IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Rainsford v. Gregoire,

 

2008 BCSC 310

Date: 20080312
Docket: 060948
Registry: Victoria

Between:

Kelly Marie Rainsford

Plaintiff

And:

Sandra Joan Gregoire

Defendant


Before: The Honourable Mr. Justice Masuhara

Reasons for Judgment

In Chambers

Counsel for the Plaintiff:

C.R. Purves

Counsel for the Defendant:

V. Hemminger

Date and Place of Trial/Hearing:

March 3, 2008

 

Victoria, B.C.

[1]                In this Rule 18A proceeding, each party seeks a declaration that they are the lawful sole beneficiary under a group life insurance policy underwritten by Great West Life (the “Policy”) and held by the late Deputy Sheriff Gordon Neilson, who died at the age of 51 years, on December 28, 2004. 

[2]                The plaintiff, Ms. Rainsford, is the deceased’s only child.  She is 28 years old.  Mrs. Gregoire, the defendant is the deceased’s sister.  She is 60 years old.

[3]                Mrs. Gregoire is the named designated beneficiary under the Policy.  Ms. Rainsford contends that Mr. Neilson just prior to his death intended that she be the beneficiary under the Policy and not Mrs. Gregoire.

[4]                The facts are largely agreed between counsel. 

[5]                The sum in dispute is $90,386.03 and has been paid into the trust account of Mrs. Gregoire’s solicitor pending the resolution of this dispute. 

[6]                Ms. Rainsford’s parents separated when she was three years old.  She was raised by her mother and second husband, Mr. Ross Rainsford.  Mr. Rainsford is described as her stepfather.  She had regular visits with Mr. Neilson until she turned 13 years.  She deposes that the visits discontinued because of the stresses from the less than amicable relationship between her mother and Mr. Neilson.  Visits were limited to once or twice a year for special occasions.  Some years there would be no contact.  Ms. Rainsford went by this surname while growing up.  When she turned 19 years she formally changed her surname to Rainsford.  Ms. Rainsford and the deceased only re-established regular contact after August 2004, when she was advised by Mrs. Gregoire’s son that Mr. Neilson was gravely ill.  Having had little contact with Mr. Neilson she was not aware of her biological father’s family health.  She was not even aware of where he lived.

[7]                Mrs. Gregoire over her lifetime had a close relationship with the deceased.  They saw each other each Christmas and on summer vacations.  They had regular visits and telephone contact.  He assisted her with running her donut shop in Sidney, B.C.  This business did not succeed and she encountered financial difficulties in 2003 and 2004.  She made an assignment in bankruptcy in March 2005, and appears to have been discharged December 2005.  

[8]                When Ms. Rainsford was around nine years old, the deceased named Ms. Rainsford as the beneficiary of his Policy.  The designation is dated August 17, 1989. 

[9]                Some fourteen years later, on April 23, 2003, the deceased named Mrs. Gregoire as the beneficiary of the Policy and removed Ms. Rainsford as beneficiary.  The designation form appears to be about half the size of a letter size page, akin to an index card.  It is headed “GROUP LIFE BENEFICIARY DESIGNATION” and includes the statement:

Under the GROUP LIFE INSURANCE PLAN entered into by contract under the Public Service Benefit Plan Act, I hereby revoke any previous designations, and appoint the following person(s) as beneficiary of any moneys payable upon my death:  Gregoire, Sandra Joan.

[10]            In mid-July Mr. Neilson became ill.  His friends took him to a medical clinic in Nanaimo, B.C. on or about July 21, 2004.  He was diagnosed with depression.  Mrs. Gregoire spoke with him that night.  Mrs. Gregoire remained in daily communications with Mr. Neilson.  She noticed that Mr. Neilson was not improving, but was getting worse.  His words started to slur and he was not drinking or eating much.  Mr. Neilson regularly assisted Mrs. Gregoire at her shop in Sidney, B.C., every second weekend.  Due to his illness he was not able to travel from Nanaimo to Sidney to help Mrs. Gregoire on the weekend of July 24, 2004.  Mrs. Gregoire traveled to Nanaimo on Wednesday, July 28, 2004 and spent the night there.  The next day she packed a bag for her brother and brought him to her home in Victoria.  He could not eat or hold a plate.  Mrs. Gregoire took her brother to her doctor’s office on Friday.  He was sent immediately to Victoria General Hospital where he was examined.  A CAT scan showed that Mr. Neilson had cancer that had metastasized from his lungs to his brain.  He was given a “couple” of weeks to live.  He was hospitalized from July 31, 2004 to the third week of August 2004.  While still in hospital he granted Power of Attorney to his sister on August 3, 2004.  On August 6, 2004 he executed a Will naming his sister as executrix and sole beneficiary.  Mr. Neilson was then transferred to a hospice at Royal Jubilee.  He agreed to radiation therapy to, in the words of Mrs. Gregoire, “buy more time” and “to keep him with us as long as possible”.  It is not contested that Mrs. Gregoire cared for and attended to Mr. Neilson’s needs.  She maintained contact with his nurses and doctors.  As well, she stated:  “I ensured he had his needs met, including the provision of cigarettes and alcohol”.  She deposed that Mr. Neilson instructed her to pay for items by using his bank card.

[11]            While in hospice, on August 22, 2004, Mr. Neilson executed a nomination under the Public Service Pension Plan making Mrs. Gregoire the beneficiary of his pension benefits.  The form used is a full two paged standard document for the pension plan. 

[12]            Mr. Neilson had a respite from his terminal illness and was discharged September 28, 2004.  On that date he made arrangements for an advance payment under his Policy for $40,000 to cover expenses for homecare, hospice, funeral, and living expenses until death.  His doctor stated on the request form that Mr. Neilson had three to six months of life expectancy.  He received this sum on November 5, 2004.  At first he went to live with a life-time friend in Victoria, but moved shortly thereafter to live with Mr. Williams until December 27, 2004, at which point he was readmitted to Victoria Hospice and died the next day. 

[13]            Mr. Williams deposes that while Mr. Neilson was living with him, Mr. Neilson discovered that Mrs. Gregoire had disposed of his personal effects and had regularly accessed his bank account, which he believed was for her own benefit. 

[14]            Mr. Neilson then attended Mr. Purves’ office and revoked the Power of Attorney held by Mrs. Gregoire and granted Power of Attorney to Mr. Williams, with Mr. Ireland as an alternative. 

[15]            On October 4, 2004, Mr. Neilson executed his last Will naming Ms. Rainsford as the sole beneficiary of his estate. 

[16]            On October 18, 2004, Mr. Williams attended with Mr. Neilson at the Public Service Pension Corporation office in Victoria to effect a nomination of beneficiary in favour of Ms. Rainsford.  Mr. Williams deposed that they dealt with a Ms. Sharon Roberts, who he says indicated to them that only one form was required for the nomination of both pension benefits and life insurance benefits.  As a result, he deposed that Mr. Neilson executed the Public Service Pension Plan Nomination of Beneficiary dated October 18, 2004.  He did not sign any document changing the beneficiary under the Policy. 

[17]            The two page form he signed is headed “Nomination of Beneficiaries Public Service Pension Plan” and includes the statement:  

I Gordon James Neilson hereby nominate Kelly Marie Rainsford…to receive my pension benefit in the event of my death prior to retirement (provisions outlined on reverse).  

[18]            In the material filed, the reverse of the nomination form was not provided.  Nowhere on the document does it make reference to a life insurance plan.

[19]            I was advised by agreement between counsel, as the materials do not state these facts, that Ms. Rainsford received some $97,000 as the beneficiary under the Pension Plan and that Mr. Neilson bought Ms. Rainsford a new car out of the $40,000 advance on the Policy.  The remaining funds were placed in the joint bank account he had with his daughter.  As the sole beneficiary under his Will, Ms. Rainsford also received the remaining funds in the account.

[20]            On December 6, 2004, Mr. Neilson attended the West Shore RCMP and gave a sworn audio/video taped statement in the hope that criminal charges be laid against his sister.  He was provided a K.G.B. warning prior to being sworn.  The transcript of the interview sets out his complaint that his sister wrongfully used his account for her personal expenses and had disposed of some of his personal affects without his knowledge or consent.  He also states that his daughter, Ms. Rainsford was on all of his “accounts” and “my sole beneficiary for everything”. 

[21]            I was advised by counsel that but for the Pension Benefits and the Policy, Mr. Neilson’s assets were modest. 

[22]            The materials indicate the sum alleged improperly used by Mrs. Gregoire out of his bank account is $4,375.91.  The personal items listed are some antique pieces, clothing, blankets, hockey gear, kitchen items, 36 CD’s, an old wood putter shaft, a pinky ring, a computer (no age given), a $1,500 watch, wine glasses, and a number of bottles, approximately 42, of wine, hard liquor, and liqueurs.

[23]            No criminal charges arose from Mr. Neilson’s complaint.  Mr. Purves relies upon the complaint of Mr. Williams only to support his argument regarding the intent of Mr. Neilson to eliminate Mrs. Gregoire as a beneficiary under the Policy.  He does not allege wrongdoing on the part of Mrs. Gregoire.  Mrs. Gregoire on her part says the allegations of wrongdoing are not true and that she is shocked and very saddened by them. 

[24]            The evidence of Staff Sergeant Artuso, Mr. Williams, and Mr. Ireland, indicates that Mr. Neilson was intending to designate his daughter as the beneficiary for both his pension and life insurance benefits.  Mr. Williams and Mr. Ireland depose further that Mr. Neilson did not want his sister “to get anything”. 

[25]            Mr. Purves and Ms. Hemminger agree with the general proposition set out in Norwood on Life Insurance in Canada (2nd ed.) at 22, that:

The designation of a life insurance beneficiary may be made without any formality other than that it must be in writing by the insured, with or without a witness.  Unwritten or unsigned designations are of no effect.

[26]            The Insurance Act, R.S.B.C. 1996, c. 226 makes a requirement that declarations be signed:

"declaration" means an instrument signed by the insured

(a)        with respect to which an endorsement is made on the policy,

(b)        that identifies the contract, or

(c)        that describes the insurance or insurance fund or a part of it,

in which the insured designates, or alters or revokes the designation of, the insured's personal representative or a beneficiary as one to whom or for whose benefit insurance money is to be payable;

[27]            Though Mr. Purves concedes that a designation of beneficiary in a life insurance policy is “normally unassailable”, he refers to Vodden v. Vodden Estates, [1983] B.C.J. No. 68 (BCSC); and MacGillvary and Parkington on Insurance Law, 8th ed. where it comments on the issue of rectification as follows, at 458:

Where either party to a contract of insurance establishes that the policy formally embodying the terms of the parties contract does not record the real agreement of the parties; he is entitled to have the policy rectified so that it properly expresses their true agreement. 

[28]            He noted that this passage was referenced to in Sharom v. Sharom Estate (1992), 45 E.T.R. 16 (Man. C.A.) at p. 18. 

[29]            He argues that under the doctrine of mistake the plaintiff is entitled to rectification of the Policy.  Specifically that Mr. Neilson’s intention was clear; he wanted Ms. Rainsford to be his life insurance beneficiary.  In support, the plaintiff submits that Mr. Neilson gave instructions regarding the drafting of his last Will and Testament in contemplation of changing the named beneficiary; he advised his lawyer that he had subsequently changed the designation of beneficiary; he advised the beneficiary herself that she had become the named beneficiary and, in the company of his Power of Attorney, they were told that they were in fact executing a change of beneficiary to the advantage of the plaintiff.  He also points to the statement to the RCMP that the plaintiff wanted the defendant charged and that Ms. Rainsford was his “sole beneficiary for everything”.

[30]            In the alternative, the plaintiff argues that it is open to the court to find a resulting trust in favour of Ms. Rainsford.  Counsel relies upon Neufeld v. Neufeld 2004 BCSC 25.  In that case, Cohen J. held that the law of resulting trusts includes insurance and annuity contracts.  He relied upon the analysis in Dreger (Litigation Guardian of) v. Dreger, [1994] 10 W.W.R. 293 (Man. C.A.) and stated from his analysis that Roberts v. Martindale, [1998] B.C.J. No. 1509 (B.C.C.A.) that this case did not stand for the general proposition that resulting trusts did not apply to contracts of insurance.  His analysis of Roberts was that a resulting trust was not found in that case because the intention of the donor at the time of the designation she intended that beneficiary to receive the funds.

[31]            He stated at ¶19:

In my view, what the Court decided in Roberts, supra, was simply that when the deceased named Martindale as a beneficiary of her life insurance policy, she intended that he receive the proceeds of the policy on her death.  Thus, the Court held that the learned trial judge had erred in holding that a resulting trust arose from the deceased’s mistaken belief that she changed the beneficiary of the policy, and not that in a different set of circumstances a resulting trust could not arise.

[32]            The essence of the principle stated by Cohen J. is that “for the imposition of a resulting trust the intention at the time of transfer (or designation of beneficiary) is key.”  [Emphasis added.]

[33]            In my view, neither mistake nor resulting trust are of assistance to the plaintiff.  While I recognize that the evidence supports the view that Mr. Neilson intended his daughter, who had returned into his life, some four to five months earlier, to be his sole beneficiary; the facts of this case do not come with those in the cases that were cited by the plaintiff.  The cases relate to an acknowledgement of a mistake on the part of both parties to a contract.  There is no evidence from Great West or Ms. Roberts that suggests that they were aware of Mr. Neilson’s intent to designate his daughter as sole beneficiary.  There is no evidence indicating that they acknowledge they gave Mr. Neilson the advice that is alleged to have occurred.  The only document from the meeting with Ms. Roberts is a form signed by Mr. Neilson designating Ms. Rainsford as beneficiary under his pension plan for his pension benefits.  The form he signed clearly refers to pension benefits and does not say life insurance.  This form to change the beneficiary under his pension plan is quite different from the form used to designate a beneficiary under the Policy.  I note also that Mr. Neilson had changed his beneficiary under his Policy and pension plan in the past which dilutes the plaintiff’s argument.  The evidence does not meet the substantial and convincing test. 

[34]            With respect to the finding of a resulting trust, the two cases referred to by the plaintiff: Neufeld and Dreger state that the key factor is the intention at the time of the designation.  In the instant case, there is no evidence to suggest that Mr. Neilson intended to benefit in reality his daughter, at the time he designated Mrs. Gregoire as the beneficiary under the Policy.  The evidence is quite the opposite.

[35]            In so far as imposing a remedial constructive trust as Southin J.A. in Roberts, the facts of the instant case do not allow for such relief.  In Roberts there was a separation agreement which served as the equitable bar to Mr. Martindale’s entitlement to the life insurance benefits.  I note the concluding words of Southin J.A. in this regard:  “To put it another way, it is not the mistaken belief of Mrs. Martindale which gives rise to a remedy; it is the bargain which Mr. Martindale made.”  In the instant case there was no agreement between Mr. Neilson and his sister that would bar her from a lawful claim to the subject benefit.  There was a close relationship between the two over their lifetime.  A fallout arose a few months before Mr. Neilson died.  The fact of wrongdoing is not asserted by the plaintiff. 

[36]            Hopefully, Mrs. Gregoire will do the right things to resolve the misunderstanding that was the subject of her brother’s anger. 

[37]            In sum, the general rule regarding the necessity for a written designation of beneficiary under a life insurance policy must prevail.

[38]            Though Ms. Rainsford has not achieve all of what she and others believed was her father’s intention, there is solace in knowing that in the final months of her father’s life she was able to re-establish a relationship that had been strained for years.

[39]            In the result, the declaration sought by Mrs. Gregoire, as the sole beneficiary under the Policy is granted.

[40]            Pursuant to the parties’ agreement, costs for each party, which I am told will be identical, are to be drawn from the residue of Mr. Neilson’s estate.

“The Honourable Mr. Justice Masuhara”