Contrary to what some in the general public may believe, the law is seldom black and white. In truth, ‘shades of grey’ may be a more apt description where competing legal claims must be reconciled, especially where moral rules are required to be applied.
One such intersection of legal and moral considerations is Part V of the Ontario Succession Law Reform Act (SLRA), which may allow a dependant of a deceased person to access insurance proceeds that have been paid outside of an estate. The Ontario Supreme Court considered these provisions recently in Stevens v. Fisher, pitting a deceased’s common law spouse against a prior common law spouse who was the named beneficiary on a group life insurance policy.
A brief family history
Mark Fisher had two children during his marriage that ended in 1988, and two more children during a 10 year common law relationship. Two further common law relationships followed, about 13 months with Constance Eagles, and 11 years with Camille Stevens up to his death in 2010 at the age of 52.
Mr. Fisher’s estate consisted of a house and its contents, several old vehicles as leftovers from his occasional buy-sell activities, and about $5,000 in a bank account. These assets were well exceeded by debts that included a fully encumbered line of credit mortgage of $197,000 and over $50,000 of unsecured debt. Ms. Stevens was the named beneficiary of his only RRSP, valued at $1,911.
There were three life insurance contracts:
- Manulife policy for $50,000 payable to his daughter from his first relationship (his son having died many years earlier);
- Transamerica policy for $250,000 payable to his first common law spouse in trust for his two youngest children, one of whom is autistic and requires 24-hour care; and
- Sun Life group policy for $84,000 through his employer payable to Ms. Eagles.
Neither Ms. Stevens nor Ms. Eagles was aware of the Sun Life policy until after Mr. Fisher’s death. Specific to Ms. Eagles, a payment of $12,500 had been made in the final settlement (and court order) out of that relationship, with no mention of this insurance policy.
Making the dependant’s claim
There is a very detailed account of the interdependency of Ms. Stevens and Mr. Fisher over their decade-plus relationship. In addition to having worked for free in a business ventured from which he alone profited $38,000, she generally accommodated her work to his needs. She had principal driving duties to keep him in touch with his children and his doctors, particularly in his last years when he was in deteriorating health. During this time, she was unable to maintain steady employment, and they managed mainly on his disability income. After his death, she has struggled with multiple concurrent minimum wage part-time jobs; in the judge’s words, “Now, the only life she has involves working to survive.”
The judge had no problem concluding that Camille Stevens is clearly a dependant entitled to claim – but against what?
Ms. Stevens was not claiming a property interest in any estate assets; rather, she was claiming under SLRA Part V to obtain support payments out of the estate prior to distribution to beneficiaries. Despite this distinction, on the face of it such a claim would still have been fruitless when considering the formal estate alone, given the net negative value.
In an attempt to give effect to the claim, Ms. Stevens sought to attach the Sun Life policy payable to Ms. Eagles. Section 72 of Part V expands the formal estate to items and arrangements over which a deceased had control while living. This includes such things as gifts mortis causa (ie., gifts just before death), property held under joint ownership with right of survivorship, and life insurance owned by the deceased. Group life insurance (which is not always owned by the person whose life is insured) is a specifically enumerated item in the section.
Applying law to facts
The court rejected the argument advanced on behalf of Ms. Eagles that Ms. Stevens should also be claiming against the other insurance policies. The arrangements made to care for those other dependants should not be disturbed.
As to the quantum of the support, it bears repeating that the nature of this type of a claim is not a seizure. After canvassing a variety of ways to calculate the support amount, the judge fixed it at $65,000 based on a combination of the estate’s ability to pay and the dependant’s need. To this he added $10,000 for Mr. Fisher’s moral obligation to provide her with more than just the bare legal obligation. Ms. Eagles was entitled to the remaining value of the policy, being $9,000.