What is the test for an equitable charge or lien against a claimant who has expended money on part of his land on faith that part of the land will be made over to the claimant?

Ontario, Canada


The following excerpt is from Romspen Investment Corporation v. Woods Property Development Inc., 2011 ONSC 3648 (CanLII):

I do not think that this principle is limited in operation to circumstances in which a claimant has an honest belief in his or her right to acquire the subject property. It is framed more broadly in Chalmers v. Pardoe, [1963] All E.R. 552 (P.C.) as follows: There can be no doubt on the authorities that where an owner of land has invited or expressly encouraged another to expend money on part of his land on the faith of an assurance or promise that that part of the land will be made over to the person so expending his money a court of equity will prima facie require the owner by appropriate conveyance to fulfil his obligation; and when, for example for reasons of title, no such conveyance can effectively be made, a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended.

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