COURT FILE NO.: 05-329-19
DATE: 20210427
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF THE DECEASED GOODTRACK
BETWEEN:
The Applicant Ray-Ellis
Applicant
– and –
Terry Goodtrack in his capacity as executor of the Estate of the deceased Goodtrack, William Goodtrack, Edith Goodtrack, CIBC World Markets Inc., CIBC Trust Corporation, CIBC Wood Gundy and Canadian Imperial Bank of Commerce
Respondents
Maneesha Mehra, for the Applicant
Andrea McEwan, for Terry Goodtrack
Kelly A. Charlebois for the CIBC Respondents
Angela Casey and Zara Wong for William Goodtrack and Edith Goodtrack
HEARD: April 9, 2021
C. gilmore, J.
overview
[1] The Applicant seeks a declaration that the proceeds of the Locked in Retirement Account (“LIRA”) held by Kirk Goodtrack (“the deceased”), and registered with the CIBC defendants (“CIBC”) in account number 61-56398-11 be paid to her forthwith. The Applicant relies on a beneficiary designation for the LIRA, signed by the deceased in 1997, in which she is the designated beneficiary (the “1997 designation”).
[2] The Application is opposed by the deceased’s parents William and Edith Goodtrack (“the Parents”) who are the beneficiaries of the deceased’s Estate. The Parents’ position is that the deceased signed a new beneficiary designation form on September 29, 2001(the “2001 designation”) which revokes the prior designation. Alternatively, they argue that the Applicant released her rights to any of the deceased’s property by way of a final release in their divorce proceeding dated March 1, 2005. In the further alternative, The Parents submit that the Applicant would be unjustly enriched and the Estate correspondingly deprived if the LIRA proceeds were paid to the Applicant by way of the 1997 designation given that the LIRA already formed part of the deceased’s net family property which was settled as part of the overall settlement of the matrimonial matters in 2005.
[3] As will be set out below, I find that the 2001 designation (whose authenticity is not challenged) revokes the 1997 designation. The LIRA proceeds are ordered to be paid to the Parents forthwith.
FACTUAL BACKGROUND
[4] Terry Goodtrack (“the Executor”) is the Executor of the deceased’s Estate. The deceased died at age 53, on September 3, 2018. The Parents are the beneficiaries of the deceased’s Estate. The deceased’s will does not make any mention of the LIRA.
[5] The Executor resides in Ottawa. The deceased lived in Saskatchewan for most of his life. The Parents are living in Saskatchewan. The Applicant lives in Toronto.
[6] The deceased and the Applicant met when they were both clerking for the Superior Court of Justice in Toronto. They were married in 1993. They had one child, Danielle, who was tragically killed in a car accident along with the Applicant’s mother in 1997. The trauma drove the couple apart and they separated in 1998.
[7] After an acrimonious separation, the parties divorced in November 2001. The Applicant remarried shortly thereafter. The deceased never remarried and had no children.
[8] The parties signed Minutes of Settlement in 2005, which required the deceased to pay the Applicant $100,000 in exchange for a dismissal of the matrimonial proceeding. Full and final releases were signed with respect to property and support. The Parents provided a copy of a net family property statement, dated 2003, in their materials. The net family property statement lists the value of the LIRA at $67,714. The release does not make any specific mention of the LIRA or any of the listed property in the net family property statement. It is a broad and general release of the kind often found in final matrimonial settlements.
[9] After their matrimonial litigation ended, the Applicant had no contact with the deceased until shortly before his death when he attempted to contact her several times. Given the tragic circumstances of their marriage and subsequent separation, the Applicant would not take the deceased’s calls. The Applicant was not aware that the deceased was very ill at that time.
[10] The deceased made a will leaving his Estate to his Parents, who both survived him. The deceased’s assets and beneficiaries are all located in Saskatchewan, other than the LIRA account which is the subject of this litigation. That account is held by CIBC in Toronto.
[11] The LIRA originated at Nesbitt Burns and was moved from Nesbitt Burns to Midland Walwyn in October 1997. In June 1998, Midland Walwyn was purchased by Merrill Lynch. In December 2001, Merrill Lynch was purchased by CIBC. CIBC changed the LIRA account number to 561-56398-11 in July 2002 (the “LIRA account”). As of December 31, 2020, the value of the LIRA account was $166,200.11.
[12] On October 28, 1997, while the parties were still married, the deceased signed a beneficiary designation form naming his then spouse the Applicant as the beneficiary of the Midland Walwyn LIRA.
[13] In 2001 The deceased changed the beneficiary designation of his Maritime Life Pension Plan from the Applicant to his Parents. A copy of the deceased’s letter to Maritime Life dated September 5, 2001 forms part of the court materials.
[14] On September 29, 2001, the deceased signed another beneficiary designation changing the beneficiaries of the LIRA from the Applicant to his Parents. The 2001 designation was witnessed by the deceased’s friend Ralph Tulipano. CIBC has been unable to locate the 2001 designation in its records despite exhaustive searches. Its records continue to show the Applicant as the beneficiary of the 1997 designation. No further documents have been located by CIBC.
[15] It is the 2001 designation that forms the basis for the dispute in this case. The Parents argue that the 2001 designation is valid and revokes the 1997 designation even though a copy of it cannot be found in CIBC’s records. The Applicant argues that the 2001 beneficiary designation is invalid because it was never sent to CIBC, it is not in CIBC’s records and the deceased’s actions subsequent to the 1997 confirm that he had no intention to change the 1997 designation. The Applicant, however, does not challenge the authenticity of the signatures on the 2001 designation or allege any fraud in relation to it.
[16] In 2007, a CIBC employee, Ralph Kuntyj, sent the deceased a blank beneficiary change form for the LIRA account. In 2012, following a call from the deceased to Mr. Kuntyj, another beneficiary change form was sent to the deceased as it appeared that the Applicant was still the beneficiary on CIBC’s records.
[17] In a recorded call with Mr. Kuntyj on January 19, 2015, the deceased told Mr. Kuntyj he did not want the Applicant to be the designated beneficiary of the LIRA account and another blank beneficiary form was sent to him.
[18] After the deceased’s death, the Executor contacted CIBC about the LIRA. At first CIBC could only find a screen shot of the LIRA data but not the actual beneficiary designation. Eventually, the original 1997 designation was found. Later, when going through the deceased’s personal documents, the Executor discovered a photocopy of the 2001 designation. The original copy has never been found.
[19] After the discovery of the October 1997 designation, the Executor contacted the Applicant and requested that she sign a release of her interest in it. The Executor took the position that the LIRA formed part of the Estate and the Applicant had released any interest in the deceased’s Estate in 2005 by way of the releases attached to the Minutes of Settlement.
[20] The Applicant sought information about the LIRA and when the Executor resisted, she commenced this Application in November 2019.
THE LAW AND THE ISSUES
Issue One – Has the 1997 Designation Been Revoked?
[21] The Applicant submits that the 1997 designation has not been revoked because of the deceased’s affirmation in 2015 that the Applicant was the beneficiary and his failure to change the designation despite being provided with beneficiary change forms on three separate occasions.
[22] Further, while the deceased may have contemplated a change, given that he was divorced from the Applicant, he never took steps to implement such a change. Therefore, the properly executed and registered 1997 designation must stand.
[23] Respectfully, I find that the Applicant has given insufficient importance to the 2001 designation and its effect under the Succession Law Reform Act, RSO 1990, c. S. 26 (the “SLRA”). It is well known that LIRAs are a form of pension fund under the federal Pension Benefits Standards Act, 1985, RSC 1985, c. 32 (2nd Supp.) (the “PBSA”). The PBSA provides that provincial law relating to the designation of beneficiaries applies to such plans.
[24] The relevant provincial law in this case is s. 51 of the SLRA:
Designation of Beneficiaries
51 (1) A participant may designate a person to receive a benefit payable under a plan on the participant's death,
(a) by an instrument signed by him or her or signed on his or her behalf by another person in his or her presence and by his or her direction; or
(b) by will,
and may revoke the designation by either of those methods.
[25] I agree with the Parents’ counsel that the 2001 designation is an “instrument” pursuant to s. 51(1)(a) of the SLRA. The deceased signed that instrument. The authenticity of it has not been challenged by the Applicant.
[26] The SLRA does not require that the beneficiary designation be “registered” or even sent to the banking institution. While I agree with Ms. Casey that doing so is a good idea, it is not mandatory under the legislation. Specifically, s. 53 of the SLRA discharges the administrator of the plan on paying out the proceeds based on the latest beneficiary designation. As such, simple presentation of the 2001 designation, which accords with the requirements in s. 51(1)(a), is sufficient for CIBC to pay out as it is the “latest” beneficiary designation.
[27] In RBC Life Insurance Company v. Monaco et al., 2010 ONSC 75, aff’d 2010 ONCA 855, there were competing beneficiaries of a life insurance policy: the deceased’s brother and the deceased’s common law spouse. In that case, the only copy of the change of beneficiary was a photocopy. Experts were called on the issue of handwriting analysis given the brother’s allegation that the deceased’s signature had been forged. RBC still had the original beneficiary designation which was in favour of the brother.
[28] The Court found that no fraud had been proven and relied on the photocopy of the change of beneficiary form. The Court accepted that the form was valid in part because “the designation does not have to be made with any formality other than it must be in writing”: at para. 106. While the RBC case related to a designation under the Insurance Act, RSO 1990, c. I.8, and not the SLRA, neither statute requires that a new beneficiary designation be filed or registered with the institution.
[29] The Applicant argues that the RBC case does not apply because it dealt with a forgery, which is not alleged here. I disagree. Forgery was only one element of that case. The Court also considered the formalities required to change a beneficiary designation. In RBC, the Court accepted a photocopy of the changed designation with the wrong policy numbers as valid.
[30] The Applicant argues that the deceased’s actions in calling CIBC and having them send him beneficiary change forms on three separate occasions but not returning them cements his intention not to change the 1997 designation. While I agree that it is puzzling that the deceased did not seem to recall he had already changed the LIRA designation in 2001, the fact is that he never actually made any further changes to the LIRA designation after 2001. Calls to the bank or discussions with a bank employee (such as the one in 2015) have no legal consequences with respect to any beneficiary designation. In short, any action, inaction, understanding or misunderstanding on the deceased’s part, short of an actual written change of beneficiary, is irrelevant in law with respect to the status of an existing beneficiary designation.
[31] Finally, the factual background with respect to the 2001 designation has some relevance. On September 5, 2001, the deceased changed his Maritime Life pension plan beneficiary designation from the Applicant to his Parents. A mere three weeks later, he changed the LIRA designation from the Applicant to his Parents. The deceased was clearly turning his mind to rearranging his personal affairs, perhaps because of the separation but more likely because of the Applicant’s remarriage which occurred in 2001. In any event, the timing of the two events is of some import in terms of explaining how the 2001 designation came about.
Relevance of CIBC’s Inability to Locate the 2001 Designation
[32] I find that this issue is not relevant to the legal considerations in this case. Indeed, it would have been easier for all involved if CIBC had the original of the 2001 designation in its records.
[33] However, there are several factual issues at play. First, there were several iterations of the holding institution which cannot be ignored. While the LIRA was started with Nesbitt Burns, the records were subsequently transferred to Midland Walwyn, then Merrill Lynch and finally CIBC, over a period of five years. It would not be surprising if records were lost or misplaced.
[34] In any event, the fact that CIBC is able to locate the 1997 designation but has no record of the 2001 designation is irrelevant in law as I have already found that the 2001 designation meets the statutory requirements. The fact that CIBC cannot locate the 2001 designation does not derogate from its validity.
What is the Effect of the Matrimonial Settlement and Release?
[35] In order to resolve their matrimonial litigation, the parties entered into Minutes of Settlement on July 20, 2005. The relevant parts of the release are set out below:
This release [ ... ] is a full and final settlement of all issues between Kirk Goodtrack and the Soma Ray-Ellis and all rights and obligations arising out of their relationship between the parties including their marriage, separation and divorce. [ ... ]
[ … ] Kirk Goodtrack and Soma Ray-Ellis hereby release each other from all claims at common law, in equity or by statute against each other, including but not limited to all claims under the Divorce Act, the Family Law Act, and the Succession Law Reform Act (or any successor or similar legislation whereby a spouse or former spouse is given a cause of action against his or her spouse or the spouse’s estate for relief in the nature of support), for spousal support of any kind, possession of property; ownership of property [ ... ], division of property, compensation for contributions to property, an equalization payment, interest, penalties, and legal costs.
Kirk Goodtrack and Soma Ray-Ellis each hereby renounces any interest or entitlement either may presently have, or that they may have in the future, in the other's estate upon the death of the other whether the other dies leaving a valid Will or dies intestate without a valid Will. Without limiting the generality of the foregoing and for greater certainty, The Kirk Goodtrack and Soma Ray-Ellis agree that on the death of either party, the surviving party shall not share in the deceased’s estate whether the deceased died testate or intestate, nor shall the surviving spouse act as a personal representative of the deceased's estate, and the estate of the deceased party shall be distributed as though the surviving party had died first.
Kirk Goodtrack and Soma Ray-Ellis hereby confirm that each remained financially independent of the other following their separation and to this date, each continues to be financially independent of the other, and hereby releases his or her rights to spousal support from the other forever. [ ... ]
[ … ] Kirk Goodtrack and Soma Ray-Ellis] wish to be allowed to get on with their separate and independent lives, no matter what changes may occur. [ ... ]
Kirk Goodtrack and Soma Ray-Ellis agree that the terms of the Agreement and this Release are inextricably linked. [ ... ]
[36] The Applicant argues that this release cannot oust the properly executed 1997 designation as the release does not make reference to the LIRA or to any revocation of the 1997 designation. Further, she argues that the payment made by the deceased to the Applicant ($100,000), by way of global settlement, does not specify that it is an equalization of the LIRA.
[37] I disagree with the Applicant on both points. First, the release signed by the parties is broad and general and is a mutual release of property. It is not necessary in such releases to provide a specific list of property that is included. It includes all property.
[38] Second, it cannot be the case that the payment to the Applicant did not include an equalization of the LIRA and in fact all property listed in the 2003 NFP statement. Even if the NFP statement was out of date or the numbers slightly inaccurate, I do not think that matters. What is clear is that the parties turned their minds to the separation of every aspect of their lives including their property, debts and support claims.
[39] It is not reasonable for the Applicant to take the position that it is unclear whether or not the $100,000 included an equalization of the LIRA. The Applicant could have put forward her own evidence on that point (including her own version of the NFP statement) but chose not to do so. As such, the only available evidence is the NFP statement provided by the deceased’s Parents.
[40] Given the above, I find that the Applicant has already received her share of the LIRA by way of the equalization of its value on the date of the separation and is precluded from making any further claim in relation to it.
[41] If I am wrong with respect to my conclusion with respect to the LIRA having already been equalized between the parties, I rely on Burgess v. Burgess Estate (2000), 2000 CanLII 16989 (ON CA), 52 O.R. (3d) 61 (C.A.), for the proposition that the release revokes the 1997 designation. In that case, the deceased signed a beneficiary designation designating his wife as the beneficiary of his Deferred Profit-Sharing Plan (“DPSP”). The parties then divorced but the deceased never changed the beneficiary designation. The Application judge held that the ex-wife was entitled to the entire proceeds of the DPSP by virtue of the beneficiary designation.
[42] The Court of Appeal held that the ex-wife was only entitled to half the proceeds of the DPSP as set out in the parties’ separation agreement. The Court found that the releases in the separation agreement acted as a revocation of the prior designation of the SLRA. While it is true that in Burgess, the separation agreement made specific reference to the DPSP, the relevance of Burgess to the case at Bar is the Court’s finding that the settlement of the DPSP in the separation agreement acted as a revocation of the previously signed beneficiary designation.
Should a Constructive Trust be Imposed on the LIRA in Favour of The deceased’s Estate
[43] If I am wrong with respect to the status of the 1997 designation in that it was not revoked by the 2001 designation or the 2005 release, I find that a constructive trust should be imposed on the LIRA for the following reasons:
a. The Applicant would be unjustly enriched by receiving the designation;
b. The Estate would suffer a corresponding deprivation;
c. There is no juristic reason for the Applicant’s enrichment given the revocation of the 1997 designation.
[44] The facts in this case are somewhat similar to those in Conway v. Conway Estate, 2006 CanLII 1448 (Ont. S.C.). In that case, the parties were separated and the husband paid the wife an equalization payment of $85,000. The equalization calculation included the value of the husband’s pension plan; however, there was no mention of the husband’s insurance policy in the parties’ separation agreement. After the husband died, it was discovered that he had not changed the beneficiary designations on his pension plan or life insurance and his ex-spouse remained as beneficiary.
[45] The Court held that had the surviving spouse received the survivor benefit under the pension plan, she would have been unjustly enriched given the terms of the separation agreement. The life insurance proceeds, however, were treated differently because they were not “property,” as defined by the Family Law Act, and had no value on the valuation date.
[46] In the case at Bar, there can be no dispute about the status of the LIRA as property on the date of separation. Its value on that date was $67,714.90 and it clearly formed part of the parties’ net family property. The parties turned their mind to the property issues between them and settled all issues. If the Applicant receives the LIRA proceeds, she will be receiving the value of that asset twice over and would by unjustly enriched.
[47] I find, therefore, that if all of my other conclusions are wrong, there is evidence to support a finding that the LIRA should be imposed with a constructive trust in favour of the deceased’s Estate.
Public Policy Arguments
[48] Counsel for the Applicant raised several arguments related to the status of the unsubmitted, but changed, beneficiary designations. It was argued that failing to provide such change forms to the holding institution would create chaos and legal uncertainty.
[49] I do not agree. As counsel for the deceased’s Parents points out, it would certainly be better if people sent in their changed beneficiary forms so that the institution would have a record of them but the SLRA, in its current form, does not require that. As set out above, the SLRA protects institutions by discharging their obligation on payout of the most recent designation in their possession.
[50] In this case, there is no evidence of what happened to the original 2001 designation. Perhaps it was sent in and lost given the various institutional mergers and acquisitions happening at that time. Perhaps the deceased lost it. However, this is speculation which is not relevant to the legal issues; I have already found that the 2001 designation is valid, even if it is a photocopy and even if CIBC does not have a record of it.
ORDERS
[51] The Application is dismissed. The proceeds of the LIRA shall be forthwith paid out to the Parents as the designated beneficiaries.
COSTS
[52] If the parties cannot agree on costs, they may provide written submissions of no more than three pages (exclusive of any Bill of Costs or Offer to Settle) on a seven-day turnaround beginning with Ms. Casey seven days from the date of this judgment. Costs submissions are to be sent by email attachment directly to my assistant at therese.navrotski@ontario.ca. If no costs submissions are received within 35 days, costs will be deemed to be settled.
C. Gilmore, J.
Released: April 27, 2021
COURT FILE NO.: 05-329-19
DATE: 20210427
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
The Applicant Ray-Ellis
Applicant
– and –
The Executor Goodtrack in his capacity as executor of the Estate of The deceased Goodtrack, William Goodtrack, Edith Goodtrack, CIBC World Markets Inc., CIBC Trust Corporation, CIBC Wood Gundy and Canadian Imperial Bank of Commerce
Respondents
REASONS FOR JUDGMENT
C. Gilmore, J.
Released: April 27, 2021