Deprivation element did not require that disputed benefit be conferred directly by applicant on respondent

After their divorce applicant and deceased agreed that she would maintain his life insurance policy and then receive proceeds on his death. Following divorce, deceased established relationship with respondent and contrary to oral agreement, deceased revoked applicant’s designation and designated respondent as irrevocable beneficiary. Trial judge ruled that there was oral agreement between former spouses, which took form of equitable assignment and that applicant should receive life insurance proceeds. Respondent appealed. Appeal was allowed. Court of Appeal ruled that trial judge erred in failing to hold that there was valid juristic reason for respondent’s receipt of policy proceeds and therefore in holding that proceeds were impressed with trust in applicant’s favour based on unjust enrichment. Absent equitable assignment, provisions of Insurance Act, pursuant to which respondent was designated irrevocable beneficiary, operated to provide valid juristic reason for her receipt of insurance proceeds, making finding of unjust enrichment unavailable. Applicant appealed. Appeal allowed. Remedial constructive trust should be imposed for applicant’s benefit. Applicant could establish that respondent was enriched and she herself was correspondingly deprived. Deprivation element did not require that disputed benefit be conferred directly by applicant on respondent. Using straightforward economic approach focusing on what applicant actually lost, it could be seen that she was deprived of right to receive entirety of policy. Applicant upheld her end of bargain but did not get what she contracted for and from that perspective it was clear that respondent’s enrichment came at applicant’s expense. Because respondent received benefit that otherwise would have accrued to applicant requisite correspondence existed. There was no justification in law or equity for fact that respondent was enriched at applicant’s expense. Beneficiary designation made pursuant to ss. 190(1) and 191(1) of Insurance did not provide any reason in law or justice for respondent to retain disputed benefit notwithstanding applicant’s prior contractual right to remain named as beneficiary and receive proceeds. Nothing in Insurance Act could be read as ousting common law or equitable rights that persons other than designated beneficiary may have in policy proceeds. Constructive trust was appropriate as personal remedy would be inadequate.

Moore v. Sweet (2018), 2018 CarswellOnt 19478, 2018 CarswellOnt 19479, 2018 SCC 52, 2018 CSC 52, Wagner C.J.C., Abella J., Moldaver J., Karakatsanis J., Gascon J., Côté J., Brown J., Rowe J., and Martin J. (S.C.C.); reversed (2017), 2017 CarswellOnt 2958, 2017 ONCA 182, G.R. Strathy C.J.O., R.A. Blair J.A., and P. Lauwers J.A. (Ont. C.A.).