An issue that may arise during the administration of a deceased’s estate is dealing with promises that the deceased made prior to death in respect of the gifting of property, which are subsequently left out of the deceased’s will.
Where a person, who was promised certain property of a deceased, later learns that such a promise was not included in the deceased’s will, it can be cause for a contentious estate administration.
Verbal promises made by a deceased prior to his or her death in respect of the inheritance of property, are not testamentary dispositions and the estate trustee is not bound to abide by such promises when distributing the assets of the deceased’s estate. The estate trustee appointed under the will has the responsibility to distribute the estate according directions contained in the will, not according to promises made outside of it.
However, there are limited circumstances where the courts will intervene under their equitable jurisdiction to enforce promises in the name of fairness. One such equitable doctrine that has gained increased consideration in Ontario is that of proprietary estoppel. This doctrine focuses on enforcing promises where it can be shown that someone acted to their detriment in connection with a promise and that the promise is subsequently reneged upon.
A recent case decided by the Ontario Superior Court of Justice that illustrates the use of proprietary estoppel is Cowderoy v Sorkos Estate, released June 4, 2012.
The facts of this case are summarized as follows:
Gus was in a common-law relationship with Victoria, that ended in 2001 when Victoria died. Gus did not have any children, but he established a very close relationship with two of Victoria’s grandchildren, Paul and Mark.
At some point in 1985, when Paul was 17 and Mark was 13, Gus requested that they provide unpaid work for him on his farm and cottage and in exchange Gus promised that he would leave the properties to them in his will. All the parties agreed to the arrangement, which was corroborated by evidence led by other parties.
Paul and Mark provided the extensive labour on the farm and the cottage properties in exchange for the promise made by Gus. The work, which included digging, planting, building and maintaining the properties, continued for a period of 25 years, up to the date of Gus’ death. Subsequent to his death, Paul and Mark learned that they were not in fact left the promised properties in Gus’ will.
Paul and Mark successfully established a claim against Gus’ estate on the basis of proprietary estoppel. Three elements are required to establish a claim of proprietary estoppel , as set out in Schwark Estate v Cutting 2010 ONCA 61 (CanLII), 316 D.L.R. (4th) 105:
- encouragement of the plaintiffs by the defendant owner;
- detrimental reliance by the plaintiffs to the knowledge of the defendant owner; and
- the defendant owner now seeks to take unconscionable advantage of the plaintiff by reneging on an earlier promise.
The Judge, in deciding in favour of Paul and Mark, noted that:
“In my view, when making out his December 17, 2003 Last Will and Testament purporting to leave the farm and cottage properties to his residuary beneficiaries, Gus was no longer legally in a position to do so. To hold otherwise would be unconscionable to these Plaintiffs who had partially altered their lives for more than 25 years to Gus’ benefit and to their detriment. The degree to which they had so altered their lives is akin to ‘putting Humpty Dumpty back together again.’ It is impossible.”
In result, the Court ordered that the cottage and farm properties be conveyed to Paul and Mark.
The takeaway from this case is that, one should be weary of making empty promises for the conveyance of property where the beneficiary or beneficiaries relying on the promises act to their detriment in performing their end of the bargain. A claim made to enforce the promises on the estate of a deceased can end up being a costly process that depletes estate assets and may ultimately result in a different distribution than that contemplated by a deceased’s will.