Tag: case law

23 May

Hull on Estates #520 – Role of The Estate Trustee During Litigation

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This week on Hull on Estates, Ian Hull discusses the role of the Estate Trustee During Litigation and the impact of case law over the last 50 years.

 Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.
19 Dec

Will the SCC Expand the Scope of Proprietary Estoppel?

Ian Hull Estate & Trust, Estate Planning, Executors and Trustees, General Interest, In the News, Litigation, News & Events, Trustees, Uncategorized, Wills Tags: , , , , , , 0 Comments

Last week, we discussed Cowper-Smith v Morgan, and considered when the presumption of undue influence is rebutted by legal advice. Today, we discuss the availability of the doctrine of proprietary estoppel in the circumstances of this case (the issue which the Supreme Court of Canada (“SCC”) has granted leave to hear on appeal from the British Columbia Court of Appeal (“BCCA”)).

Brief Recap
The trial decision found that the son of the deceased, Max, had relied to his detriment on a promise made by his sister Gloria.  Gloria had enticed Max to return from England to care for his ailing mother in her home by entering into an agreement to, among other things, sell Max her 1/3 interest in the home that she would inherit on her mother’s death. On the mother’s death, Gloria reneged. The trial judge, on the basis of proprietary estoppel, directed that Max was entitled to buy Gloria’s share of the property.

The BCCA decision (Smith J. dissenting on the proprietary estoppel finding), found that Max had not met the test in order to apply the doctrine. In short, the BCCA found that the remedy of proprietary estoppel could not arise as a result of assurances given by Gloria (a non-owner) with respect to her future intentions.

It is the question of whether the doctrine of proprietary estoppel applies in these circumstances that wil02FAEBOQ2Gl be considered by the SCC.

The full facts of the case can be found in last week’s blog.

The Availability of Proprietary Estoppel
The BCCA applied the elements of the modern doctrine of proprietary estoppel as (in para 73 of the decision):

  1. an assurance or representation by the defendant that leads the claimant to form a mistaken assumption or misapprehension that he or she has an interest in the property at issue;
  2. a causative connection between the assurance or representation and the claimant’s reliance on the assumption such that the claimant changes his or her course of conduct;
  3. a detriment suffered by the claimant that flows from his or her reliance on the assumption, which causes the unfairness and underpins the proprietary estoppel; and
  4. a sufficient property right held by the defendant that could be transferred to satisfy the right claimed by the claimant.

In Ontario, the modern approach was established in the case of Schwark v Cutting, 2010 ONCA 61. Three factors must be present for proprietary estoppel:

  1. the owner of the land induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the property;
  2. in reliance upon this belief, the claimant acts to his detriment to the knowledge of the owner; and
  3. the owner then seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive.

The Matter for Debate
The BCCA found, in a 2-1 decision, that the doctrine of proprietary estoppel did not apply. The BCCA found that the trial court unreasonably expanded the scope of the doctrine by finding that Max could rely on Gloria’s assurance that he could buy her 1/3 interest in the property.

The majority found that Gloria’s assurance did not equate to unconscionable conduct: her obligations arose solely based on her mother’s actions and death and, as such, Max never had a proper basis to rely on Gloria’s promise: the property was not hers to give away at the time the assurance was made.

The dissenting opinion of Justice Smith proposed a solution to this dilemma by noting that, because of her cognitive deterioration, there was no possibility that the mother would have changed or rescinded the transactions that conveyed the property to Gloria on her death.  As such, “Gloria’s ownership of the Property by the right of survivorship and the Declaration of Trust was therefore certain, despite not actually being owned by Gloria at the time of the promise to Max.”

It will be interesting to see how the SCC approaches this issue.

Thanks for reading,

Ian M. Hull

Other Articles You Might Enjoy

A Primer on Proprietary Estoppel

Proprietary Estoppel Revisited: Cowderoy v. Sorkos Estate

Proprietary Estoppel – A Court Enforced Promise

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