Chace the Ace lotteries have become increasingly popular tools for fundraising. The nature of the contests can also result in them building very large prize pools. And as can sometimes be expected in matters involving large sums of money, disputes can arise. A recent Chase the Ace resulted in a man and his aunt litigating over who was entitled to winnings of over $1 million. Before the main issue was tried, the pair appeared before the Supreme Court of Nova Scotia to determine what would happen to the money before the dispute was resolved.

A huge win turns into a legal dispute

The pair had attended a Chase the Ace lottery in Margaree, Nova Scotia. Both the aunt and the nephew’s names were on the ticket. Their names were drawn, and when organizers flipped over the card, exposing the ace of spades, they were awarded the prize pool of $1.2 million. Since both of their names were on the ticket, organizers wrote them each a cheque for half of the winnings.

What should have been a joyous event turned into a litigious one. The aunt claimed the ticket belonged to her alone and as such, she argued she was entitled to all of the money. She filed legal action to recover one half of the lottery winnings from the nephew.

The nephew, meanwhile, filed a defence contesting his aunt’s claim. He stated the winning ticket was intended by both parties to be a joint ticket and that the pair had agreed to split the winnings if one of the tickets with both of their names was selected.

In the meantime the aunt applied for a Preservation Order over the funds pending the outcome of the court’s decision. She was looking to prevent her nephew from spending any of his half of the winnings.

The court employed a three-part test established by the Supreme Court of Canada in 1994 in order to establish whether the Preservation Order would be granted. The test is as follows:

“is there a serious issue to be tried; would the person applying for the injunction suffer irreparable harm if the injunction were not granted; and is the balance of convenience in favour of granting the interlocutory injunction or denying it. The fundamental question is whether the granting of an injunction is just and equitable in all of the circumstances of the case. This will necessarily be context-specific. (emphasis added)”

Is there a serious issue to be tried?

The court was satisfied that there was a serious issue to be tried, writing “The evidence establishes that when (the nephew) told (the aunt) he was going to Margaree to buy Chase the Ace tickets, (the aunt) asked, “can you get me some?”, and gave (the nephew) money for the tickets.  Although the tickets included both of their names, they were purchased with (the aunt’s) funds alone.  (the nephew) bought his own tickets.  There is a dispute concerning what discussions took place between the parties before the tickets were purchased.  The findings of fact to be made at trial will be important in determining whether an enforceable contract was in place between the parties.”

Irreparable Harm

The aunt said she would suffer irreparable harm if the preservation order was not granted, stating the nephew was young, not financially independent, and had a low net worth (he was a student). Should he spend the money, she argued, it would be difficult to get it back. The nephew argued he is financially responsible and pointed out that there was no evidence that he intended to dispose of the funds. The court, however, pointed out that the Supreme Court stated “irreparable” harm referred to the nature of the harm suffered rather than its magnitude, meaning the question is not about how much money could be lost. That said, the court was satisfied that the nephew would have a difficult time repaying the money should he have to give it up. The court found that despite there being no evidence about bad faith on the part of the nephew, he would be unlikely to be able to pay back the money if a judgment was entered against him. Regardless, the court wrote “ Even if I am wrong that the risk of non-recovery in this case is sufficient to prove irreparable harm, our Court of Appeal has recognized that, in some cases, the strength of one part of the three-part test may compensate for a deficiency in another.”

Balance of Convenience

The last part of the test requires the court to consider the relative impact upon the parties of granting or withholding injunctive relief. The court asked who between the two parties would suffer the greatest harm if the order was granted or withheld. In looking at the impact to the parties, the court found,

“There are obviously competing interests in play on this motion.  (the aunt) wishes to preserve the funds in dispute to ensure that she will not be left without a remedy if she is ultimately successful in her claim against (the nephew).   (The nephew) wishes to be free to use his winnings as he pleases to support his education and to assist his family.

Having weighed and considered the evidence and submissions, I am satisfied that, in the unique circumstances of this case, the balance of convenience overwhelmingly favours granting the order.”

After going through the process of obtaining a Preservation Order the pair managed to settle their dispute. The settlement, which both the nephew and the aunt said they were happy with, saw the aunt taking home $872,639 with the nephew pocketing $350,000.

At Borden Family Law we have over 17 years of extensive experience in family law to help clients plan for the future and get through situations of conflict. We understand family dynamics and look to avoid unnecessary trips to court whenever possible, while passionately protecting our clients’ interests in court should it be necessary. Please call us at 905-576-6090 or reach us online to discuss your situation today.