2019 QCCQ 7949, 2019 QCCQ 7949

Croghan c. Croghan (Succession de Croghan) 2019 QCCQ 7949 COURT OF QUEBEC “Small Claims Division” CANADA PROVINCE OF QUEBEC DISTRICT OF BEDFORD LOCALITY OF COWANSVILLE “Civil Division” No.: 455-32-700904-195 DATE: December 19 , 2019 ______________________________________________________________________ PRESIDING: THE HONOURABLE PIERRE BACHAND, J.C.Q. ______________________________________________________________________ HEATHER CROGHAN Plaintiff v.

JOANNE CROGHAN in her capacity as liquidator of the Estate of Morris Croghan Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The plaintiff claims $15,000 from the liquidator of their father’s estate, to which the defendant objects for the reasons explained below. [ 2 ] First, the Court stated at the outset of the hearing that it did not believe it had jurisdiction over this matter because it appeared to involve an accounting.

After hearing the parties, the Court concluded otherwise as the accounting has been done and it is simply a matter of deciding whether the plaintiff has a valid claim for at least $15,000. It is therefore a small claim within the meaning of art. 536 C.C.P. and this Court has jurisdiction to determine the application. [ 3 ] Morris Croghan died on September 12, 2015, leaving a will bequeathing some legacies by particular title and a residual universal legacy, whereby his five children were bequeathed the remainder as universal legatees. All the legatees by particular title received their inheritance. Mr.

Croghan’s five children received part of their inheritance. [ 4 ] The documents authorizing the property distribution, however, have been received from both levels of government, i.e., the Clearance Certificate from the Canada Revenue Agency and the Certificate Authorizing the Distribution of Property of a succession from Revenu Québec. Moreover, the accounting has been completed, as appears from the document titled “Final account of the Estate of Morris Croghan”.

Therefore, the liquidator has the necessary authorizations and even the money required to finalize her distribution. [ 5 ] There is a dispute, however, between the plaintiff and the other heirs and the liquidator agrees with those who object to the plaintiff receiving an equal share. According to her accounting, each of the five heirs is entitled to $45,534.47. The defendant nonetheless proposes that the property be divided differently. [ 6 ] The reason is that the plaintiff bought the estate’s main asset, their father’s home, for $300,000.

At the time of the sale, the municipal assessment of the immovable was $374,600. Furthermore, the 2017-2018 assessment roll increased the municipal assessment to $406,100. Last, the liquidator prior to the defendant, Stephen Hartley, had obtained an appraisal valuing the immovable at $446,000 on November 5, 2015.

It should be noted, however, that this appraisal was not conducted by a Chartered Appraiser. [ 7 ] Because the plaintiff bought the immovable for an amount below the municipal assessment, which the defendant considers is the fair market value, she therefore proposes a division whereby the plaintiff, whom the liquidator considers obtained an additional value

of $106,100, should pay the proportion of this amount on what is considered as the fair market value, $406,100, of the capital gains tax paid for the immovable, i.e. $61,051.04, according to the calculation below: $106,100 X $61,051.04 = $15,950.54 $406,100 Like her brothers and sisters, she believes it would be fair and equitable for the plaintiff to pay the capital gains tax on the excess part of the amount paid. [ 8 ] During negotiations to sell the immovable, all the heirs were aware that capital gains tax would be payable to both levels of government. They did not know, however, the amount.

It appears that before he died, Morris Croghan clearly told his heirs that he hoped one of them would buy the family home so that it would stay in the family. In fact, the other heirs asked that a right of first refusal be included in the deed of sale, which it was, should the plaintiff and her spouse sell the immovable within 10 years of the property being transferred. [ 9 ] It further appears that Mr. Croghan wanted the property to be sold to the buyer for $240,000, which the defendant disputes.

That is the result obtained if the price is $300,000 because the buyer’s share of $60,000 (one-fifth of $300,000) was deducted. In any event, the result is the same, even if the Court disregarded this statement. The defendant may well think that it would be fairer to divide it in the way she proposes, but this approach has no legal basis. [ 10 ] In short, the property was bought at the price negotiated and agreed to by the five heirs. They knew that there would be a tax on the capital gains, even if they did not yet know the exact amount.

They also knew that the property’s municipal assessment was higher than the sale price. The capital gains tax was claimed after the property’s deemed disposition upon death. This capital gains tax is owed by the estate and not by any heir, in full or in part. [ 11 ] Therefore, the result is that the plaintiff has a claim for $15,000 against the liquidator. Her share is even higher at $20,534.47, but she agreed to reduce her claim to $15,000 and forego the excess so that she could proceed before the Small Claims Division.

FOR THESE REASONS, THE COURT: [ 12 ] CONDEMNS the defendant, in her capacity as liquidator of the Estate of Morris Croghan, to pay the plaintiff $15,000, with interest at the legal rate and the additional indemnity set out in art. 1619 C.C.Q., as of the date of the summons. [ 13 ] THE WHOLE with legal costs in the amount of $205. __________________________________ Pierre Bachand, J.C.Q. Date of hearing: October 21, 2019