From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA>
To: ENRICHMENT@LISTS.MCGILL.CA
Date: 16/03/2017 16:44:41 UTC
Subject: [RDG] Good conscience?

I wonder what people think might have been the result of Ms. Moore’s trying to apply Foskett v. McKeown to this case?
The premia were fairly modest at $507.50/year, and we do not read anything about any investment content (as there was in Foskett). I am not an insurance expert but it seems to follow that what was being purchased was one year of insurance at a time (albeit the premia were fixed at the time the policy was first taken out based on life expectancy etc at that time). Perhaps it would not have lapsed on the missing of one payment, but we are told ([204]) that if she had not been paying the premia, “there would have been no policy”.

So she paid the insurer to continue the rights under the policy. Of course, she did so voluntarily, under an agreement with Mr. Moore, but she was not paying him, she was paying the insurance company. Does this make a resulting trust? It seems that it should, unless we were to think that her payments to the insurance company were intended to leave him free to designate any beneficiary he liked..which seems inconsistent with the findings of fact about their agreement.

Or, what about the constructive trust that arises when a person agrees to buy a particular asset (not being goods under the Sale of Goods Act) and has paid the full price? Since the seller is now unconditionally obliged to transfer the asset, a (perfectionary) constructive trust arises regardless of any question of specific enforceability. The Court said that their agreement was not an assignment, but it could still be interpreted as an agreement to transfer or an agreement that the policy would be for her benefit (as long as she was paying for it: cf [52]-[54]). The only alternative, again, seems to be to interpret the agreement as allowing him to change the beneficiary designation even while she was paying, which seems impossible.

L.

 

 

From: RDG <ENRICHMENT@LISTS.MCGILL.CA> on behalf of Lionel Smith <lionel.smith@mcgill.ca>
Reply-To: Lionel Smith <lionel.smith@mcgill.ca>
Date: Wednesday, 15 March 2017 at 20:55
To: RDG <ENRICHMENT@LISTS.MCGILL.CA>
Subject: [RDG] Good conscience?

 

Dear colleagues,

An interesting decision of the Ontario Court of Appeal rendered a couple of weeks ago: Moore v. Sweet, 2017 ONCA 182 (CanLII),  http://www.canlii.org/en/on/onca/doc/2017/2017onca182/2017onca182.html . Mr. Moore separated and later divorced from Mrs. Moore. While they were married, he insured his life for $250,000 with Mrs. Moore designated as beneficiary. When they separated, it was agreed that Mrs. Moore would continue to pay the premiums (some $500/year) and would continue to be the named beneficiary. Mr. Moore however changed the beneficiary designation to his new spouse, Ms. Sweet. (He made this designation irrevocable, which the first designation had not been; Canadian law allows such a designation which can then only be revoked with the consent of the named beneficiary.) Later still, the Moores reached a separation agreement in relation to family property, which did not mention the insurance policy, and which did not include a general release.

When Mr. Moore died in 2013 the question was who should get the proceeds. The trial judge held that Mrs. Moore should, partly on the basis of a finding that the Moores' agreement constituted an equitable assignment of Mr. Moore's rights under the policy, and partly on unjust enrichment reasoning. The ONCA unanimously rejected the reasoning based on equitable assignment.

By a majority of 2-1, the Court also rejected the unjust enrichment claim, implying (but not deciding) that there is no open-ended 'good conscience' category of constructive trust under Soulos v. Korkontzilas. They held that the second and irrevocable beneficiary designation was a 'juristic reason' for Ms. Sweet's entitlement to the proceeds. Mrs. Moore was entitled to recover the premiums that she had paid since the separation until the death.

In dissent, Lauwers J.A. would have imposed a constructive trust for unjust enrichment over the proceeds, in favour of Mrs. Moore. He concluded:

"[276] But I would go further and add that, to the extent that they fit awkwardly under the rubric of unjust enrichment, the disappointed beneficiary cases are perhaps better understood as a genus of cases in which a constructive trust can be imposed via the third route in Soulos – circumstances where the availability of a trust has previously been recognized – and the fourth route – where good conscience otherwise demands it, quite independent of unjust enrichment."

Lionel