Case Comment - Whether A Constructive Trust Should Be Imposed Because Of Unjust Enrichment*

The application judge found that an oral agreement was made between Moore and the deceased in 2000, shortly after their separation, to the effect that she would pay the premiums from that time forward and would be entitled to the proceeds of the policy on his death. That finding was not contested on appeal. Annual premiums of $507.50 had previously been paid from their joint account. After the separation, the premiums were paid solely by Moore pursuant to that agreement.

In September 2000, shortly after the agreement he had made with Moore, and in contravention of it, the deceased changed the beneficiary under the life policy to Sweet. In fact, he purported to make her the irrevocable beneficiary. He did not advise Moore of this change, and she continued to pay the premiums for the policy until his death some 13 years later. While the deceased did not advise Moore of the change, the majority of the court considered that he had not acted surreptitiously. The change was carried out through the offices of, and after discussions with, Moore's brother-in-law, a life insurance broker who was married to Moore's sister, who herself worked for a life insurance company. While this is not spelled out in the decision, it appears that Moore never became aware, prior to the deceased's death, that a change in beneficiary had been made. What is not disputed is that the deceased did not tell Moore of the change in beneficiary. As previously indicated, Moore continued to pay the premiums on the policy until his death.

In May 2002, after both the separation and the change in beneficiary, but prior to their divorce, Moore and the deceased entered into a separation agreement. The agreement was silent about the policy or anything related to it.

The breakdown of the marriage between Moore and the deceased was related to his struggles with chronic pain, and with alcohol and substance abuse issues, which in turn led to his financial irresponsibility and the buildup of burdening debts. Both of them declared bankruptcy in early 2000, shortly after their separation and at about the time of their oral agreement regarding the life policy. Little is known about Moore's financial circumstances post-separation, although arrears of child support payments by the deceased accumulated in that time period.

Sweet too suffered from chronic pain and was disabled. She and the deceased cared for each other during their 13 years of cohabitation. They had financial hardships which led them to borrow from friends and relatives to make ends meet.

The issue was whether the proceeds of the life policy upon the death of the deceased were payable to Moore or to Sweet.

The issue, of course, was whether the proceeds of the life policy upon the death of the deceased were payable to Moore or to Sweet. The application judge held that they were payable to Moore, but that was reversed by the majority decision on the appeal.

Were the equities heavily weighted on one side or the other?

The following comment was made in the majority decision:

[T]his is not one of those cases - in spite of what it may seem at first impression - where the "equities" are heavily weighted in favour of one party or the other.

It is the case that Ms. Moore had an oral agreement with Mr. Moore that if she paid the premiums she would receive the proceeds of the Policy. It is the case that she paid the premiums. And it is the case that Mr. Moore breached the agreement by designating Ms. Sweet as the irrevocable beneficiary under the Policy.

On the other hand, Mr. Moore was a man of limited means, living in the post-separation period on a disability pension, and suffering from the disabilities associated with his physical, mental and substance abuse issues. Ms. Sweet - who is herself disabled - took care of Mr. Moore and, for practical purposes, provided him with a home, a place to live, and a supportive family during the 13 years of their relationship.2

The last part of that comment refers to circumstances which might be described as part of the overall "equities" of the situation, but they are equities of a general nature, only indirectly connected to the equitable considerations deriving from the main issue at hand, that being the wrongdoing committed by the deceased and the loss sustained by Moore as a consequence of that wrongdoing. General and indirect equitable considerations can often be found to purportedly justify wrongdoing of one sort or another, but that does not make those considerations particularly relevant or weighty when the scales of justice are engaged to determine whether there is a balance, or anything close to one, in the positions of the...