Is a Victim’s Estate Entitled to the Funds of a Restitution Order?
Restitution in Canada is defined as an order requiring the offender of a crime to repay the victim for the financial losses it suffered due to the damages brought on by the offender.[1] According to the Canadian Bill of Rights, a victim may move to enforce their right to a restitution order, if they are not paid, by having the order entered as a civil court judgement.[2]
When dealing with the intersection of criminal law and estate law, particularly in the area of Elder Law, one may ask if an offender must continue to pay a restitution order to a victim once they have passed away. Does the restitution payment redirect to the victim’s estate? Is it the estate trustee’s duty to ensure the restitution payment is received or sought if there were ongoing legal proceedings prior to the victim’s death? There are many questions pertaining to this area of the law that are not avidly discussed.
For the purpose of providing the reader with a brief background, according to the Succession Law Reform Act[3] the “SLRA”), an estate trustee has a duty to pay the outstanding debts of the testator, including claims from a creditor.[4] The order in which an estate trustee has to pay the owing liabilities of a creditor are outlined in the SLRA.[5] Typically, a Dependant Support claim will be paid before a creditor, and creditors are entitled to payment before the estate is distributed to the estate’s beneficiaries.[6]
In the circumstance that a restitution order has been made to a victim who passes away, and such order was not paid in full, the estate trustee has a duty to the beneficiaries to ensure this debt owed to the estate is paid. According to s.48(2) of the Trustee Act, an estate trustee has the following duty:[7]
Security and settlement
48(2) A personal representative, or two or more trustees acting together, or a sole acting trustee, where, by the instrument, if any, creating the trust, a sole trustee is authorized to execute the trusts and powers thereof may, if and as they may think fit, accept any composition or any security, real or personal, for any debt or for any property, real or personal, claimed, and may allow any time for payment for any debt, and may compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatever relating to the testator’s or intestate’s estate or to the trust, and for any of these purposes may enter into, give, execute, and do such agreements, instruments of composition or arrangement, releases, and other things as seem expedient without being responsible for any loss occasioned by any act or thing done in good faith.
[emphasis added]
In other words, an estate trustee has the right to accept security for an outstanding debt. A restitution order may be viewed as an outstanding debt.[8] In Carmichael Estate v. George Weston Ltd, 1994 CanLII 370 (“Carmichael”) , a decision from the Supreme Court of British Columbia, the court ruled that the estate of an elderly woman who died before receiving her settlement payment, was owed the entirety of such funds.[9] Despite the court in Carmichael directing it’s analysis to an action regarding personal injury, it importantly notes the following regarding owed settlement funds to an estate:
The position of the Estate is analogous to that of the recovery of a debt barred by the technicality of a limitation, but otherwise justified as a repayment, or in the case of the Carmichael Estate as compensation for an injury and a detriment previously incurred; such cannot be classified as a windfall. The merits of the foregoing have been recognized in England and apparently in Ontario where statutory provision has been made cutting down the common law rule to permit the estate to bring or continue and maintain an action for recovery for pain and suffering.[10]
In summary, a victim who has received a restitution order is entitled to the proceeds of such order after they pass. The proceeds of the restitution order will pass to the estate as a recovery of a debt. Lastly, an estate trustee is entitled to seek the repayment of such restitution order for the benefit of the beneficiaries.
—
[1] Government of Canada, Victims’ Rights in Canada
[2] Ibid at s.17.
[3] Succession Law Reform Act, RSO 1990, c s.26
[4] Ibid at s.31 and s.32
[5] Ibid
[6] s. 57(1)
[7] Trustee Act, RSO 1990, c T.23 at s.48(2)
[8] Carmichael Estate v. George Weston Ltd., 1994 CanLII 370 (BC SC) at para 28
[9] Ibid
[10] Ibid at para 28.
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Written by: Gabriella Banhara
Posted on: November 28, 2024
Categories: Commentary, Estate Litigation, WEL Newsletter
Restitution in Canada is defined as an order requiring the offender of a crime to repay the victim for the financial losses it suffered due to the damages brought on by the offender.[1] According to the Canadian Bill of Rights, a victim may move to enforce their right to a restitution order, if they are not paid, by having the order entered as a civil court judgement.[2]
When dealing with the intersection of criminal law and estate law, particularly in the area of Elder Law, one may ask if an offender must continue to pay a restitution order to a victim once they have passed away. Does the restitution payment redirect to the victim’s estate? Is it the estate trustee’s duty to ensure the restitution payment is received or sought if there were ongoing legal proceedings prior to the victim’s death? There are many questions pertaining to this area of the law that are not avidly discussed.
For the purpose of providing the reader with a brief background, according to the Succession Law Reform Act[3] the “SLRA”), an estate trustee has a duty to pay the outstanding debts of the testator, including claims from a creditor.[4] The order in which an estate trustee has to pay the owing liabilities of a creditor are outlined in the SLRA.[5] Typically, a Dependant Support claim will be paid before a creditor, and creditors are entitled to payment before the estate is distributed to the estate’s beneficiaries.[6]
In the circumstance that a restitution order has been made to a victim who passes away, and such order was not paid in full, the estate trustee has a duty to the beneficiaries to ensure this debt owed to the estate is paid. According to s.48(2) of the Trustee Act, an estate trustee has the following duty:[7]
Security and settlement
48(2) A personal representative, or two or more trustees acting together, or a sole acting trustee, where, by the instrument, if any, creating the trust, a sole trustee is authorized to execute the trusts and powers thereof may, if and as they may think fit, accept any composition or any security, real or personal, for any debt or for any property, real or personal, claimed, and may allow any time for payment for any debt, and may compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatever relating to the testator’s or intestate’s estate or to the trust, and for any of these purposes may enter into, give, execute, and do such agreements, instruments of composition or arrangement, releases, and other things as seem expedient without being responsible for any loss occasioned by any act or thing done in good faith.
[emphasis added]
In other words, an estate trustee has the right to accept security for an outstanding debt. A restitution order may be viewed as an outstanding debt.[8] In Carmichael Estate v. George Weston Ltd, 1994 CanLII 370 (“Carmichael”) , a decision from the Supreme Court of British Columbia, the court ruled that the estate of an elderly woman who died before receiving her settlement payment, was owed the entirety of such funds.[9] Despite the court in Carmichael directing it’s analysis to an action regarding personal injury, it importantly notes the following regarding owed settlement funds to an estate:
The position of the Estate is analogous to that of the recovery of a debt barred by the technicality of a limitation, but otherwise justified as a repayment, or in the case of the Carmichael Estate as compensation for an injury and a detriment previously incurred; such cannot be classified as a windfall. The merits of the foregoing have been recognized in England and apparently in Ontario where statutory provision has been made cutting down the common law rule to permit the estate to bring or continue and maintain an action for recovery for pain and suffering.[10]
In summary, a victim who has received a restitution order is entitled to the proceeds of such order after they pass. The proceeds of the restitution order will pass to the estate as a recovery of a debt. Lastly, an estate trustee is entitled to seek the repayment of such restitution order for the benefit of the beneficiaries.
—
[1] Government of Canada, Victims’ Rights in Canada
[2] Ibid at s.17.
[3] Succession Law Reform Act, RSO 1990, c s.26
[4] Ibid at s.31 and s.32
[5] Ibid
[6] s. 57(1)
[7] Trustee Act, RSO 1990, c T.23 at s.48(2)
[8] Carmichael Estate v. George Weston Ltd., 1994 CanLII 370 (BC SC) at para 28
[9] Ibid
[10] Ibid at para 28.
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