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I had never heard of “promissory estoppel” before I read this article by Mark Weisleder in Moneyville magazine. Really interesting case. Robert.
An Ontario judge has ordered that ownership of a farm and a cottage be transferred to two brothers based on a verbal promise made 25 years ago by their step-grandfather when they were teens.
The implication of the unusual ruling is that you should be careful when making promises about the disposition of property whether the promise is in writing or not. Changing your mind may be harder than you think.
The decision by Judge Wolfram Tausendfreund relates to a family feud over the assets of Gus Sorkos, who was born in Greece and came to Canada as a young man. In 1960, Sorkos met Victoria Cowderoy and they lived in a common-law relationship for 40 years.
The couple were financially successful. They sold several restaurants and bought a number of properties, including a farm in London, Ont. and a cottage in Kincardine. Gus had no biological children, but treated Victoria’s grandsons Paul and Mark Cowderoy, as if they were his own.
Paul started working for Gus in a restaurant when he was 12. The court heard that in 1985, when the brothers were 13 and 17, they had a breakfast meeting with Gus. He promised that if they helped with the farm and the cottage, he would leave them the properties and $350,000 in his will.
They took care of these properties for the next 25 years and also helped Gus with his businesses. Court heard the brothers had spent thousands of hours working without pay.
Victoria died in 2001, Gus remarried and then he died in 2009. At that point, the brothers discovered there were several wills. A 2001 will left the cottage and farm equally to them, along with $500,000 each. A December 2003 will left $250,000 to his second wife, $50,000 to Paul, $25,000 to Mark and the rest to Gus’s five siblings in Greece.
The brothers challenged the 2003 will, arguing they should be given the farm, cottage and $350,000, based on the verbal promise. The legal theory they argued was promissory estoppel. This means that when someone makes a promise and others rely on it and then he profits from their actions, he should not be able to later break his promise.
Mark and Paul faced other legal challenges. The agreement was verbal and the Ontario Statute of Frauds requires agreements to do with real estate to be in writing. Both were also minors when the agreement was made.
Many witnesses testified to the close relationship between the brothers and Gus and to the promises made by Gus over the years. It was also demonstrated that Gus had greatly benefited from the work done by both Mark and Paul.
Justice Tausendfreund decided that Gus had to stand by his promise. Even though the breakfast meeting discussion was not in writing, there was proof that the brothers kept their end of the bargain. The judge stated it would be “unconscionable” for them not to receive the properties. On the other hand, they didn’t get the promised cash. The Judge found that there was not enough proof to support this part of the promise.
Mark Weisleder is a Toronto real estate lawyer. Contact him at firstname.lastname@example.org