Estop and Think Before Relying on Future Estate Interests

Proprietary estoppel is a legal doctrine that protects parties who detrimentally rely on assurances made by others about their property.  The doctrine is intended to prevent parties from profiting by misleading others.

While the former English interpretation of proprietary estoppel was stringent and specific, recent Canadian decisions have crafted more liberal criteria for applying the doctrine.  However, the recent decision of Cowper-Smith v Morgan, 2016 BCCA 200 [Cowper-Smith] might signal a return to a more-stringent application of proprietary estoppel.

In Cowper-Smith, the Defendant (Gloria) offered her brother (Max) an option to purchase her one-third interest in their Mother’s Estate if he returned from England to take care of their Mother (Elizabeth).  As Elizabeth was not deceased at the time of Gloria’s offer, Gloria did not yet own the one-third interest, but would receive it upon her Mother’s death.  Max agreed and cared for Elizabeth until she passed away, at which time he attempted to exercise his option to purchase Gloria’s interest in the Estate.  She refused.

While the BC Court of Appeal agreed that proprietary estoppel required a representation by a property owner, and reliance on this representation, they limited proprietary estoppel’s scope to actual owners of property.

Dismissing Max’s argument, the Court held that, since Gloria’s estate interests were not legally vested until Elizabeth’s death, Gloria was only a possible owner of the property.  The Court then warned that a potential beneficiary of an Estate (a possible owner) was not a true/ actual owner of property and thus was protected from proprietary estoppel claims with respect to property that has not yet been received.

The Cowper-Smith case indicates that, before relying on a promise made in respect of property, one should ensure that the promisor owns the property that is being promised.  The case, therefore, appears to mark a more-stringent and specific application of proprietary estoppel.

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