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 possibleowner 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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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