What Is a Proprietary Estoppel Claim?
Unfortunately, it is all too common that promises made are promises broken. And this is no exception in British Columbia wills variation cases. Oftentimes, a parent or parents will promise their children an even share in the estate upon their death. But when one sibling promises to sell their share to another in exchange for an act, deed, etc., then later breaks that promise, is there anything the family can do? That is the question in proprietary estoppel claims.
What Is a Proprietary Estoppel Claim?
Proprietary estoppel works to enforce the terms of a promise made. In order to utilize proprietary estoppel in an estate litigation case, three conditions must be met.
- A promise or assurance is made to which the claimant expects to enjoy a right or benefit over property;
- The claimant reasonably relies on the promise, and this reliance is reasonable in light of the circumstances; and
- The claimant suffers a detriment as a result of this reasonable reliance so that it would be unjust for the party who initiated the promise to go back on their word.
Courts have questioned if a person who makes the promise is not the owner at the time the promise was made, does proprietary estoppel apply?
Cowper-Smith v. Morgan: An Argument for Reasonable Belief, Reliance
In the Supreme Court of Canada case Cowper-Smith v. Morgan, 2017 SCC 61, the parties debated whether proprietary estoppel applied.
Elizabeth and Arthur Cowper-Smith were married and had three children, Gloria, Max, and Nathan. Before Arthur’s death, he explained to his children that he and his wife intended to divide their estate equally among them. Elizabeth maintained these sentiments after her husband’s death.
In 2005, Elizabeth’s health declined so much that she needed home care. Though Gloria lived in the area, she made an arrangement with her brother, Max, who had been working and living in the UK.
If Max moved back to the family home to care for their mother, he would be able to buy Gloria’s share for the family home upon Elizabeth’s death. Max agreed and moved back home to care for their aging mother. Elizabeth later passed-on.
However, it was discovered eight months after Elizabeth’s death, Elizabeth had made changes to her estate plan that included that the title of the home, investments, etc. were to be transferred solely to Gloria, which she also held as an executor for her mother. A judge later determined this was a result of undue influence. But because of this, Elizabeth’s assets did, in fact, go to Gloria.
In turn, Gloria went back on her promise to Max and listed the family home for sale, even though he was still residing there. Following litigation, Max and Nathan claimed on the basis of proprietary estoppel that Max was entitled to hold Gloria to her word.
Though the British Columbia Court of Appeal held that proprietary estoppel was not applicable as Gloria did not own an interest in the family home at the time she made her promise, the case was appealed to the Supreme Court of Canada.
The Supreme Court of Canada found that proprietary estoppel may be established where a claimant reasonably relied on an expectation that he will enjoy the property, even if the party making the promise did not own an interest in the property at the time of the claimant’s reliance.
Because of the prior discussions between the parents and children, it makes sense that Max and Nathan had a reasonable belief that the property would have been divided into thirds and the promise made by Gloria would be upheld.
While the courts now have a guidepost on cases of proprietary estoppel, you should not handle these issues alone. They involve complex legal issues which an experience Wills & Estates lawyer can handle.
Proprietary Estoppel and Wills Variation: Klein Lawyers
Be it disinheritance, broken promises, or undue influence, the loss of a family member is already difficult to bear. But when the loss of a loved one is accompanied with issues within the family on the distribution of the estate, you need to work with an experienced lawyer who is committed to winning the maintenance and support you deserve.
Contact Klein Lawyers at (604) 874-7171 today for a free, confidential case evaluation. Our wills variation lawyers serve clients throughout British Columbia from offices in Vancouver, Abbotsford, Burnaby, Coquitlam, Langley, and Surrey.