When someone dies leaving debts, creditors will typically make a claim against their estate. It is vital for the estate trustee to be aware of such matters, because they are liable for any failure to meet the demands of the creditors. Additionally, debts are paid before bequests are made.
Debt claims typically involve a fixed amount of money, such as a loan which was never repaid. But creditors may include the often troublesome quantum meruit claims, which request “fair and reasonable compensation” in exchange for a service which the claimant performed for the deceased. Their name is derived from a Latin phrase meaning “what one has earned.”
The claimant, who renders the service in question (often in the absence of a clear contract) must look to equity and establish an unjust enrichment in order to be financially compensated. This was demonstrated by the seminal 1954 decision of the Supreme Court of Canada, Deglman v. Guaranty Trust Co. Of Canada, in which the respondent’s aunt agreed to bequest a piece of land to him in exchange for certain services. In reliance on her promise, he did the work. After the aunt died intestate, the court concluded: “It is clear that none of the numerous acts done by the respondent in performance of the contract were in their own nature unequivocally referable to […] that land. On the other hand there are concurrent findings of fact, which were not questioned before us, that the acts done by the respondent were in their nature referable to some contract existing between the parties.”
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