Estate Litigation Blog

Quinn v. Carrigan: "No litigation outcome is inevitable"

by Rob Levesque, Published: November 15, 2014

Tags: dependant support,  dependants,  estate,  estate litigation,  succession law reform act

It can be comforting to think of the law as an objective system that produces consistent, predictable results.  However, judges aren't computers, and different judges can interpret the same facts and the same law in different ways, producing totally different outcomes. 

It can be particularly difficult to predict the outcome of a dependant support application brought under Part V of the Succession Law Reform Act.  Determining what constitutes "adequate support" of a dependant spouse or child is not an exact science, and raises questions that don't have easy answers.  How do you place a value on a spouse's relationship with the deceased?   How can you treat the deceased's dependants and other family members equitably, having regard to their legal and moral claims against the estate?  While judges have developed various rules and principles that apply to dependant support claims, the fact remains that different judges will reach different conclusions based on the same facts and law. 

The recent case of Quinn v. Carrigan 2014 ONSC 5682 is a perfect example of this phenomenon. 

The late Mr. Carrigan left assets with a total value of approximately $2.4 million to his wife https://www.canlii.org/en/on/onscdc/doc/2014/2014onsc5682/2014onsc5682.pdfand two children, and nothing to his common law spouse of eight years, Ms. Quinn.  Not surprisingly, Ms. Quinn retained a lawyer and made a claim against Mr. Carrigan's estate for dependant support.  Ms. Quinn's claim went to trial, and the Court concluded that she was entitled to receive the deceased's pension death benefit, worth about $1.4 million.  

The deceased's wife appealed the Court's judgment to the Court of Appeal.  The Court of Appeal found that the trial judge had erred in concluding that Ms. Quinn was entitled to the death benefit, and accordingly ordered a second trial of her dependant support claim.  At the end of the second trial, the Court concluded that Ms. Quinn was entitled to a lump sum payment of $350,000.00.  

Ms. Quinn appealed the second judgment to the Divisional Court.  The Divisional Court held that the judge in the second trial had erred in calculating Ms. Quinn's spousal support payment.  However, rather than ordering a third trial, the Divisional Court conducted its own analysis of the dependant support claim, ultimately concluding that Ms. Quinn was entitled to a lump sum payment of $750,000.00.

In the end, Ms. Quinn had three separate hearings to determine her entitlement to a share of the deceased’s estate, and got three very different results.  The lesson for potential litigants is clear.  As expressed by Justice Corbett, who delivered the reasons of the Divisional Court in this case:  "no litigation outcome is inevitable".    

Do the claims of dependants have priority over the claims of other creditors?

by Rob Levesque, Published: October 15, 2014

Tags: creditors,  creditors' relief act,  dependant support,  equalization,  estate administration,  estate trustees,  estates

In the administration of any estate, one of the estate trustee's first jobs is to identify potential creditors who might advance claims against the estate.  The general wisdom has always been that an estate trustee should make sure that he or she has held back sufficent funds from the estate to satisfy the claims of all potential creditors before making distributions to the beneficiaries, heirs and dependants of the estate.  It may therefore come as a surprise to many lawyers that in a recent case, Grieco v. Grieco Estate, 2013 ONSC 2465, the Court held that dependant support claims have priority over the claims of potential creditors with pending, but unproven claims.

In the Grieco case, the deceased’s ex-wife had an outstanding equalization claim against the deceased’s estate which pre-dated his death.  The deceased’s common law spouse and two of the deceased’s adult children bought dependant support claims against the estate.  The parties settled their claims at mediation, and obtained a consent judgment providing for the distribution of lump sum equalization and dependant support payments.  

The estate trustee was wary of making the payments pursuant to the consent judgment because a number of potential creditors had come forward with claims against the estate.  While the claims of the creditors had yet to be proven, if the estate trustee proceeded with the distribution of the dependant support and equalization payments pursuant to the consent judgment, there would be no money left in the estate to satisfy a possible judgment against the estate by the creditors.  Accordingly, the estate trustee sought the direction of the Court.

The Court held that the lump sum equalization payment to the ex-wife and the lump sum dependant support payment to the common law spouse took priority over the claims of the potential creditors.  In doing so, the Court referred to section 4(1) of the Creditor’s Relief Act, 1990 and Section 2(3) of its successor legislation the the Creditor’s Relief Act, 2010.  The Court held that both the 1990 Act and the current Act, “maintain the priority of support claims over virtually all other claims”, and that this priority extended to dependant support orders made pursuant to the Succession Law Reform Act.  Accordingly the common law spouse was entitled to recieve her lump sum payment from the estate in priority to the potential creditors.

Furthermore, given that orders made for the support of dependants have priority over debts owing to creditors under section 2(3) of the Creditors' Relief Act; and given that a spouses’ equalization entitlement has priority over orders for the support of dependants other than children of the deceased under subsection 6(12) of the Family Law Act; the Court concluded that the ex-wife’s  equalization payment also had priority over the claims of the potential creditors.  The Court found that the wife was also a dependant of the estate and was entitled to receive her lump sum payment in priority to the creditors on that basis as well.

The Grieco case raises difficult issues for trustees facing competing claims by surviving spouses, dependants of the estate, and other potential creditors of the estate. While the case appears to stand for the proposition that the claims of dependants have priority over the claims of other potential creditors of the estate pursuant to the Creditor’s Relief Act, lawyers who are advising estate trustees should treat the decision with caution.  There are currently no other reported cases dealing with the interaction between the Creditors' Relief Act and equalization and support claims in the estates context.