Court File and Parties
COURT FILE NO.: FC-15-131 DATE: 2018/11/01 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Karine Malboeuf, Applicant -and- Phillip Hanna, Respondent
BEFORE: Justice Pam MacEachern
COUNSEL: Gil Rumstein, for the Applicant Eric Letts, for the Respondent
HEARD: September 4, 2018
Endorsement
[1] This is a motion made by the Applicant, Ms. Malboeuf, for a finding that the Respondent, Mr. Hanna, is in contempt of the court because he has failed to name Ms. Malboeuf as irrevocable beneficiary of a policy of life insurance as required by paragraph 68 of the Order of Justice Kershman dated January 9, 2018.
[2] For the reasons that follow, I find that the Respondent is not in contempt of the court and dismiss the Applicant’s motion.
Factual Background
[3] The Order of Justice Kershman dated January 9, 2018 is a final order resolving the legal issues arising from the parties’ separation. The Order was issued based on Minutes of Settlement executed by the parties.
[4] Paragraph 68 of the Order provides:
“68. The Respondent will arrange for an insurance policy on his life with a face value of Two Hundred and Eighty Thousand Dollars ($280,000). Within thirty (30) days of the date of this Order, the Respondent will contact his insurer and make arrangements to change the existing beneficiary designations to “irrevocable” beneficiary designations in favour of the Applicant “in trust for the children” (if allowed by the insurer). He will pay the insurance premiums required to maintain any life insurance policies and he will maintain the Applicant as the irrevocable beneficiary of each while he has an obligation to contribute to any of the children’s support. When all of the Respondent’s support obligations to the children end, he may name any person or his estate as the beneficiary of each life insurance policy. If required by his insurance company, the Applicant will consent in writing to the Respondent changing the beneficiary designations on his policy or policies at the applicable time.”
[5] Paragraph 70 of the Order imposes a similar obligation on Ms. Malboeuf to maintain life insurance.
[6] The parties agree that the obligation to maintain life insurance is to secure their respective child support obligations.
[7] Mr. Hanna has a life insurance policy through RBC Insurance. The children are the irrevocable beneficiaries of coverage totaling $280,000. Ms. Malboeuf is the designated trustee for the children but her designation as trustee is not “irrevocable”.
[8] Mr. Hanna has made a formal written request to RBC to designate Ms. Malboeuf as the irrevocable trustee on the policy. RBC has advised that they do not allow such a designation on their policies.
Positions of the Parties
[9] Ms. Malboeuf’s position is that Mr. Hanna is in breach of the Order because he has not irrevocably designated her as the trustee for the children under his policy. Her position is summarized as follows:
- Paragraph 68 requires Mr. Hanna to irrevocably designate her as trustee for the children under his life insurance policy;
- Mr. Hanna is in breach of paragraph 68 because he has not done so; and
- A finding of contempt is warranted because Mr. Hanna has not acted in good faith to take all reasonable steps to comply with the Order by, for example, obtaining a further order requiring RBC to make the trustee designation irrevocable or purchasing a new life insurance policy from an insurer that allows an irrevocable trustee designation.
[10] Mr. Hanna’s position is that he has complied with paragraph 68 by requesting that Ms. Malboeuf be designated as the irrevocable trustee, and therefore this designation would be in place but for the fact that it is not allowed by the insurer.
Law
[11] Civil contempt requires that the moving party establish beyond a reasonable doubt that:
- the order alleged to have been breached states clearly and unequivocally what should or should not be done;
- the alleged contemnor had actual knowledge of the order's terms; and
- the alleged contemnor intentionally did the act the order prohibited or intentionally failed to do the act the order required [1].
[12] Unless the motion for contempt satisfies all three parts of the test, the motion for contempt must be dismissed.
[13] Even where all three parts of the test are satisfied, a judge retains an overriding discretion to decline to make a contempt finding where it would be unjust to do so, such as where the alleged contemnor has acted in good faith to take reasonable steps to comply with the relevant court order [2].
Analysis and Findings
[14] I find that Mr. Hanna is not in breach of paragraph 68 of the Order.
[15] Paragraph 68 does not clearly and unequivocally require Mr. Hanna to irrevocably designate Ms. Malboeuf as trustee, regardless of RBC’s policy to not allow such designations. In fact, paragraph 68 expressly makes the beneficiary designation conditional on whether it is allowed by the insurer. In this case, the insurer does not allow the trustee designation to be irrevocable. Mr. Hanna is not in breach.
[16] Ms. Malboeuf argues that the clear intention of the parties was that she would be irrevocably designated as trustee. This is inconsistent, however, with the express wording that is used that makes this conditional - “if allowed by the insurer”. Regardless, such an intention cannot be the basis for a contempt finding in the absence of clear and unequivocal wording.
[17] Ms. Malboeuf argues that Mr. Hanna should be found in contempt if, after the January 9, 2018 Order, he had intentionally purchased a life insurance policy that did not allow her to be irrevocably designated as trustee, and for this reason should be required to obtain insurance from a new insurer that allows such a designation. I do not find that the clear and unambiguous meaning of paragraph 68 would support this finding either, but in any event, the onus lies on Ms. Malboeuf to prove beyond a reasonable doubt that Mr. Hanna’s RBC policy was not already in place at the time that the Minutes of Settlement were executed. The wording of paragraph 68 recognizes that Mr. Hanna already had life insurance in place. It refers to him changing the existing beneficiary designations. There is no evidence before me that support a finding that Mr. Hanna intentionally purchased a policy that did not allow for the required designation.
[18] Ms. Malboeuf argues that Mr. Hanna is in contempt because he has not done everything possible to designate her as the irrevocable trustee under the policy. She argues that RBC would allow an irrevocable trustee designation if Mr. Hanna obtained a court order requiring them to do so. She has not brought such a motion before me. Ms. Malboeuf argues that Mr. Hanna should be the one required to bring such a motion, with notice to RBC, in order to discharge his obligations under paragraph 68. Again, this is not the clear and unambiguous meaning of Mr. Hanna’s obligations under paragraph 68. There is nothing in paragraph 68 that imposes on Mr. Hanna a duty to take further steps if the insurer does not allow the irrevocable trustee designation. I do not find that Mr. Hanna’s failure to bring such a motion results in him being in contempt.
[19] A court has an overriding discretion to decline to make a contempt finding where the alleged contemnor has taken all reasonable steps to attempt to comply with the order. But this obligation to take all reasonable steps to attempt to comply with the order only arises after there is a finding that the three required components of the test for contempt have been met. This is not the case here.
[20] Accordingly, I dismiss the Applicant’s motion.
Costs
[21] If the parties cannot agree on costs of this motion, the Respondent may file submissions with respect to costs on or before November 16, 2018. The Applicant may file submissions with respect to costs on or before November 23, 2018. Cost submissions of both parties shall be no more than three pages in length, plus any offers to settle and bill of costs, and shall comply with Rule 4 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 [3].
Justice Pam MacEachern Date: November 1, 2018