Pro Rata Definition:

In Hendrie v Lowmaster, Justice Ford of the Circuit Court of Appeals was succinct:

"Pro rata means according to a measure which fixes proportions."

Justiuce Proudfoot of the British Columbia Supreme Court adopted these words in Dominion of Canada General Insurance Company v Wawanesa Mutual Insurance Company to define pro rata:

"... proportional, to divide proportionally."

For example, if a for profit corporation with two shareholders, one with 25% and the other with 75% of the shares, received a gift of $10,000 and desired to split it pro rata between the shareholders, the shareholder with 25% of the shares would receive $2,500 and the 75% shareholder, $7,500.

In the context of a distribution of assets as set out in a will, a pro rata distribution would proceed in accordance with the stated standard.

REFERENCES:

• Dominion of Canada General Insurance Company v Wawanesa Mutual Insurance Company, 16 CCLI 69 (1985)
• Hendrie v. Lowmaster, 152 F. 2d 83 (1945)