A widow is entitled to proceeds from a life insurance policy pursuant to a separation agreement

The beneficiary of a life insurance policy was not unjustly enriched, even though she did not pay the premiums, as she was designated the beneficiary pursuant to a separation agreement.

Richardson Estate v. Mew, [2009], O.J. No. 1947, March 25, 2009, Ontario Court of Appeal, K.N. Feldman, E.E. Gillese and P.S. Rouleau JJ.A.

Ferguson, a widow, appealed from a judgment ordering payment of a death benefit to the Respondent, Mew. The Deceased had married Mew in 1965 and raised two children over the course of their 26 year marriage. The Deceased and Mew divorced in 1992. During that time, the Deceased had become involved with Ferguson. The Deceased and Ferguson were married shortly after the Deceased divorced and had three children. Two years after the divorce, the Deceased and Mew entered into a separation agreement under which the Deceased designated Mew as the named beneficiary of a $100,000 life insurance police (the “Policy”). The Policy was initially purchased in 1990 and Mew was named as the beneficiary. It was misplaced and the replacement, which was issued in 1993, named Ferguson as the beneficiary. In 1994, the Deceased appointed Mew as the designated beneficiary to fulfill the terms of the separation agreement. In 1998, the Deceased executed a will appointing Ferguson as the Trustee of his estate and named her as a beneficiary. In 1999, the deceased was diagnosed with Alzheimer’s disease. In 2004, he was transferred to a long term care facility where he remained until his death in 2007.

Ferguson brought a motion claiming to be entitled to the proceeds of the Policy. She sought to impose a constructive trust on the death benefit in her favour on the basis that Mew had been unjustly enriched. The motion judge ruled in favour of Mew.

The appeal was dismissed. The Court held that the designation of Mew as a beneficiary under the Policy constituted a juristic reason for her enrichment. It was thus unnecessary to determine whether Ferguson had suffered a corresponding deprivation by payment of the premiums of her own funds. Mew was not unjustly enriched.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley.

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