BC Appeal Court overturns decision that awarded farm to former worker

In a post from August, 2013 called "Equity ensures farm goes to intended beneficiary after codicil failed", I wrote about a decision of the British Columbia Supreme Court that granted ownership of a farm to a long-time farm worker on the basis of alleged promises made during the lifetimes of the farm owners.   The farm worker said that the owners, Kim and Dietrich, had assured him that the farm would go to him more or less in recognition of his uncompensated work on the farm.  Although their 1998 mutual wills left the farm to someone else, Kim and Dietrich had prepared handwritten codicils that would have left the farm to the worker.  However, with only one witness, the codicils were invalid.  Dietrich died in 2006.  When Kim died in 2011, the worker sued the estate for an equitable interest in the farm (which had been left to another beneficiary).  The trial judge concluded that the worker had made out his claim based on proprietary estoppel (i.e. you promised me and now you can't say that you didn't) and that equity required that the farm go to him.

This decision has now been overturned on appeal.  While the BC Court of Appeal concluded that the farm worker was assured and genuinely believed he would inherit the farm, the Court also found that his detrimental reliance on the assurance was far less than that assessed by the trial judge.  The award of ownership of the farm was far out of proportion to the detriment the worker actually suffered and, in all the circumstances, would not do justice between the parties (as equity is intended to do).

As the Court stated, "detriment forms the backbone of a claim of proprietary estoppel because it is detriment that gives rise to the unfairness which requires equity to intervene."  Reliance is not always detrimental, and it is necessary for the Court to look "at both the overall benefits gained and losses suffered by the claimant."  The Court in this case found that the worker did not suffer from choosing to work at a small accounting firm close to the farm, one of his alleged grounds of detrimental reliance.

But the Court was not able to say definitively that the worker's uncompensated efforts at the farm hadn't given rise to the need for equitable relief.  Therefore, the Court of Appeal set aside the trial judge's decision and sent the case back to the trial judge to assess claims of unjust enrichment and express or implied trust, as well as the issue of proportionality as it related to the claim of proprietary estoppel.

It should be noted that one of the three appellate justices would have dismissed the appeal, finding that it could not be said that the trial judge had improperly exercised his discretion in awarding the farm to the worker.

Read the decision at: Sabey v. Rommel.

Equity ensures farm goes to intended beneficiary after codicil failed

This was an estate case involving a horse farm.  The farm had been owned jointly by Mr. and Mrs. von Hopffgarten before the husband died in 2006.  In 2011, Mrs. von Hopffgarten died - her will said she left the farm to a Ms. Rommel.  However, the von Hopffgartens had for a long time taken a man named Jesse Sabey under their wings and intended to leave the farm to him.  They both executed codicils to their wills (changing the beneficiary from Ms. Rommel to Mr. Sabey), but the codicils were invalid under the Wills Act, R.S.B.C. 1996, c. 489 because they were witnessed by only one person.

Sabey commenced an action the B.C. Supreme Court to claim ownership of the farm based on proprietary estoppel - statements made to him by the von Hopffgartens.  Alternatively, he made claims based on unjust enrichment and trust.  He alleged that he had worked extensively on the farm, with less remuneration than other workers, with the promise that he would someday take over the farm.  Interestingly, Sabey was not aware of the codicils that the von Hopffgartens had attempted to make (and, therefore, the codicils couldn't assist in making the case of proprietary estoppel). 

The Court accepted Mr. Sabey's evidence; no one challenged his credibility about the statements made to him.  The Court concluded that he had made out the case for proprietary estoppel and that "equity must be satisfied" by granting Mr. Sabey the farm. 

Read the decision at: Sabey v. Beardsley.