How Can an Executor Dispute a Creditor's Claim in BC?

You are the executor or administrator, and a letter arrives claiming the estate owes money. The amount looks too high, the debt may not be what the creditor says it is, or the claim may be very old. You are not sure whether to pay, ignore it or push back.

In British Columbia, the Wills, Estates and Succession Act (WESA) gives you a specific tool for disputing a claim, and it comes with a firm deadline for the creditor. This article explains how that tool works, what it does not cover, and how it fits with the other timelines in an estate. It is general information, not advice on your particular file.

This article covers the law of British Columbia.

Why you have to deal with claims at all

A personal representative has the authority the deceased would have had if living, subject to the will and any enactment. You must use that authority to administer and distribute the estate and to account to beneficiaries and creditors. Settling unpaid debts, including taxes owed to the CRA, comes before distributing what remains to the beneficiaries.

Death does not make a claim disappear. A cause of action against a deceased person is not annulled by the death alone, and the claim can continue against the estate with you as the party.

The WESA s. 146 notice disputing a claim

WESA s. 146 lets a personal representative give written notice disputing a claim against the estate. If the claim is already due, the claimant must then start a proceeding within 180 days after the notice is given. If no proceeding is started in time, the claim is forever barred.

• Read the claim carefully and compare it with the estate's records.
• Ask the creditor for proof of the debt, such as statements or the signed agreement.
• Decide whether you dispute all of the claim or only part of it.
• Give the dispute in writing, and keep a record of the date it was given.
• Diarize the 180 days that follow.

What the 180-day bar does not cover

The s. 146 bar does not apply to beneficial-interest claims by beneficiaries or intestate successors, or to Division 6 (wills variation) claims. A person claiming a share of the estate is not treated like a creditor with a debt.

A wills variation claim asks the court to vary a will to make adequate provision for the maintenance and support of the will-maker's spouse or children. It must be commenced within 180 days from the date the representation grant is issued in British Columbia. That is a separate clock from the creditor timeline, and it starts on a different event.

How s. 146 sits apart from the Limitation Act

The Limitation Act generally says a claim must not be commenced more than 2 years after the day it is discovered. A claim is discovered on the first day the person knew or reasonably ought to have known that injury, loss or damage had occurred. There is also an ultimate period: no claim may be commenced more than 15 years after the day the claim arose, with the Act's listed extensions.

The Limitation Act does not apply to a claim for which another enactment sets a limitation period, except as that enactment provides. So WESA's 180-day dispute period is separate from the 2-year and 15-year periods.

Be careful what you sign or pay

A written, signed acknowledgement of liability, or part payment of a liquidated sum, can restart the Limitation Act clock for a debt. How this applies to a particular letter or payment depends on the facts, so it is worth confirming with a lawyer.

• Do not sign anything admitting a debt until you have checked it.
• Do not make partial payments on a claim you are disputing without advice.
• Reply to creditors in writing, and keep what you say neutral and factual.

How this fits with the rest of the estate timeline

A personal representative may publish a notice to creditors in the Gazette, requiring claims within a stated period that must not be less than 30 days from the date of publication. After that period ends, you are not liable for claims that were not presented in time. However, the notice does not prejudice a creditor's right to recover estate assets from whoever received them.

You must not distribute the estate within 210 days after the grant, except by court order. Earlier distribution is allowed with the consent of all beneficiaries and all persons who may bring a Division 6 (wills variation) claim.

Your liability for the deceased's wrongful acts or breaches is limited to the extent of the assets belonging to the estate, subject to the exceptions in WESA s. 149. The estate's assets are the source of payment. Personal liability arises mainly from your own acts, such as distributing improperly, not from the debts themselves.

If you are weighing whether to dispute a claim, pay it or wait out the notice period before distributing, it is worth speaking with a lawyer. The right order of steps depends on the size of the estate and the type of debt.

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