Article content continued

Following their separation, Michelle and Lawrence agreed that Lawrence would maintain a policy of life insurance on his life, designating Michelle as the beneficiary. In exchange, Michelle agreed to be solely responsible for the cost of the insurance premiums. Unfortunately, Lawrence did not uphold his part of the bargain and designated his new common law spouse, Risa, as the irrevocable beneficiary of the life insurance policy. According to Risa, Lawrence named her as the beneficiary to ensure she did not worry about paying for her rent and medication.

In accordance with the agreement she reached with Lawrence, Michelle continued to pay the premiums with the expectation that, if Lawrence died, she would receive the proceeds. Lawrence did not provide any notice to Michelle that she was no longer the beneficiary. Michelle was unknowingly maintaining a life insurance policy for the benefit of her former spouse’s new spouse.

Lawrence passed away approximately 13 years after Risa was named as the beneficiary. Throughout that time, Michelle faithfully paid the insurance premiums to the extent of approximately $7,000. Lawrence died without any assets of significance. Following Lawrence’s death, Michelle sought to collect on the policy and was advised by the insurer that she was not the beneficiary. Michelle commenced court proceedings in respect of her entitlement to the proceeds of the policy.

The court was asked to determine whether Risa or Michelle was entitled to receive the proceeds from the life insurance policy. More specifically, did the facts of this case amount to “unjust enrichment” such that Michelle ought to receive the life insurance proceeds notwithstanding Risa’s designation as beneficiary under the policy? Further, if unjust enrichment was found, Michelle asked the court to impress the proceeds with a constructive trust in her favour.