Moore v. Sweet 2018 SCC 52

Case Background:

• Incident: Mr. Moore purchased a $250,000 life insurance policy in 1985, naming his then-wife Ms. Moore as the sole beneficiary. After their separation in 1999 and subsequent divorce in 2003, they verbally agreed that Ms. Moore would continue paying the premiums in exchange for remaining the beneficiary.
• Change of Beneficiary: In 2000, Mr. Moore moved in with Ms. Sweet and later named her the irrevocable beneficiary of the policy, contrary to his agreement with Ms. Moore. He did not inform Ms. Moore of this change.

Legal Issues:

• The rights of an irrevocable beneficiary versus those of a person with a pre-existing contractual agreement regarding a life insurance policy.
• Whether the concept of unjust enrichment applies in this scenario, thereby entitling Ms. Moore to the insurance proceeds.

Supreme Court’s Decision:

Majority Opinion:

• Justice Côté: Delivered the majority judgment, allowing the appeal and ruling in favor of Ms. Moore.

1. Unjust Enrichment:
   • The Court determined that Ms. Sweet received a benefit at the expense of Ms. Moore, who had continued paying the premiums based on a contractual agreement with Mr. Moore. This constituted unjust enrichment as there was no legal justification for Ms. Sweet to receive the insurance proceeds.
2. Constructive Trust:
   • The majority ruled that Ms. Moore was entitled to the insurance money under a constructive trust. This means Ms. Sweet would hold the insurance money for the benefit of Ms. Moore. The rationale was that Ms. Sweet’s designation as the irrevocable beneficiary did not override Ms. Moore’s contractual rights and the contributions she made towards the policy premiums.
3. Application of the Insurance Act:
   • The Insurance Act’s provisions allowed Mr. Moore to name a beneficiary but did not negate Ms. Moore’s rights stemming from her contractual agreement with Mr. Moore. The Court emphasized that previous agreements and equitable principles, like unjust enrichment, could influence the rightful claim to the insurance money.

Dissenting Opinion:

• Justices Gascon and Rowe: Argued that there was no unjust enrichment and that the irrevocable beneficiary designation should stand, allowing Ms. Sweet to keep the insurance proceeds.

The Supreme Court of Canada ruled in favor of Ms. Moore, finding that she was entitled to the $250,000 life insurance proceeds based on the principle of unjust enrichment and her pre-existing contractual agreement with Mr. Moore. The majority decision highlighted the importance of honoring such agreements and ensuring fairness in situations where equitable principles apply, even when there is a conflicting designation of an irrevocable beneficiary.