Sun Life Assurance Company of Canada v. The Estate of Juanita Nelson

CITATION: Sun Life Assurance Company of Canada v. The Estate of Juanita Nelson, 2017 ONSC 4987

COURT FILE NO.: CV-10-412579

DATE: 20170823

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sun Life Assurance Company of Canada, Applicant

AND:

The Estate of Juanita Nelson, Justin Nelson, Rachel Sherrell, Kelly Seraphin and Aleesha Odessa Savoury, a minor, Respondents

BEFORE: Carole J. Brown, J.

COUNSEL: Susanne Balpataky, for the Respondents Rachel Sherrell, Kelly Seraphin and Aleesha Odessa Savoury

HEARD: August 18, 2017

ENDORSEMENT

[1] The respondent, Rachel Sherrell Kelly Seraphin (“Rachel”) and Aleesha Odessa Savoury (“Aleesha”), bring this motion for a declaration that they are solely entitled to the insurance proceeds paid into court by Sun Life Assurance Company of Canada (“Sun Life”) and seek an order that the insurance proceeds should be paid out to them.

[2] The respondents, half-sisters, are the only children of Juanita Nelson, who died December 11, 2009. Ms. Nelson had been a registered nurse with North York General Hospital (“NYGH”) from approximately January 2004, and was entitled to group life insurance coverage with Sun Life, under group insurance policy number 21287-G, certificate number 95083, in the amount of $148,500.

[3] On June 17, 2006, Juanita married the respondent, Justin Nelson (“Justin”), who was born in Grenada and continued to travel frequently to Grenada, spending considerable amounts of time there. In fact, during the course of their marriage, the evidence indicates that he and Juanita lived together for only approximately six months.

[4] On November 30, 2009, Juanita executed her Last Will and Testament, pursuant to which she bequeathed all of her personal and household belongings and her vehicle, as well as her RRSP benefits and any pension benefits payable to Justin. She left the residue of her estate to Rachel and Aleesha to be divided equally.

[5] The insurance designation in the Will states as follows:

a. I declare that the proceeds of the insurance policy shall be paid to my estate trustee to be held in a separate trust in the same manner and on the same terms as I have provided for the residue of my estate by my Will. This declaration shall be a declaration within the meaning of the Insurance Act (Ontario). The term “insurance policy” was not defined in the Will.

[6] Further, in her Will, Juanita named her mother, Iva Lavoie, as executor and trustee. Iva never probated Juanita’s Will. Iva died in or about December 2015, without a Will, and therefore no representative was appointed for Juanita’s estate.

The Life Insurance Policies

[7] In December 1999, Juanita’s financial advisor and insurance agent, Arthur Brown, suggested that Juanita purchase a life insurance policy (the Canada Life policy), which she did in the face amount of $200,000. The beneficiaries under the life insurance policy were: Rachel and Aleesha, each as to a 42.5% interest, Iva as to a 10% interest and Lashown Nympha St. Louis, Juanita’s stepdaughter as to a 5% interest.

[8] In early 2007, after she had been diagnosed with cancer, Juanita advised Mr. Brown that, in addition to the Canada Life policy, she also had a group life policy with Sun Life through her employment, as above described at para 2..

[9] On July 31, 2007, NYGH terminated its group policy with Sun Life and transferred coverage to Desjardins Financial Security. Juanita signed an Application for Enrolment for Desjardins, as well as a Change of Beneficiary Designation, irrevocably designating Rachel and Aleesha as beneficiaries of the group policy. She subsequently advised Mr. Brown that she had changed the beneficiary designation under the group policy from Justin to Rachel and Aleesha,

[10] Because Juanita was already disabled at the time of the transfer of the group policy from Sun Life to Desjardins, the policy of insurance as regards Juanita remained with Sun Life. The two Beneficiary Designations remained in Juanita’s file with NYGH and were forwarded by her employer to Sun Life after her death, in order to process her claim under the group policy.

[11] These are the only two insurance policies that Juanita had at the time of her death.

[12] Following Juanita’s death on December 11, 2009, when Juanita’s claim under the group policy was being processed in early January 2010, it was learned that Juanita’s coverage under the group policy had remained with Sun Life, rather than being transferred to Desjardins, as she was, at the time, “disabled”. As a result, given that there were two designation of beneficiary forms in existence, Mr. Brown suggested that Rachel request that Justin sign a written acknowledgement relinquishing any claim to the insurance proceeds and confirming that the monies were to be paid to Rachel and Aleesha, as had been Juanita’s wish. Justin signed such an acknowledgement on January 27, 2010. Arthur also spoke with Justin, who had come for the funeral and settlement of the estate, and urged him, in the event that the group policy proceeds were paid to Justin in error, that he relinquish the monies to Rachel and Aleesha, as Juanita had intended.

[13] In the late summer or early fall of 2010, Justin advised Mr. Brown that he had recently received a cheque from Sun Life. He attempted unsuccessfully to return it to Mr. Brown. Mr. Brown thereafter spoke with Sun Life which elected to deposit the proceeds of the group policy into court in October 2010.

[14] Justin has never laid claim to the funds. His whereabouts are unknown.

The Issues

[15] The issues that arise from this factual matrix are 1: the validity of the insurance declaration in the Will and 2: the validity of the change of beneficiary designation.

[16] As regards the validity of the insurance declaration contained in the Will, as set forth at paragraph 5 above, while the declaration refers to “insurance policy”, there is no definition of “insurance policy” or any reference to a specific policy in the Will. At the time of execution of the Will, Juanita had two insurance policies. There is nothing that would assist this Court to determine which policy was being referenced in the Will and this Court declines to make an interpretation that would, in essence, rewrite the Will and potentially alter the wishes of the testator. Accordingly, I declare that the insurance provision of the Will is ambiguous and, accordingly, fails. I understand that the Canada Life insurance policy has already been paid out pursuant to the designation of beneficiary therein.

[17] As regards the validity of the change of beneficiary designation, the Insurance Act, R.S.O. 1990, chap. I. 8, section 171 defines “declaration” as an instrument, signed by the insured that identifies the contract in which the insured designates, alters or revokes the designation of a beneficiary as one to whom the insurance money is to be payable. It is sufficient if the declaration is in writing, identifies the policy and the person who is to benefit: Urquhart Estate v Urquhart, 1999 CarswellOnt. 3917; and see Sharom v Sharom, 1992 CarswellOnt 526. Based on the evidence before this Court, I am satisfied that it was the clear intention of Ms. Nelson that her two daughters, Rachel and Aleesha, be the equal beneficiaries of her group life policy with NYGH. Prior to her death, she had told Rachel that she had made financial arrangements for Rachel and Aleesha, without providing details. She executed a change of beneficiary form, making Rachel and Aleesha irrevocable beneficiaries of the policy. Due to her circumstances, her policy was not forwarded to Desjardins, along with the change of beneficiary form, but remained with Sun Life and both designation forms remained on file.

[18] Justin, when he was approached by Rachel after Juanita’s death, signed an acknowledgement that Rachel and Aleesha were the beneficiaries of the NYGH policy. He has never made any claim to said policy in the eight years since Juanita’s death.

[19] I declare the change of beneficiary designation, dated July 18, 2007 to be valid within the meaning of section 171(1) of the Insurance Act, supra.

[20] Accordingly, based on all of the evidence before the Court, the case law and submissions of counsel, I am satisfied that the monies paid into Court by Sun Life should be paid out in equal parts to the respondents, Rachel Sherrell Kelly Seraphin and Aleesha Odessa Savoury, pursuant to the intentions of the insured, Juanita Nelson, and so order. This Court states that service of this motion on the respondents, the estate of Anita Nelson and Justin Nelson be dispensed with.

Carole J. Brown, J.

Date: August 23, 2017