There could be reliance on promise to convey interest by someone whose interest was uncertain

Elderly mother had two adult sons, N and M, and adult daughter, G. In April 2001, mother made Declaration of Trust, transferring house and other assets into her own and G’s names in joint tenancy, and made will naming G executrix, trustee and beneficiary of half of estate, with balance to M and N if G saw fit. In 2007, M moved from England to look after mother on G’s assurance that G would sell him her one-third interest in house. M looked after mother until her death in August 2010. G took no steps to divide estate. N and M brought successful action for declarations that G held mother’s home and investments in trust for estate and that M was entitled to purchase G’s one-third interest in home, and for order distributing home and investments in accordance with 2002 will. Trial judge held that M acted to his detriment in moving from England to look after his mother, relying on G’s agreement to his conditions for move, and that, in doing so, M acted reasonably. Trial judge also held that M’s right to purchase G’s one-third interest in house was minimum required to satisfy equity. G was successful in part on appeal. Court of Appeal ruled that trial judge erred in finding that M acquired right to acquire G’s share by proprietary estoppel. Assurance given by G to M was based on uncertainty so as to undermine any claim based on proprietary estoppel. There could not be reasonable reliance on promise to convey interest by someone who did not have such interest or whose interest was uncertain. M appealed. Appeal allowed. Trial judge was correct. Proprietary estoppel was established. G made representation in promising to sell her interest in home, and M expected to enjoy right or benefit over property through that promise. M suffered detriment through all that he gave up to move to care for his mother. It was reasonable for M to rely on that expectation even though G did not have interest in house at time promise was made. Reasonableness is circumstantial. It would be out of step with equity’s purpose to make hard rule that reliance on promise by party with no present interest in property can never be reasonable. That G did not own an interest at time of M’s reliance was not barrier to the success of proprietary estoppel claim. As soon as G received interest in property promissory estoppel will attach.

Cowper-Smith v. Morgan (2017), 2017 CarswellBC 3482, 2017 CarswellBC 3483, 2017 SCC 61, 2017 CSC 61, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.); reversed (2016), 2016 CarswellBC 1238, 2016 BCCA 200, Saunders J.A., D. Smith J.A., and Willcock J.A. (B.C. C.A.).