COURT FILE NO.: CV-16-23203
DATE: 20191219
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Debra Correne Iles, Jennifer Leslie Iles, Jillian Correne Iles and Dawson David Marshall Iles
Plaintiffs
– and –
Jennifer Gow (also known as Jennifer Price) and the Estate of Michael Andrew Iles
Defendants
Dean H. Clark, for the Plaintiffs
Candice A. Kennedy, for the Defendants
HEARD: June 17, 2019
reasons on summary judgment motion
carey j.:
Facts and Issues
[1] The plaintiff Debra Correne Iles was married to Michael Andrew Iles on April, 27, 1991.
[2] When they separated on January 23, 2011, they were parents to three children, Jennifer, Jillian, and Dawson.
[3] After separation, they entered into a separation agreement, dated June 22, 2011, that purported to resolve the issues from the marriage breakdown. The relevant terms of the agreement are as follows:
- CHILD SUPPORT
(1) The husband shall pay child support to the wife for the three children of the marriage, namely, Jennifer Leslie Iles, born July 6, 1994, Jillian Correne Iles, born October 16, 1996 and Dawson David Marshall Iles, born February 24, 1999, in the amount of $1,162.00 per month in accordance with the Tables pursuant to the Child Support Guidelines based on the husband’s income of $59,201.00 commencing May 1, 2011 and continuing on the first day of each subsequent month that follows.
(2) The obligation for the husband to pay child support set out in this Agreement shall form a first charge on the estate of the husband and shall be binding on the executors, heirs and administrators of the husband upon his death.
- INSURANCE
For so long as the husband is required to pay support for the said children, the husband will designate the wife as irrevocable beneficiary in trust for the said children on the insurance coverage owned by or available to the husband through his place of employment either now or in the future.
- BINDING ON EXECUTORS AND ADMINISTRATORS
This Agreement and every covenant, provision and term herein contained shall enure to the benefit of and be binding upon the husband and the wife and each of them and their respective heirs, executors, administrators, and assigns, unless otherwise ordered and decreed by a Court of competent jurisdiction.
- AMENDMENT TO CONTRACT
Any amendment to this contract will be unenforceable unless made in writing and signed by each party before a witness.
- RELEASE AGAINST THE ESTATE OF THE OTHER
Without restricting the other waivers and releases in this contract, and subject to transfer or bequests which may be made, each party waives all rights and releases and discharges the other from all claims that he or she may have in the future acquire under the laws of any jurisdiction, and particularly under the Family Law Act and the Succession Law Reform Act entitling him or her upon the death of the other.
[4] The plaintiffs say this is a valid agreement that is legal and enforceable and never amended in writing as required by para. 31 of the agreement.
[5] When Mr. Iles died on May 31, 2015, he was employed at In-Tek Inc. in Tilbury, Ontario. He had an interest in a policy of life insurance bearing group plan #56459-003 through his employment. The insurer was Great‑West Life Assurance Company.
[6] As at the time of his death, Mr. Iles had not designated Ms. Iles as a revocable beneficiary of the policy in trust for the children. This was in contravention of para. 11 of the agreement the plaintiffs say. Jennifer Gow was named the sole beneficiary of the Great West Life policy.
[7] Ms. Iles alleges that Ms. Gow has improperly converted the proceeds of the insurance policy to her own use.
[8] Ms. Iles alleges that the policy was unlawfully changed to benefit Ms. Gow as the sole beneficiary and that has resulted in unjust enrichment and a windfall for Ms. Gow.
[9] Ms. Iles says she has cared for her children, made financial provision for them, and would have advanced money for and to the children if she had received the proceeds of the insurance. She says if she had received the proceeds, she would have passed accounts to the Ontario Superior Court and tendered evidence of the particulars of the advances she made to the children. She says her attempt to recover such advances has been frustrated by Ms. Gow.
[10] The defendant Gow and on behalf of Michael Iles’ estate, say that the separation agreement required Michael to designate Debra Iles under a policy through his employer, which at the time was Advantage Engineering. He did this as required but, in February of 2013, Advantage Engineering ceased operations. The defendants say that when Michael found alternative employment with In-Tek Inc. in April 2013, he was not eligible for benefits, including the group policy of life insurance until July of 2014. He designated his wife Jennifer as beneficiary of a $350,000 policy in trust for the children in November of 2013. He did this to ensure that his child support obligations were satisfied. In doing so, the defendants say that the purpose and intent of s. 11 of the separation agreement was met. They point out that as a result of the children being named as beneficiaries of the State Farm policy, each of the children received a payment of $116,666.67, as opposed to the $31,666.67 they would have received under the Great West Life policy, well in excess of Michael’s support obligations to them.
The Law and Analysis
[11] It is clear and agreed by both parties that summary judgment can only be given where there is no genuine issue for trial.
[12] Here, the defendants say that the support obligation in s. 11 of the separation agreement was frustrated when Michael Iles lost his employment. He no longer had the benefit of an employment-related insurance policy. It is certainly arguable that until he found further employment that included insurance benefits, he was not obligated under s. 11 to secure his child support payments. It appears that the children have received a higher benefit from the new policy put in place before he obtained the Great West Life policy through his employment. In my view, the defendants’ argument that judgment in favour of the plaintiffs would result in a windfall to the plaintiffs and a deprivation to the defendant, Jennifer Gow, is an arguable position.
[13] This is a very different set of facts than those in Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303, relied on by the plaintiffs’ counsel. There, the agreement provided that the wife would pay the husband’s insurance policy premiums in order to remain the sole beneficiary of the policy. She did so. A constructive trust was found in her favour after the husband changed the beneficiary to his new common law partner without the wife’s knowledge. She had continued to pay the premiums until the husband’s death. The finding of a constructive trust there prevented a windfall to the new spouse.
[14] The defendants also assert that Debra Iles did not come to the court with clean hands, as she violated s. 19 of the separation agreement by applying to act as executor of Michael’s estate and then acting as such until August 31, 2016, when she renounced in order to permit her to name the estate as a defendant in this action. By s. 19 of the separation agreement, both parties released their ability to act as executor or collect from the other’s estate. I cannot conclude that this argument has no air of reality to it and is not a genuine issue for trial.
[15] In conclusion, the combination of issues raised by the defendants are genuine issues for trial in my view. Accordingly, the motion for summary judgment by the plaintiffs is dismissed.
[16] In the event the parties are unable to agree on costs, they may make brief written submissions (three double-spaced pages), along with a costs outline and any relevant offers to settle, according to the following timeline:
a) The defendants may provide submissions within 15 days;
b) The plaintiffs may provide submissions within 15 days thereafter; and
c) The defendants may provide reply submissions within 5 days thereafter.
Original signed by Justice Thomas J. Carey
Thomas J. Carey
Justice
Released: December 19, 2019
COURT FILE NO.: CV-16-23203
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Debra Correne Iles, Jennifer Leslie Iles, Jillian Correne Iles and Dawson David Marshall Iles
Plaintiffs
– and –
Jennifer Gow (also known as Jennifer Price) and the Estate of Michael Andrew Iles
Defendants
REASONS on summary judgment motion
Carey J.
Released: December 19, 2019