Horvath Estate – Alberta Court of King’s Bench declines to canvas the constitutional issue of whether ITA s. 159 is paramount over the Alberta Estate Administration Act

The personal representatives of an insolvent estate proposed to distribute its remaining assets pro rata to all the unsecured creditors as required by the terms of s. 27 of the Estate Administration Act (Alberta). CRA argued that ITA s. 159 created a priority of payment for its claims. In rejecting this position, Leonard J found that this raised the question as to whether s. 159 was paramount over the provincial statute, which was an issue she could not consider since notice of this constitutional question had not been given to the Province of Alberta.

However, she accepted CRA’s alternative submission that the Crown’s debt takes priority over other creditors of equal degree by virtue of the common law prerogative of the Crown to be paid first among claims of equal degree, noting that “there is nothing in the Estate Administration Act that limits the Crown prerogative.”

Neal Armstrong. Summary of Horvath Estate (Re), 2023 ABKB 643 under ITA s. 159(2).