Be careful what you promise: Proprietary estoppel in Cowper-Smith v Morgan

Proprietary estoppel provides one of equity’s most powerful remedies. Estoppel is an equitable doctrine which arises when one party acts on the reliance of the promise of another. The promise and corresponding reliance creates a quasi-contract with reliance acting as an alternative to the consideration usually required in contracts. Proprietary estoppel is distinct from other equitable estoppels in that a proprietary estoppel can act as a ‘sword’ and form the basis of a cause of action. If all of the parts of proprietary estoppel are made out, a court can modify or create property rights to satisfy the equity. With regard to the Canadian experience, the Court of Appeal for Ontario recently noted that proprietary estoppel has received “somewhat uneven treatment in Canada.” It is within this context that the Court of Appeal for British Columbia split on the proper scope for the Supreme Court of Canada. In Cowper-Smith v Morgan, the Supreme Court of Canada has both clarified the test for — and arguably expanded the scope of — proprietary estoppel in the context of promises exchanged between children over their mother’s care during her lifetime. The fact that a party lacks an interest in the disputed property at the time of the promise does not negate the obligation of fulfilling the promise. Instead, when the party responsible for the expectation has or acquires sufficient interest in the property, proprietary estoppel will attach to that interest and protect the equity. This article will discuss the law of proprietary estoppel in other jurisdictions and how the Supreme Court of Canada has infused this remedy with greater flexibility to satisfy the equity.