relationship is not required by the doctrine of proprietary estoppel. [25] The doctrine was recently considered in Clarke v.

Johnson, 2014 ONCA 237 at para 52, 371 DLR (4th) 618, where the courtsummarised the governing principles, based on the modern approach, as including: (

a) proprietary estoppel may form the basis of a cause of action; (

b) it is not essential that the historical approach involving the “five probanda” be satisfied (see: Willmott v Barber (1880), 15 Ch D96 (Ch Div) at 105-106), namely, that (1) the plaintiff must have made a mistake as to his legal rights; (2) the plaintiff must haveexpended some money or done some act on the faith of mistaken belief; (3) the defendant must know of the existence of his own rightwhich is inconsistent with the right claimed by the plaintiff (because the doctrine is founded upon conduct with knowledge of legalrights); (4) the defendant must know of the plaintiff’s mistaken belief of his rights; and (5) the defendant must have encouraged theplaintiff in his expenditure of money or in the other acts he has done; (

c) rather, only three elements need be established:

(

i) the owner of the land must have induced, encouraged or allowed the claimant to believe that he has or will enjoy some right orbenefit over the property; (ii) in reliance on his belief, the claimant must have acted to his detriment to the knowledge of the owner; and (iii) the owner must then have sought to take unconscionable advantage of the claimant by denying him the right or benefit that heexpected to receive; (

d) detriment includes expenditures but countervailing benefits may also be considered; (

e) reliance may be express or inferred; and (

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

See also Schwark Estate v Cutting, 2010 ONCA 61 at para 34, 316 DLR (4th) 105; Scholz v Scholz, 2013 BCCA 309 at para 31, 340BCAC 151; Trethewey-Edge Dyking (District) v Coniagas Ranches Ltd., 2003 BCCA 197 at paras 64-73, 224 DLR (4th) 611; ParkdaleNifty Fifties Seniors Assn. v Parkdale Community Assn., 2012 ABCA 301, 536 AR 301; Ford v Kennie, 2002 NSCA 140, 210 NSR (2d)50; Carling O’Keefe Breweries of Canada Ltd. v Anheuser-Busch Inc. (1986), 68 NR 226 (FCA) at para 36; Petrogas Terminals Corp. vShurygalo, 2013 SKQB 69, 413 Sask R 247; and see Ryan v Moore, 2005 SCC 38 at para 59, [2005] 2 SCR 53. [26] In Stiles v Tod Mountain Development Ltd. (1992), (BC SC), 88 DLR (4th) 735 (BCSC) at p 743, the courtsaid this of the principle of proprietary estoppel (see also: Montreal Trust Co. v Williston Wildcatters Co., 2002 SKCA 91 at para 47,[2002] 10 WWR 633, affirming 2001 SKQB 360): In my view Mr.

Stiles obtained a personal right, arising out of the agreement he made with Highland, by reason of the application of thedoctrine of estoppel. Lord Denning expressed the doctrine of estoppel in Amalgamated Investment & Property Co. Ltd. v.

TexasCommerce International Bank Ltd., [1981] 3 All E.R. 577 at 584 (C.A.): When the parties to a transaction proceed on the basis of an underlying assumption (either of fact or of law, and whether due tomisrepresentation or mistake, makes no difference), on which they have conducted the dealings between them, neither of them will beallowed to go back on that assumption when it would be unfair or unjust to allow him to do so.

If one of them does seek to go back on it,the courts will give the other such remedy as the equity of the case demands. (Emphasis added) This means that this court has a wide discretion to fashion a remedy where an equity is found to arise from an estoppel. As the PrivyCouncil said in Plimmer (at 314) [Plimmer v. Wellington (1884), 9 App. Cas. 699 (P.C.)], “...the Court must look at the circumstances ineach case to decide in what way the equity can be satisfied”. In this case, the estoppel is a proprietary estoppel. This is described in P.V. Baker & P. St. J.

Langan, Snell’s Equity, 29th ed. (London:Sweet & Maxwell, 1990) at 573-74: Proprietary estoppel is one of the qualifications to the general rule that a person who spends money on improving the property of anotherhas no claim to reimbursement....it is also capable of operating positively so as to confer a right of action. The term “estoppel”, thoughoften used, is thus not altogether appropriate. Yet the equity is based on estoppel in that one (

A) is encouraged to act to his detriment bythe representations or encouragement of another (

O) so that it would be unconscionable for O to insist on his strict legal rights. The courts have also expressed this equity “as operating through providing valuable consideration which in the circumstances establisheda contract... [or] as making a revocable licence irrevocable”: Ward v. Kirkland, [1966] 1 All E.R. 609 at 621 (Ch. Div.).

In Inwards v.Baker, [1965] 1 All E.R. 446 at 448 (C.A.), Lord Denning found that, even though there was no contract, ...if the owner of land requests another, or indeed allows another, to expend money on land under an expectation created or encouragedby the landlord that [the other party] will be able to remain there that raises an equity in the licensee such as to entitle him to stay. He hasa licence coupled with an equity. A licence is a personal right and does not represent an estate or interest in land but simply makes

an act lawful where it would otherwisebe unlawful: Wood v. Ledbitter (1845), 14 L.J. Ex. 161 at 164. But in Plimmer, supra, at 719, it was said that in some cases nothing shortof a “grant of the fee simple” would satisfy the equity arising out of a proprietary estoppel. In Inwards, the equity, in the form of an irrevocable licence to occupy, was found to be binding on the successors of the original owner ofthe land who took with notice (at 449). The underlying rationale is that “it would be unconscionable in the circumstances for a legalowner fully to exercise his legal rights”: Ward at 621.

That case involved the enforcement of an easement against the successor in title ofthe original owner of the servient tenement. Thus, where a party expends money on the land of another under an expectation created or encouraged by the owner, or even where thelandowner merely stands silent, the authorities establish that proprietary estoppel may found a cause of action, a revocable licence maybe rendered irrevocable, or the party’s interest may be found in a licence coupled with an equity, the circumstances may establish acontract between the parties, or equity may require that the fee simple be transferred.

The equity is enforceable against a successor intitle who takes with notice. [Emphasis in italics added.] [27] As is readily apparent, the doctrine of proprietary estoppel is both straightforward and applicable in the instant circumstances. Iwill explain. [28] Here, on the facts as found by the trial judge, Mr. Long encouraged Ms Van Burgsteden and Mr. Eckdahl to plant the trees onthe land in question. Albeit he was not then the owner of the land, he later became its owner in circumstances where he undoubtedly hadfull knowledge of the bargain Ms Van Burgsteden and Mr.

Eckdahl had struck with the Braggs with respect to the trees. Under that

bargain, the trees remained chattels and Ms Van Burgsteden retained ownership of them. In terms of the doctrine then, Mr. Long or theBraggs or all of them induced, encouraged or allowed Ms Van Burgsteden to believe she had or would enjoy a right or benefit over theland with respect to her trees. That is, she expected to enjoy the right or benefit of leaving the trees on the land unmolested by the ownerof the land until such time as the trees were sold to third parties and relocated.

In reliance on this belief, Ms Van Burgsteden, to herdetriment, bought wire baskets, placed the trees in those baskets and planted the trees in their baskets on the land. This was known to theBraggs and to Mr. Long. The Braggs made this arrangement known to Mr. Long before they entered into the sale agreement with himwith respect to the land. Mr.

Long then immediately sought to take unconscionable advantage of Ms Van Burgsteden by denying her theright or benefit that she expected to receive, and he ultimately did so when he destroyed the trees. [29] In my assessment the doctrine of proprietary estoppel draws a straight line through these facts and points to Mr. Long’s liabilityfor the destruction of the trees. In the circumstances of this case, where Mr. Long destroyed the trees very shortly upon taking ownershipof the property, it matters not whether the license is characterised as revocable or irrevocable.

His liability arises from his successfulefforts to take unconscionable advantage of Ms Van Burgsteden by denying her the right or benefit she expected to receive. [30] Accordingly, I find myself in agreement with the trial judge: it would be unconscionable to allow Mr. Long to insist on his strictlegal rights to destroy trees planted on his land in circumstances where he clearly knew the trees were owned by Ms Van Burgsteden andwere subject to the terms of her bargain with the Braggs. C. Conversion [31] Although not challenged in the Notice of Appeal, Mr.

Long’s first ground of appeal also raises an issue as to whether the trialjudge had correctly applied the law of the tort of conversion to the facts of this matter. I will briefly address that issue now. [32] In general terms, the tort of conversion occurs whenever some unauthorised person intentionally assumes and exercises therights of ownership over personal property belonging to another to the exclusion of the owner’s rights.

A person is said to convertpersonal property to his or her own use by manifesting an assertion of dominion over the personal property that is inconsistent orincompatible with the rights of the owner. In Kuwait Airways Corp. v Iraqi Airways Co (Nos 4 and 5), [2002] 2 AC 833 (HL) at 1084,Lord Nicholls of Birkenhead lately and neatly identified the three essential features of the tort of conversion as: (

i) the defendant’sconduct must have been inconsistent with the rights of the owner or other person entitled to possession of some personal property; (ii)that conduct must have been deliberate; and (iii) that conduct must have been so extensive an encroachment on the rights of the owner orother person as to exclude him or her from use and possession of the personal property. See also BOMA Manufacturing Ltd. v CanadianImperial Bank of Commerce, (SCC), [1996] 3 SCR 727. [33] Had Mr.

Long’s acts cumulatively fallen short of total destruction of the trees, he may have been found liable to Ms VanBurgsteden under the torts of trespass or negligence, the latter of which she had pled. On the facts, however, the total wilful destructionof the trees is conversion because Mr. Long’s acts of destruction mean Ms Van Burgsteden can no longer possess or use the trees orexercise her rights over them. [34] On the facts as found by the trial judge, Mr.

Long’s conduct was deliberate and knowingly inconsistent with Ms VanBurgsteden’s rights in and to the trees and his conduct completely deprived her of her rights to use and possess the trees. Therefore, I findthe trial judge correctly concluded Mr. Long committed the tort of conversion when he destroyed the trees. D. Abandonment [35] An assertion that a plaintiff has abandoned chattels and no longer has any interest in them should be a good defence to a claimof proprietary estoppel or conversion because those claims both assert possessory rights.

However, to constitute abandonment, aplaintiff’s actions or omissions must evidence a clear intention to desert or relinquish the chattels. As abandonment is a defence, the onusof proving it must rest with the defendant. [36] Here, as the trial judge concluded, the facts do not support a finding of abandonment because there is nothing to indicate MsVan Burgsteden or Mr. Eckdahl had given up the trees. Moreover, Ms Van Burgsteden and Mr.

Eckdahl appear to have consistentlyasserted their rights in the trees throughout this mess, albeit too physically in at least one instance. [37] The simple fact Ms Van Burgsteden did not remove the trees after receiving Mr. Long’s demands to do so does not, as Mr. Longcontends, constitute abandonment of the trees. This is faulty reasoning because it implicitly asserts as one of its premises that Ms VanBurgsteden had no right to leave the trees on the land or that, if she did, she did not want them.

His argument is a self-serving andcircular one which says: if Ms Van Burgsteden had wanted the trees she would have taken them, but since she did not take them she mustnot want them; therefore, she has abandoned them. [38] As such, like the trial judge, I find there is absolutely no factual basis to support Mr. Long’s submission that Ms VanBurgsteden had abandoned the trees. E. Punitive damages award [39] An award of punitive damages is an unusual remedy.

To qualify, a defendant’s behaviour must have been such that it is itselfdeserving of punishment as an independent actionable wrong (see: Barton v Potash Corp. of Saskatchewan Inc., 2013 SKCA 141 atparas 87-88, 369 DLR (4th) 275; Honda Canada Inc. v Keays, 2008 SCC 39 at para 62, [2008] 2 SCR 362 [Keays]; Whiten at para 82;and Vorvis v Insurance Corporation of British Columbia, (SCC), [1989] 1 SCR 1085 at 1105-1106 [Vorvis], whichrequires “malicious, oppressive and high-handed misconduct that offends the Court’s sense of decency”, see: Sylvan Lake Golf & TennisClub Ltd. v Performance Industries Ltd., 2002 SCC 19 at para 79, [2002] 1 SCR 678 [Sylvan Lake].

In Vorvis (at 1108), the Courtcharacterised conduct meriting an award of punitive damages as being “harsh, vindictive, reprehensible and malicious” or “extreme in itsnature and such that by any reasonable standard it is deserving of full condemnation and punishment”. Regardless, punitive damages

ought to be awarded in rare circumstances where the award would serve the non-compensatory aims of “retribution, deterrence and denunciation” ( Sylvan Lake at para 87 ) and thereby might also serve to raise standards of conduct. [ 40 ] Regardless of how the conduct is characterized, a determination of this nature can only occur after the most careful consideration of the circumstances and the most cautious exercise of discretion, see: Vorvis , at 1104-1105.

In simple terms then, the courts will award punitive damages with restraint and only in exceptional cases where the nature of the conduct itself amounts to an independent actionable wrong. [ 41 ] In her reasons, the trial judge found Mr. Long’s conduct in destroying the trees was “malicious and high-handed”. She noted that his actions were “intentional” and that “[h]e knew the trees belonged to the plaintiffs” when he bought the land and when he destroyed the trees. From this, she reasoned that the claim for punitive damages was well-founded, but I must respectfully disagree with the trial judge because Mr.

Long’s conduct, albeit unacceptable, does not amount to the independent actionable wrong required for an award of punitive damages, as I will explain. [ 42 ] As noted, the bases upon which the trial judge found Mr. Long liable to pay compensatory damages to Ms Van Burgsteden were twofold: proprietary estoppel and conversion. Under each theory, Mr. Long’s liability was predicated on actions he took to intentionally deprive Ms Van Burgsteden of her trees.

In general terms, given the nature of the doctrine of proprietary estoppel and the tort of conversion, I expect a plaintiff’s success thereunder would usually require proof that a defendant has intentionally conducted herself in a manner that attracts condemnation. The question is whether the conduct in question is itself an actionable wrong that calls for an award of punitive damages.

Here, the trial judge seems not to have asked that question or to have undertaken that inquiry. [ 43 ] When examined in light of the standard set forth by the Supreme Court of Canada in cases like those noted above, I cannot conclude that Mr. Long’s actions attract an award of punitive damages. True, he destroyed the personal property of another whilst knowing it was not his property, but he is liable for that conduct under the tort of conversion and the doctrine of proprietary estoppel.

While his actions were precipitous after he took ownership of the lands, the fact remains that he deprived Ms Van Burgstden of her trees only after giving her clear notice of his intention to do so if she failed to remove the trees from his land, which he repeated several times over the course of two years and lastly in writing through a lawyer. In depriving her of the trees, he exercised his legal rights as the holder of title in fee simple to the lands on which the trees were planted.

While he was equitably estopped from doing so and legally liable to Ms Van Burgsteden for doing so on the theories of liability raised by the trial judge, he did successfully defend his actions against the claim as framed and argued by Ms Van Burgsteden. Finally, I note Mr. Long’s conduct during the course of this litigation was not such that it attracted an award of solicitor-client costs, as Ms Van Burgsteden had sought (see the trial decision at paras. 64-67); therefore, it is safe to assume the trial judge did not consider Mr. Long’s actions as being disrespectful of the administration of justice. In sum, Mr.

Long’s conduct with respect to the trees is worthy of censure, but it is not “malicious, oppressive and high-handed misconduct that offends the Court’s sense of decency” or so “extreme in its nature and such that by any reasonable standard it is deserving of full condemnation and punishment” as an independent actionable wrong. F. Conclusion [ 44 ] It follows that, while Mr. Long’s appeal must be allowed with respect to the punitive damages award, the findings of liability under the doctrine of proprietary estoppel and under the tort of conversion must be sustained.

I would turn now to address Ms Van Burgsteden’s cross-appeal. VI. Cross-Appeal ISSUES [ 45 ] In her reasons, the trial judge assessed the evidence before her and calculated Ms Van Burgsteden’s damages for the loss of the trees thusly: [52] The purpose of awarding damages is to place a plaintiff in the same position they would have been but for the wrongful actions of the defendant.

In this case, Marlene VanBurgsteden would have had 99 trees, spaded and in 44 inch baskets, awaiting sale but for the wrongful actions of David Long. [53] I accept the evidence of Marlene VanBurgsteden that the average height of the trees that were destroyed was 11 feet. Some trees were taller and some were shorter. Irvin Johns and Bruce Zosel testified that not all of the trees owned by Marlene VanBurgsteden were saleable.

Their evidence with respect to the condition of the trees is of limited assistance given their personal knowledge of the trees and their “analysis” which occurred after the trees were destroyed. Nevertheless, I do accept that some of the trees were too sparse, too tall or in poor condition and would not have sold. [54] I do not accept the suggestion of counsel for the defendant that the value of the trees should be equated to the price paid by Marlene VanBurgsteden when she purchased the trees in October, 2004.

Firstly, the trees were purchased at auction which is a far different scenario than a sale to clients in the context of a landscaping business. Secondly, the trees had grown since their purchase and that would have added to their value. Thirdly, the plaintiffs had put the trees in baskets and replanted them on the Bragg property which also would have affected their value. [55] I find the best evidence of the “value” of the trees was that provided by George Lewko, PAg. Mr. Lewko looked at the cost of replacing the trees. He got four different quotes from growers in nurseries throughout northern Saskatchewan.

The quotes were as follows: Dutch Growers $83,553.87 Northern Nurseries $105,138.00 Gaudet Tree Farms $55,106.57

Sawyer’s Tree & Landscaping $122,296.65 [56] The quotations were for 10 foot trees. The evidence establishes that an 11 foot tree would cost an additional $200. In addition tothe price of the trees, the quotes included the costs of installation, including delivery. Based on the proximity of the various businesseswho quoted, I find that the quote from Gaudet Tree Farms would be the most realistic as that business was the closest in proximity to theplaintiffs’ business. That quote was for $55,106.57.

Because the trees were 11 feet tall, I accept that they would be worth $200 per treemore than the 10 foot trees quoted for. This brings the ultimate quote from Gaudet’s to $74,906.57. That amount would have to bediscounted to take into consideration the fact that some of the trees were not saleable. I find a discount factor of 25% would beappropriate which would bring the damages suffered by Ms. VanBurgsteden to $56,179.93. [57] While Marlene VanBurgsteden argued additional damages should be awarded for lost business revenue, the evidence does notsupport that claim.

There was no evidence that any contracts were outstanding or were lost as a result of the destruction of the trees.Moreover, Ms. VanBurgsteden can use the monies awarded her pursuant to this judgment to replace the trees she lost. In doing so, shewould be in exactly the same position she was before the trees were destroyed.

Those trees could be sold and the same opportunities toobtain additional revenue for transporting, planting, landscaping, maintenance and care would attach to the new trees as attached to thetrees that were destroyed. [46] Ms Van Burgsteden does not challenge the trial judge’s finding that $55,106.57, as quoted by Gaudet Tree Farms, was theappropriate base valuation for assessing her damages. Nor does she dispute the additional $200 per tree the trial judge assessed asdamages because the destroyed trees were 11-foot, as opposed to 10-foot, trees.

Ms Van Burgsteden cross-appeals only from the decisionof the trial judge to reduce her damages by 25% to account for the trial judge’s finding that some of the trees were not saleable. Inparticular, Ms Van Burgsteden says the reduction is in error because it is unsupported by the evidence. [47] This Court is empowered by s. 12(1) of The Court of Appeal Act, 2000, SS 2000, c C-42.1, to set aside awards of damages madeby a trial judge.

The standard of appellate review of awards of damages was described by McIntyre J., speaking for the Court in Woelk vHalvorson, (SCC), [1980] 2 SCR 430 at 435-36, in these terms: It is well settled that a Court of Appeal should not alter a damage award made at trial merely because, on its view of the evidence,it would have come to a different conclusion.

It is only where a Court of Appeal comes to the conclusion that there was no evidence uponwhich a trial judge could have reached this conclusion, or where he proceeded upon a mistaken or wrong principle, or where the resultreached at the trial was wholly erroneous, that a Court of Appeal is entitled to intervene. The well-known passage from the judgment ofViscount Simon in Nance v. British Columbia Electric Railway Co. Ltd., [ (UK JCPC), [1951] AC 601] at p. 613, —approved and applied in this Court in Andrews v. Grand & Toy Alberta Ltd.[ (SCC), [1978] 2 SCR 229] — provides ampleauthority for this proposition.

He said: The principles which apply under this head are not in doubt. Whether the assessment of damages be by a judge or a jury, theappellate court is not justified in substituting a figure of its own for that awarded below simply because it would have awarded a differentfigure if it had tried the case at first instance.

Even if the tribunal of first instance was a judge sitting alone, then, before the appellatecourt can properly intervene, it must be satisfied either that the judge, in assessing the damages, applied a wrong principle of law (as bytaking into account some irrelevant factor or leaving out of account some relevant one); or, short of this, that the amount awarded iseither so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage... [Emphasis added.] [48] Turning to the evidence that was before the trial judge, I find she had sufficient support for her assessment of the damages inthis case and, specifically, to reduce the damages award as she did.

Contrary to Ms Van Burgsteden’s submission, the trial judge heardevidence as to problems with the saleability of the trees. In particular, the trial judge heard from Irving Johns, the owner and operator ofJohns Nursery and Landscape with at least 30 years’ experience growing Colorado spruce trees. He testified that some of the trees ownedby Ms Van Burgsteden were “fairly tall and skinny” and “not good enough quality for landscaping” and would be “rejected” as too “talland skinny”.

The trial judge also heard from Bryce Zosel, an experienced tree farmer and landscaper and a certified arborist with 40years’ experience growing Colorado spruce trees. He testified he was unlikely to purchase trees like some of those owned by Ms VanBurgsteden because they were “not up to spec with quality or branching habit”, were not “branched” nicely enough, or were “missingbranches in the middle and the bottom”. Importantly, when Mr. Zosel was asked in examination-in-chief whether he would be able to selltrees like that in his landscaping business, he replied: “Not likely.

They’d probably just sit there.” [49] On the basis of this evidence alone I am unable to conclude there was no evidence upon which the trial judge could havereached her conclusion that the overall award ought to be reduced by 25% to account for unsaleable trees. Therefore, as I find no basisfor it, I would dismiss the cross-appeal. VII. disposition [50] In sum, I would allow the appeal in part and dismiss the cross-appeal. I would set aside the judgment of the trial judge as itrelates to punitive damages but otherwise the decision is sustained on appeal.

As the parties have experienced mixed success in thisCourt, I would make no award of costs. DATED at the City of Regina, in the Province of Saskatchewan, this 14th day of November, A.D. 2014.

“Caldwell J.A.” Caldwell J.A. I concur. “Ottenbreit J.A.” Ottenbreit J.A. I concur. “Whitmore J.A.” Whitmore J.A.