The recent Ontario case of Cowderoy v. Sorkos Estate released June 4, 2012 is an interesting decision by Justice Tausendfreund of the Ontario Superior Court of Justice. The case explains and applies an almost 150 year old equitable doctrine that has seen increasing discussion and judicial comment in recent years: proprietary estoppel.
The facts of the case can be summarized as follows.
Gus Sorkos was born in Greece. He emigrated to Canada as a young man. Gus found work as short-order cook in London, Ontario where in 1960, he met and fell in love with Victoria Cowderoy who was a waitress at the same restaurant.
Gus and Victoria commenced a common–law relationship which lasted over 40 years and ended when Victoria died in January 2001.
Gus did not have any children of his own. Victoria had two grandsons- Paul and Mark Cowderoy who became very close with Gus. Their relationship was one of grandfather and grandchildren.
Gus and Victoria worked hard and saved enough to acquire some considerable wealth including a farm and a cottage property. Gus also owned a restaurant. Paul started working at the restaurant when he was 12 and Mark started when he was 8. They worked as bus boys, dishwashers and when they were older, as bartenders.
In 1985, when Paul was 17 and Mark was 13, they had a breakfast with their adopted grandfather Gus that was to change their lives. At that breakfast, Gus told Paul and Mark that he would be asking them to do a lot of work for him on the farm and at the cottage. They would not get paid for their work, but, Gus promised them he would leave them these properties in his will. The boys agreed . They all shook hands to seal the deal.
Over the years, Gus would renew his pledge to leave them the farm and cottage. He would do this according to the boys at least once a year.
In exchange for Gus’ promise, Paul and Mark worked the farm. The work included planting trees, cleaning the pond, digging trenches, ploughing the fields, gardening and doing maintenance on the farm buildings. At the cottage, they cut the grass, built a deck, demolished an old cottage, painted and opened and closed the cottage each year.
Paul and Mark did this work for Gus until he died, almost 25 years.
Unfortunately, Gus did not follow through in his will. After their grandmother Victoria died, Gus remarried. In his last will he left the following:
- $ 250,000.00 to his new wife
- $ 50,000.00 to Paul
- $ 1000.00 to Mark
- The residue including the farm and cottage to his five siblings in Greece
Paul and Mark sued the Estate to have title to the farm and cottage transferred to them.
Paul and Mark faced some legal hurdles.
The first hurdle was the requirement that the evidence of their agreement with Gus had to be corroborated as required by Section 13 of the Ontario Evidence Act. The section reads as follows:
” In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.”
Paul and Mark’s lawyer called several witnesses who had heard Gus re-affirm in their presence his intention to transfer the farm and cottage to the boys when he died. The judge found that this constituted corroboration. There was also an earlier will that had left the farm and cottage to the boys which also corroborated the boys’ assertions.
Another problem the boys faced was that the original agreement was verbal and not in writing. The Defendant estate argued that the agreement was void as according to section 4 of the Statute of Frauds, agreements for transfer of interests in land must be in writing or are otherwise void. However, the judge found that the boys could overcome this hurdle based on the doctrine of part performance. They had done their part and kept their side of the bargain.
Most important, the trial judge held that Paul and Mark could rely on the doctrine of proprietary estoppel. The Ontario Court of Appeal in Schwark Estate v. Cutting summarized the law of proprietary estoppel in this way:
“The law with respect to proprietary estoppel is well-settled. This court has accepted that Snell’s Equity properly discloses the elements necessary to establish proprietary estoppel as: 1. encouragement of the plaintiffs by the defendant owner, 2. detrimental reliance by the plaintiffs to the knowledge of the defendant owner, and 3. the defendant owner now seeks to take unconscionable advantage of the plaintiff by reneging on an earlier promise.”
The judge found that Gus had:
“repeated his assurances for many years in front of several third parties in relatively unambiguous language and the Plaintiffs relied on those promises to their detriment subordinating their lives to the wishes and demands Gus put to them .”
The trial judge further wrote:
“ 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.”
The judge ordered the estate to convey the farm and cottage to Paul and Mark.
So, the next time your kids complain they’re not getting paid for doing all those chores- tell them the story of Paul and Mark.