Michelle Constance Moore v. Risa Lorraine Sweet
(Ontario) (Civil) (By Leave)
Equity - Unjust enrichment, Remedies, Insurance, Restitution - Restitution - Unjust enrichment - Equity - Remedies - Constructive trust - Insurance - Appellant continuing to pay premiums for term life insurance policy of ex-spouse, unaware that he had changed his beneficiary designation to the respondent - Whether the disposition of law category of juristic reason operates in all instances of a beneficiary designation - Whether a remedial constructive trust is otherwise available in the absence of unjust enrichment and wrongful act.
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At issue in the appeal is entitlement to the proceeds of a $250,000 term life insurance policy obtained by M in 1985. At the time it was issued, the appellant and M were married with three children, and the appellant was named M’s beneficiary. The appellant and M separated in December 1999 and divorced in October 2003. In the summer of 2000, M moved in with the respondent, with whom he lived until his death. In September 2000, M executed a change of beneficiary form, designating the respondent as his irrevocable beneficiary under the policy. The respondent witnessed the change and the insurer recorded the change of beneficiary.
Until 2000, the policy’s annual premium of $507.50 was paid out of an account jointly held by the appellant and M. From 2000 until M’s death in spring of 2013, the appellant paid the premium from her own account. The appellant was not advised of or aware of the change of beneficiary, and only learned of it upon M’s death. The appellant and M had entered into a separation agreement May 2002, which was silent with respect to the policy. Upon M’s death, the proceeds of the policy were paid into court by the insurer pending the resolution of the competing claims by the appellant and the respondent. The appellant applied to the court, claiming unjust enrichment and asking the court to impose a constructive trust in her favour over the proceeds of the policy. She argued that she and M had agreed that if she paid the premiums, she would be entitled to receive the benefit of the policy as a way for M to support their children despite his financial irresponsibility. The Ontario Superior Court of Justice granted the application, holding that the proceeds were impressed with a constructive trust in favour of the appellant. The Court of Appeal for Ontario allowed the appeal, set aside the lower court decision, and held that while the appellant was entitled to be repaid her premiums, the respondent was to receive the balance of the proceeds. Lauwers J.A., dissenting, would have dismissed the appeal.
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