As a matter of law
As a matter of law
Joint owner succeeds on appeal against dependants and raises novel point of law
These columns are current as of the time of writing, but are not updated for subsequent changes in legislation unless specifically noted.
In two previous articles, we reviewed the case of Madore-Ogilvie v. Kulwartian (see As a Matter of Law “Despite beneficiary designation, a dependant can make a claim and be successful” and “Joint ownership reviewed again”).
The case dealt with whether a dependant relief claim had overridden the rights of a joint owner of a policy who was also a beneficiary of the policy. The lower court determined that, despite the fact that the policy was jointly owned and the surviving owner was a beneficiary under the policy, the provisions under s. 72(1)(f) of the Succession Law Reform Act (SLRA) made the proceeds available to the dependants who had not been adequately provided for by their deceased father.
That decision was later appealed to the Divisional Court by the surviving joint owner and beneficiary under the policy, Mary Kulwartian (Ogilvie). Mary was successful on appeal. The dependant children appealed that decision and the matter has recently been heard before the Ontario Court of Appeal (Madore-Ogilvie (Litigation Guardian of) v. Ogilvie Estate, 2008 ONCA 39). The Court of Appeal cited that the case presented a novel point of law.
The issue before the court was whether the jointly owned policy formed part of the estate of the deceased (Lloyd Ogilvie) for the purpose of a dependant support order.
The Divisional Court relied on the provisions of s. 199(1) of the Ontario Insurance Act to come to its conclusion. The Court of Appeal, however, did not apply this section, indicating that s. 199(1) applies to the rights in the contract, rather than to entitlement to the policy’s proceeds. Instead, the Court of Appeal went back to s. 72(1)(f) of the SLRA and considered the application of this section in a different context than what had been determined by the Superior Court in the first instance.
In this case, both Mary and Lloyd were joint owners and both were insured under the policy. The policy’s proceeds were paid on the first death. The Court of Appeal indicated that the heart of the appeal relied on s. 72(1)(f) referencing ownership in a life insurance policy.
The Court indicated that Mary’s entitlement to the proceeds came from her status as a joint owner. The Court concluded the following:
“Her entitlement flows from her status as an owner of the second policy. At the instant of Lloyd Ogilvie’s death, her joint ownership swelled to become an absolute entitlement to the proceeds of the second policy. To interpret s. 72(1)(f) so as to capture the proceeds of the second policy would be to give the court the authority to take property belonging to Mary Ogilvie, a third party who has no obligation to provide support for the deceased’s dependants.”
The Court further indicated that the section of the legislation was not written to capture a jointly owned policy.
The Court did not award costs against the dependants, even though they had lost the appeal. The Court of Appeal indicated that it was in the public interest to have this novel point of law resolved.
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January 2008