Proprietary Estoppel: Broken Promises in Estate Planning

Unfortunately, people break their promises, sometimes with vast consequences suffered by one party. In estate related matters, people can make life-changing decisions based on promises made to them. When a promise is made, but the promisor’s will says otherwise, or they simply change their minds, those who are victim to the broken promise may have reasonable grounds to challenge the estate.

Elements of Proprietary Estoppel

In BC, the courts will look for three elements in determining whether proprietary estoppel is evident or not:

1. A promise is made,
2. That promise was reasonably relied on, and
3. Due to this reliance, the claimant suffered detriment when the promise was broken.

These elements can seem awfully vague; however, we’ll analyze two different cases in BC to help establish the extent to which these elements must be satisfied.

Will-Writer Said One Thing, the Will Says Another

The case of Sabey v. Rommel (2014) featured a farm employee, Sabey, who had a proprietary estoppel case when he was promised he would inherit the farm by the owner. In exchange, Sabey would be payed less for his work relative to the other employees on the farm. After the owner had passed away, her will specified that the farm was to be given to someone else. Sabey had a very close relationship with the farm owners as he lived on the farm, took horseback riding lessons on the farm and helped maintain the farm before the owners’ deaths. The court went through each of the three elements of proprietary estoppel in determining if the will should be modified to fix the broken promise.

When deciding whether a promise was made or not, the courts examine whether an assurance or representation was made by the owner that the claimant will have some right to the property. The promise can be made simply through words or conduct and does not need to have the elements of a valid contract. As evidence, Sabey had an invalid codicil left by the owner stating that Sabey was to inherit the farm. The codicil was invalid because it was not properly witnessed. The courts determined that it was clear a promise was made with an assurance that Sabey would inherit the farm.

Looking at the second element, the judge had to determine whether it was reasonable for Sabey to rely on this promise. Based on the invalid codicil evidence, it was clear that it was reasonable for someone in Sabey’s position to believe that they would inherit the farm. Further, the judge ruled that Sabey had in fact relied on this promise because it “altered his position or changed his course of conduct because of the assurance that he would inherit the farm.” Sabey had chosen not to pursue a professional dressage career path, got a job at a company near the farm and gave a significant amount of time and labour to maintain the farm because of this promise. This made it clear to the courts that Sabey had relied on this promise.

The final element, detriment, was satisfied because through Sabey’s reliance on the promise and significant pay reductions, he suffered detriment when he did not inherit the farm in return. In essence, he was taken advantage of by relying on the promise.  In the end, the courts ruled that Sabey had a successful claim for proprietary estoppel and was entitled to receive $100,000 from the estate. Sabey’s years of underpaid/unpaid work were the only factors used for determining the equity that he should receive. His personal career choices did not warrant equity as per the judge’s decision – this is why Sabey did not receive the entire farm to remedy the situation.

Promises Broken Between Beneficiaries

The case of Cowper-Smith v. Morgan (2017) was argued before the 9 judges of the Supreme Court of Canada by League and Williams’ Darren Williams. This case featured proprietary estoppel between the beneficiaries of a will, not between a beneficiary and the will-writer. Two of the three children of the deceased established a promise wherein one of the sons, Max, would move back to the mother’s home to care for the aging mother until her death. The promise was that when the mother passes away, Max’s sister, Gloria, would sell her share of the estate home to Max. To further complicate the case, after their mother had died, Max and his brother were invalidly disinherited from the will altogether because of undue influence exercised by Gloria. In the end, the will was varied and each child received a third share of the estate, as was expected. For more detail on this disinheritance case, read our blog post here.

After receiving his share of the estate, Max was still looking for legal remedy in regard to the broken promise made by Gloria. It was evident that after the promise was made to Max, he relied on the promise by moving back to Victoria, and suffered detriment by leaving his life in England because of this promise. The case debated whether it was reasonable to rely on the promise when there was not complete certainty that Gloria would own the one third share of the estate. Gloria argued that Max’s reliance on her promise was unreasonable because at the time the promise was made they could not know, with complete certainty, that that she would inherit her share of the estate. However, the court found that Max had acted reasonably in relying on the promise because he did so knowing, with reasonable certainty, that Gloria would inherit a portion of the estate home. Events which could have possibly interfered with Gloria’s inheritance of her share, which are unforeseeable in their nature, do not diminish the reasonable certainty that the estate would be executed as planned at the time the promise was made. In the end, the court ruled in favour of Darren William’s case on behalf of Max, and Gloria was forced to sell her share of the estate home to Max.

In reviewing each of these two cases, we hope to bring light to those who have fallen victim to a broken promise in any estate related matter. If the elements of proprietary estoppel can be demonstrated before the courts, the broken promisor can be held liable, even in cases where a promise to the victim was made verbally.

If you were victim to an estate related broken promise, contact an experienced estate lawyer today. We will ensure that you receive the inheritance that you’re entitled to, whether that is through a proprietary estoppel case or not.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.