The application judge found that an oral agreement was made between Moore and the deceased in 2000, shortly after their separation, to the effect that she would pay the premiums from that time forward and would be entitled to the proceeds of the policy on his death. That finding was not contested on appeal. Annual premiums of $507.50 had previously been paid from their joint account. After the separation, the premiums were paid solely by Moore pursuant to that agreement.

In September 2000, shortly after the agreement he had made with Moore, and in contravention of it, the deceased changed the beneficiary under the life policy to Sweet. In fact, he purported to make her the irrevocable beneficiary. He did not advise Moore of this change, and she continued to pay the premiums for the policy until his death some 13 years later. While the deceased did not advise Moore of the change, the majority of the court considered that he had not acted surreptitiously. The change was carried out through the offices of, and after discussions with, Moore's brother-in-law, a life insurance broker who was married to Moore's sister, who herself worked for a life insurance company. While this is not spelled out in the decision, it appears that Moore never became aware, prior to the deceased's death, that a change in beneficiary had been made. What is not disputed is that the deceased did not tell Moore of the change in beneficiary. As previously indicated, Moore continued to pay the premiums on the policy until his death.

In May 2002, after both the separation and the change in beneficiary, but prior to their divorce, Moore and the deceased entered into a separation agreement. The agreement was silent about the policy or anything related to it.

The breakdown of the marriage between Moore and the deceased was related to his struggles with chronic pain, and with alcohol and substance abuse issues, which in turn led to his financial irresponsibility and the buildup of burdening debts. Both of them declared bankruptcy in early 2000, shortly after their separation and at about the time of their oral agreement regarding the life policy. Little is known about Moore's financial circumstances post-separation, although arrears of child support payments by the deceased accumulated in that time period.

Sweet too suffered from chronic pain and was disabled. She and the deceased cared for each other during their 13 years of cohabitation. They had financial hardships which led them to borrow from friends and relatives to make ends meet.

The issue was whether the proceeds of the life policy upon the death of the deceased were payable to Moore or to Sweet.

The issue, of course, was whether the proceeds of the life policy upon the death of the deceased were payable to Moore or to Sweet. The application judge held that they were payable to Moore, but that was reversed by the majority decision on the appeal.

Were the equities heavily weighted on one side or the other?

The following comment was made in the majority decision:

[T]his is not one of those cases – in spite of what it may seem at first impression – where the "equities" are heavily weighted in favour of one party or the other.

It is the case that Ms. Moore had an oral agreement with Mr. Moore that if she paid the premiums she would receive the proceeds of the Policy. It is the case that she paid the premiums. And it is the case that Mr. Moore breached the agreement by designating Ms. Sweet as the irrevocable beneficiary under the Policy.

On the other hand, Mr. Moore was a man of limited means, living in the post-separation period on a disability pension, and suffering from the disabilities associated with his physical, mental and substance abuse issues. Ms. Sweet – who is herself disabled – took care of Mr. Moore and, for practical purposes, provided him with a home, a place to live, and a supportive family during the 13 years of their relationship.²

The last part of that comment refers to circumstances which might be described as part of the overall "equities" of the situation, but they are equities of a general nature, only indirectly connected to the equitable considerations deriving from the main issue at hand, that being the wrongdoing committed by the deceased and the loss sustained by Moore as a consequence of that wrongdoing. General and indirect equitable considerations can often be found to purportedly justify wrongdoing of one sort or another, but that does not make those considerations particularly relevant or weighty when the scales of justice are engaged to determine whether there is a balance, or anything close to one, in the positions of the competing parties.

The relevant "equities" should not include such unrelated, or at its highest indirectly related, personal circumstances of the wrongdoer, or of those to whom he or she intends to provide benefit from the wrongdoing. Those circumstances form an incidental part of the overall picture, but nothing more. Otherwise, the effect is to incentivize wrongful conduct. In my respectful opinion, the relevant equitable considerations in this case were heavily weighted in favour of Moore who, as a result of the deceased's duplicitous conduct, continued to pay insurance premiums over a lengthy time period in the belief that she would ultimately be the beneficiary of the policy proceeds.

Was there an enrichment?

There can be no doubt that Sweet would be enriched by receiving the proceeds of the insurance policy. This was not an issue in the majority decision.

Was there a corresponding deprivation?

The majority did not consider it necessary to deal with this issue. Sweet's arguments were:³

• The "deprivation" elements of an unjust enrichment claim are measured on the basis of a "straightforward economic approach", and "other considerations, such as moral and policy questions, are appropriately dealt with at the juristic reason stage of the analysis";
• Any corresponding deprivation suffered by Moore was limited to the loss of the monies she paid on account of premiums ($7,000);
• Moore was not entitled to count her "expectation losses", a breach of contract concept, as deprivation for unjust enrichment purposes; and
• The amount of the premiums paid was insufficiently significant, compared to the amount of the insurance proceeds ($250,000), to warrant the imposition of a constructive trust.

...the whole purpose of a constructive trust is to prevent persons "from retaining property which in ‘good conscience' they should not be permitted to retain".

Without dealing separately with each of those positions, suffice to say that the deprivation sustained by Moore which "corresponded" to the enrichment enjoyed by Sweet was the loss of the insurance proceeds, not the premiums that were paid by Moore. Furthermore, the whole purpose of a constructive trust is to prevent persons "from retaining property which in ‘good conscience' they should not be permitted to retain".⁴ The "property" which Sweet should not, in good conscience, have been permitted to retain was the payout on the insurance policy, not the premiums that had been paid by Moore. The arguments made by Sweet on this issue were artificial, unrealistic, and not persuasive.

Was there a valid juristic reason?

It was on this issue that the majority decision concentrated, and on which they arrived at their conclusion. Two alleged errors by the application judge were identified:⁵

1. He failed to recognize the significance of Sweet having been designated an "irrevocable" beneficiary under the Insurance Act (Ontario); and
   
   
2. He failed to apply the mandated two-step analysis to the juristic reason assessment.

The significance of the irrevocable beneficiary designation

Emphasis was placed on the elements of certainty and predictability that resulted from the regime imposed by the statute with regard to irrevocable beneficiary designations.⁶ "Simply put, we read this legislative regime as leaning heavily in favour of payment of the proceeds of life insurance policies to those named as irrevocable beneficiaries."⁷ That, it was said, provided a juristic reason for Sweet's receipt of the policy proceeds.⁸

Was it, however, a legitimate and valid juristic reason? Let it not be forgotten or overlooked that the deceased had no authority to engage the irrevocable beneficiary mechanism in the statute. He took advantage of Moore's long-term funding of a life policy the benefit of which he had, without her knowledge, underhandedly and in breach of an agreement, transferred to Sweet. His conduct was improper and dishonest. Can an enrichment be founded on a juristic reason thus improperly and unjustly engaged? Will equity permit a person to do indirectly what he cannot do directly – in this case, changing the beneficiary of the life policy – by engaging, in contravention of an agreement and therefore without a shred of authority, and furthermore in a clandestine manner, a statutory mechanism? Those are questions that the majority did not consider and which, in my view, are more pertinent to the resolution of the dispute.

That is not to say that the certainty and predictability referenced by the majority do not constitute a significant consideration weighing in favour of the result preferred by them. An analogy may be drawn to the equitable principle that a bona fide purchaser for value, without notice of the seller's lack of or defect in title, is nevertheless generally entitled to good and binding title and possession.⁹ The same considerations of certainty and predictability, and of protection of third parties who have based their conduct on reasonably held beliefs regarding the property in issue, underlie that principle. A key distinction, however, is that the bona fide purchaser has provided value. It is questionable whether Sweet did so in this case; there is no indication that the care, comfort, and support she gave to the deceased would not have been given regardless of his designation regarding the life policy.¹⁰ Furthermore, commercial considerations underlie the principle regarding bona fide purchasers of property for value. There were no such considerations here. The effect of the majority decision is to extend the principle to apply to bona fide purchasers without notice, whether or not they have provided value.

Reference was also made to the fact that Moore had not been designated an irrevocable beneficiary in accordance with the provisions of the Act. A simple contractual promise, albeit one made for valuable consideration, was said not to be sufficient to circumvent the clear statutory requisites for an irrevocable beneficiary designation.¹¹ That, however, appears to beg the question of what circumstances will be sufficient to bar, through the imposition of a constructive trust on the basis of unjust enrichment, the consequences of a wrongful use of a statutory mechanism; or at least it answers that question by saying that a constructive trust based on unjust enrichment can never be employed where a statute contains specific requirements that have not been met. The following comment, however, was made immediately thereafter by the majority:

I need not go so far as to say that the designation of a beneficiary as an irrevocable beneficiary under the Insurance Act invariably trumps a prior claimant. There may be cases where the insured, by agreement, has placed the policy or its proceeds beyond his or her ability to deal with them, and, therefore, beyond his or her ability to make the purported irrevocable designation. This, however, is not one of those cases.¹²

The question may be asked: Why wasn't this "one of those cases"?

In addition to relying on the fact that there had not been compliance with the statutory requirements, the majority indicated that there was no evidence suggesting that the oral agreement made between Moore and the deceased included a term that the deceased would never alter the beneficiary under the life policy.¹³ This, with respect, appears to be a "grasping at straws" position. While there may not have been evidence that that was an express term of the agreement, the facts are that: an agreement was made whereby Moore would pay the premiums and would ultimately be entitled to the proceeds of the life policy; in contravention of the agreement, and almost immediately after the agreement had been made, the deceased changed the beneficiary under the policy; the deceased failed to alert Moore to the change in beneficiary, and Moore continued to pay the premiums in accordance with the agreement over a period of 13 years after their separation; the deceased permitted Moore to continue to pay the premiums during that lengthy time period despite not having informed her of his duplicitous conduct. To rely, in those circumstances, on the absence of an explicit term that the deceased would not alter the beneficiary is somewhat baffling. It is also difficult to challenge the following statement made by Lauwers J.A.:

The critical point to observe is that the Act assumes the deceased had the right to irrevocably designate in the first place. By entering into a binding agreement with the appellant, the deceased relinquished his ability to designate another party as either a revocable or irrevocable beneficiary under his insurance policy, since a person cannot give what he does not have.¹⁴

...his failure to advise Moore of what he did is evidence that he was well aware of that implied term.

If necessary, a strong argument can be made that it was an implied term of the agreement that the deceased would not change the beneficiary, and that his failure to advise Moore of what he did is evidence that he was well aware of that implied term.

The majority focused on procedure rather than substance, such as when they said: "The change of beneficiary form was properly executed and filed with the insurer pursuant to s. 191(1) of the Insurance Act."¹⁵ While the execution and filing was proper, the underlying designation was not. The following comment is particularly significant:

There is no dispute that "[a]t the heart of the doctrine of unjust enrichment lies the notion of restoring a benefit which justice does not permit one to retain"…Courts, however, have been careful to guard against the remedial constructive trust turning into a completely unprincipled, open-ended remedy, the application of which depends on a particular judge's subjective view of what is unjust or goes against good conscience – or, to put it in its classic formulation, that is dependent "upon the length of the Chancellor's foot".¹⁶

Were Moore to succeed, however, it would not be a case of "palm tree justice". Moore's entitlement to the proceeds of the life policy was firmly grounded in the agreement that she and the deceased had made, as well as the premium payments she had made in the reasonable expectation – in fact, the contractual entitlement - that the proceeds of the policy would ultimately go to her. These were objective, not subjective, factors supporting her position, and furthermore were matters of considerable substance and weight. It is far easier to describe the result of the majority decision as one based on subjective considerations.

Did the application judge fail to engage in a required two-step analysis?

In seeking to avoid an unprincipled, subjective, "palm tree justice" approach, the Supreme Court of Canada¹⁷ has adopted a two-step analysis to the juristic reason assessment. The two steps are:

1. The plaintiff must show that no juristic reason from an established category, such as a contract, a disposition of law, a donative intent, or other valid common law, equitable, or statutory obligation, exists to deny recovery (emphasis added);¹⁸ and
   
   
2. If that prima facie case has been made out by the plaintiff, the defendant can show that there is another reason to deny recovery. Where, in other words, the plaintiff has satisfied that initial burden, a de facto burden of proof is placed on the defendant to show the reason why the enrichment should be retained. As part of the defendant's attempt to rebut, courts should have regard to two factors: the reasonable expectations of the parties, and public policy considerations.¹⁹

The majority held that Moore had failed to satisfy the first step of the analysis, thereby making it unnecessary to consider the second step. They said that "absent exceptional circumstances, the existence of the statutory regime relating to revocable and irrevocable beneficiaries... falls into an existing recognized category of juristic reason: it constitutes both a disposition of law and a statutory obligation".²⁰ There are, however, two responses to that view. First, the disposition of law, statutory obligation, or other established category of juristic reason that were said to be applicable in the circumstances of the case must have been validly established.  It cannot be said here that the deceased's invocation of the statutory irrevocable beneficiary mechanism through wrongful and deceitful conduct met that test. Second, there were exceptional circumstances in this case. Even if the argument were made that the deceased did not act deceitfully, it can hardly be argued that his conduct, and the circumstances generally, were not "exceptional".

...the court ought not to permit a statute to be employed as a vehicle for duplicity, dishonesty, and unfairness.

Simply put, the court ought not to permit a statute to be employed as a vehicle for duplicity, dishonesty, and unfairness.

Had the second part of the analysis been conducted, it is my view that Sweet would not have been able to show, taking into account the reasonable expectations of the parties and public policy considerations, a legitimate reason why she ought to have retained the life policy proceeds.

Should a constructive trust have been imposed on the basis of "good conscience" alone?

The majority alluded to:

considerable debate in the jurisprudence and in academia about whether resort to the remedial constructive trust in Canada is now limited to two categories since the Supreme Court of Canada's decision in Soulos – unjust enrichment and wrongful acts – thereby eliminating resort to a more elastic "good conscience" trust, i.e., one based on no more than a sense of fairness to the effect that it would be "against all good conscience" to deny a plaintiff recovery in the circumstances of a particular case.²¹

The majority found it unnecessary to consider this issue, nor do I do so, apart from making the comment that it would appear to be anomalous to apply the doctrine of unconscionableness in contract law, but not to do so outside the context of a contract²² where a valid juristic reason has nevertheless led to an unconscionable result. The scope of this issue is simply too wide for consideration in this brief case comment.

Constructive trust imposed because of a wrongful act

Reference was made in the majority decision to the second of the two general categories where a remedial constructive trust may be imposed, that being where property has been obtained by a wrongful act (the first being unjust enrichment).²³ No consideration was given to that category because wrongful act was said not to have been asserted by Moore.²⁴ Why no assertion of wrongful act was made in the circumstances of this case is puzzling.

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¹ Moore v Sweet 2017 ONCA 182, leave to appeal to the SCC granted August 17, 2017.
² Majority decision, at paras. 62-64.
³ Majority decision, at para. 74.
⁴ Soulos v Korkontzilas [1997] 2 S.C.R. 217 at para. 17.
⁵ Majority decision, at para. 76.
⁶ Majority decision, at para. 82.
⁷ Majority decision, at para. 83.
⁸ Majority decision, at para. 83.
⁹ See, for example, i Trade Finance Inc. v Bank of Montreal 2011 SCC 26 at paras. 19 and 60-61; The Chippewas of Sarnia Band v Attorney General of Canada, Ont. C.A. released December 21, 2000, at paras. 303-09; and Paton Estate v Ontario Lottery and Gaming Corporation 2016 ONCA 458 at paras. 87, 90 and 106 (Hoy, A.C.J.O., dissenting on other grounds).
¹⁰ The majority decision stated (at para. 66): "On these facts, it cannot be said that Ms. Sweet is no more than a volunteer who gave nothing in exchange for being named irrevocable beneficiary, or that she is simply the recipient of a windfall. She was a 13-year spouse with heavier than normal caregiving duties (both she and Mr. Moore were disabled in varying degrees) and was the person primarily responsible for the home that they lived in." That comment, however, fails to take into account the likely fact that Sweet would have acted no differently had the deceased not made her the irrevocable beneficiary of the life policy. The designation made by the deceased was a gift to Sweet which he had no right to bestow. In my view, it is accurate to say that she received a windfall.
¹¹ Majority decision, at para. 90.
¹² Majority decision, at para. 91.
¹³ Majority decision, at para. 88. See also para. 105.
¹⁴ At para. 228.
¹⁵ Majority decision, at para. 77.
¹⁶ Majority decision, at para. 92, based on statements reproduced from Garland v Consumers' Gas Co. 2004 SCC 25.
¹⁷ In Garland, and reaffirmed in Kerr v Baranow 2011 SCC 10 and Pacific National Investments Ltd. v Victoria (City) 2004 SCC 75.
¹⁸ See also the heading "A Valid Juristic Reason" placed above para. 76 of the majority reasons (emphasis added here as well).
¹⁹ Majority decision, at paras. 95-96.
²⁰ Majority decision, at para. 99. See also paras. 26(iii), 81 and 83.
²¹ Majority decision, at para. 100.
²² We should not forget that there was a contract in this case – the one made between Moore and the deceased.
²³ Majority decision, at paras. 100, 102 and 106.
²⁴ Majority decision, at paras. 106 and 107.

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