T-4102-76
Eileen Ethel Beaton and Betty Frances Bryant
(Plaintiffs)
v.
The Queen (Defendant)
Trial Division, Thurlow A.C.J.—Vancouver, Sep-
tember 7; Ottawa, October 17, 1979.
Crown — The Returned Soldiers' Insurance Act — Claim
by named contingent beneficiaries for proceeds of policy of
insurance issued pursuant to said Act — Whether the plain
tiffs are the beneficiaries under the policy, and whether a
purported change of beneficiaries made by the insured pursu
ant to subsequent amendments to the Act had the effect of
depriving the plaintiffs of their rights, if any, as beneficiaries
— Alternatively, whether the plaintiffs are entitled to damages
for failure of the Crown to notify the named beneficiaries in
the policy of the purported change of beneficiaries — The
Returned Soldiers' Insurance Act, S.C. 1921, c. 52, as amend
ed — Interpretation Act, R.S.C. 1927, c. 1, s. 19(1)(c).
The plaintiffs claim, as beneficiaries, the proceeds of an
insurance policy issued in 1922 under The Returned Soldiers'
Insurance Act, on the life of their father, now deceased. The
plaintiffs' mother was named as the beneficiary in the body of
the policy, and the plaintiffs were named as contingent
beneficiaries in an endorsement on the back of the policy. The
policy was in the possession of the plaintiffs' mother until her
death, and thereafter in the possession of the plaintiffs. In
1960, the plaintiffs' father executed and registered a document
changing the beneficiaries of the policy. No notice of the
change was given to the plaintiffs or their mother. The plain
tiffs' mother died in 1968, and their father died in 1972. At the
time the policy was issued, the Act required that such changes
as could be made be endorsed on or attached to the policy
document. Amendments to the Act in 1951 and 1958 made it
possible for an insured to change the beneficiaries at any time
by so stating in a document that was satisfactory to the
Minister. The plaintiffs submit that they are the beneficiaries
under the policy, and that the 1960 purported change of
beneficiary was ineffective to revoke the existing designation of
beneficiaries. Alternatively, the plaintiffs claim damages for
the failure of the Crown to notify their mother of the change of
designation of beneficiaries.
Held, the plaintiffs are the beneficiaries of the policy and as
such are entitled to the proceeds of the policy. At common law,
when a life insurance contract is made by a person on his own
life, a named beneficiary who is not a party to the contract
takes no rights at all under it, unless in the particular situation
a trust for the named beneficiary has been created. Unlike The
Married Women's Property Acts of England which declared a
trust for the beneficiaries when the contracts were expressed to
be made for the benefit of a wife or children, The Returned
Soldiers' Insurance Act, 1920, as amended in 1921, enacts that
the contract shall be for the benefit of such beneficiaries and
confers on them the legal and equitable right to payment of the
insurance money in accordance with such limitations to them as
are expressed in the policy. The instances or events in which
any designation of a beneficiary may be made after the policy
has been issued are very particularly specified and this nega
tives any general right in the insured to revoke a designation.
The policy stated that the beneficiaries could be changed to the
extent and in the manner provided in the Act, but the Act
contained no provision for changes except upon the death of a
named beneficiary or of all members of a class of beneficiaries.
The purported change of beneficiaries in 1960 did not deprive
the plaintiffs of their rights as beneficiaries. The presumption
that the amendment was not intended to authorize interference
with the rights of beneficiaries under designations existing at
the time of the amendment prevails. Thus the 1951 and 1958
amendments do not affect the rights of beneficiaries previously
named. The alternative claim for damages fails because it was
not shown that the plaintiffs had any right to enforce their
mother's right of action, if in fact such a right existed, and
because it was not shown that any loss or damage was sustained
by their mother, who predeceased their father.
Cleaver v. Mutual Reserve Fund Life Association [1892]
1 Q.B. 147, discussed. In re Engelbach's Estate, Tibbetts
v. Engelbach [1924] 2 Ch. 348, discussed. Cousins v. Sun
Life Assurance Society [1933] 1 Ch. 126, discussed. Hull
v. The King [1940] Ex.C.R. 1, referred to. Gustayson
Drilling (1964) Ltd. v. Minister of National Revenue
[1977] 1 S.C.R. 271, referred to.
ACTION.
COUNSEL:
G. F. Culhane for plaintiffs.
W. Scarth and G. P. Cassady for defendant.
SOLICITORS:
MacQuarrie, Hobkirk, McCurdy, Schuman,
Culhane & van Eijnsbergen, Vancouver, for
plaintiffs.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
THURLOW A.C.J.: In this action the plaintiffs
claim, as beneficiaries, the, proceeds of a policy of
insurance issued on June 1, 1922, by the Dominion
of Canada under The Returned Soldiers' Insur-
ance Act' on the life of their father, Ralph Asser,
now deceased. The Crown resists their claim and
by its defence asks, though not by counterclaim,
that it be declared that the proceeds of the insur
ance are payable to Donald Asser, a son of Ralph
Asser.
By their amended statement of claim filed at the
opening of the trial the plaintiffs claim, in the
alternative, damages equivalent to the insurance
proceeds for the failure of the Crown to inform
their mother, Frances Louisa Asser, since
deceased, of the steps taken by their father in 1960
to change the designation of beneficiaries of the
insurance so that she might take steps to preserve
or protect rights that she had at the time. To this
there are in my view two short answers: first, that
if Mrs. Asser ever had such a right of action it has
not been shown that the plaintiffs have any right
to enforce it in this action; and, second, that on the
facts, since Mrs. Asser predeceased Ralph Asser,
no loss or damage has been shown to have been
sustained by her as a result either of the action
taken to change the beneficiary or of the failure to
inform her of what had occurred. The alternative
claim must, accordingly, fail.
The serious claim is that the plaintiffs are the
beneficiaries and that what was done in 1960 was
ineffective to make Donald Asser the beneficiary.
The policy was issued on an application made by
Ralph Asser on March 29, 1922. Thereafter,
throughout the remainder of his life the premiums
of $9.40 per month were paid by deduction from
his war injuries' disability pension, at first, from
the portion thereof regularly being paid to him,
later through the period from 1926 to 1961 from
the portion regularly being paid to his wife,
Frances Louisa Asser, for her separate mainte
nance and for the maintenance of the two plain
tiffs, and from 1961, following the steps taken by
the insured to make Donald Asser the beneficiary,
from the portion of the pension being paid to
Ralph Asser.
The application for the insurance asked that the
policy be sent to Mrs. Asser and it is agreed that in
S.C. 1921, c. 52.
fact it was at all times until her death in June 1968
in her possession and thereafter in the possession
of the plaintiffs.
In the body of the policy, Frances Louisa Asser
is named as the beneficiary but there is on the
back an endorsement signed by the Minister of
Finance and a Member of the Board of Pension
Commissioners, who also executed the policy itself,
reading as follows:
Ottawa, June 1st, 1922.
In the event of Frances Louisa Asser, the beneficiary named
herein, predeceasing the insured, the proceeds of this policy
shall be paid in equal shares to:—Eileen Ethel Asser and Betty
Frances Asser, Daughters of the insured, upon the same terms.
The plaintiffs are the two daughters named in
the endorsement and as their mother predeceased
their father, they are the beneficiaries unless what
transpired in 1960 was effective in law to revoke
the existing designation of beneficiaries.
In August 1960 the insured, notwithstanding
that he was not in possession of the policy docu
ment, executed a form of appointment of a
beneficiary of the insurance purporting to "revoke
any previous designation of beneficiary, contingent
beneficiary, apportionment and mode of payment
of insurance money under the policy" and to direct
that the insurance money at his death be payable
to his son, Donald Asser. The document was regis
tered by the Superintendent of Veterans' Insur
ance on August 8, 1960. No notice of the change
or of its registration was given to Frances Louisa
Asser and neither she nor the plaintiffs was aware,
of what had been done.
Frances Louisa Asser died on June 8, 1968. On
July 8, 1968, the insured married the mother of his
son, Donald Asser. The insured died on October
14, 1972.
In the case presented on behalf of the plaintiffs,
it was submitted that the policy belonged to the
plaintiffs' mother as part of a separation arrange
ment and that her possession of the document was
a feature of the arrangement which secured her
right to it since at the time it was issued and for
some years thereafter the statute required that
such changes as could be made be endorsed on or
attached to the document. Having regard to the
situation appearing from the material before the
Court and in particular to the time when the
designation of the plaintiffs as contingent benefici
aries was made and to the fact that the insured
directed that the policy be sent to his wife, from
whom he was separated, it appears to me to be
probable that the policy and the arrangements
relating to it were part of an arrangement between
the insured and his wife for her separate mainte
nance and for the maintenance of the plaintiffs
and that the exclusion of the unborn child from
benefits under the policy was a deliberate act on
the part of the insured. However, as the money
payable under the policy was not assignable 2 , it
appears to me that no such arrangements between
the insured and his wife could bind the Crown or
require it to recognize rights in the policy or in its
proceeds other than or in addition to such as
proceed from the contract itself and the statute
which authorized the making of it.
Moreover, even if it could be said that the
continuance of the insurance for the benefit of the
insured's wife and of her children, if she pre
deceased her husband, was a term of the arrange
ment between the insured and his wife it was not,
as I see it, an arrangement between the insured
and the plaintiffs or which they ever had or now
have any status to enforce as against the Crown, if
indeed they have status to enforce it against
anyone.
I turn now to the question of the rights, if any,
of the plaintiffs as beneficiaries of the insurance.
In situations to which provincial laws relating to
insurance apply contracts of life insurance and the
rights arising under them are affected by the
applicable provincial statutes. In England, the law
relating to such contracts has been modified by
provisions of The Married Women's Property Acts
of 1870 and 1882. Apart from statutes, however,
the law relating to life insurance and the rights of
named beneficiaries under life insurance contracts
is the general law of contracts. While the civil law
2 Section 16 of S.C. 1919-20, c. 54.
recognizes and enforces at the instance of a person
not a party to a contract provisions made therein
for his benefit, under the common law, when a life
insurance contract is made by a person on his own
life, a named beneficiary who is not a party to the
contract takes no rights at all under it, unless in
the particular situation a trust of the insurance
money for the named beneficiary has been created.
Even where a trust for the named beneficiary has
been created, the executors of the person who
made the contract are the only parties who can
bring an action on the contract,
Whether a trust for a named beneficiary has
been created depends on the facts of the particular
situation but it appears to be settled that the mere
fact that it is expressed in the policy or the
application therefor that the insurance is for the
benefit of a named beneficiary is not sufficient to
raise a trust of the insurance proceeds for the
beneficiary, even when the beneficiary is a person
so related to the insured that a transfer to such
person would be presumed to be a gift.
The common law on the subject is discussed in
the judgment of the English Court of Appeal in
Cleaver v. Mutual Reserve Fund Life
Association', a case in which the Married
Women's Property Act, 1882, 45 & 46 Vict., c. 75,
applied. There the deceased, after effecting a
policy on his own life naming as beneficiaries his
wife, if still living at the time of his death and, if
not, his executor, was murdered by his wife. The
insurer resisted the claim for the insurance pro
ceeds on the ground that as the beneficiary was the
murderer it was against public policy to permit her
to profit from her crime. The Court, however, held
that though a trust for her had been created as a
result of the application of the statute, as it had
become impossible to carry out the object of the
trust there was a resulting trust for the estate of
the deceased. Lord Esher M.R. said 4 :
This policy of insurance is in a somewhat peculiar form, which
I suppose is of recent invention. It does not state on the face of
it with whom it is made, but states that for the considerations
therein mentioned the defendants make the insured a member,
and promise that on his death the policy money shall be
3 [1892] l Q.B. 147.
4 [1892] 1 Q.B. 147, at pp. 151-152.
payable to Florence Maybrick his wife, if then living, otherwise
to his legal personal representatives. I will first consider what
the legal effect of such a policy would be apart from the
Married Women's Property Act, and if no such act had been
passed. The contract is with the husband, and with nobody else.
The wife is no party to it. Apart from the statute, the right to
sue on such a contract would clearly pass to the legal personal
representatives of the husband. The promise is one which could
only take effect upon his death, and therefore it must be meant
to be enforced by them. The condition on which the money is to
become payable is the death of James Maybrick. There is no
exception in case of his death by the crime of any other person,
not even by the crime of the wife. Therefore the condition
expressed by the policy, as that on which the money is to
become payable, has been fulfilled. Consequently, so far, and if
no question of public policy came in, there would be no defence
to an action against the defendants by the executors of James
Maybrick. Apart from the statute, what would be the effect of
making the money payable to the wife? It seems to me that as
between the executors and the defendants it would have no
effect. She is no party to the contract; and I do not think that
the defendants could have any right to follow the money they
were bound to pay and consider how the executors might apply
it. It does not seem to me that, apart from the statute, such a
policy would create any trust in favour of the wife. James
Maybrick might have altered the destination of the money at
any time, and might have dealt with it by will or settlement. If
he had done so, the defendants could not have interfered. I
think that, apart from the statute, no interest would have
passed to the wife by reason merely of her being named in the
policy; and, if the husband wished any such interest to pass to
her, he must have left the money to her by will or settled it
upon her during his life, otherwise it would have passed to his
executors or administrators.
Fry L.J. put the matter thus 5 :
James Maybrick insured his life in the policy in question in
the year 1888, and by the proposal which was made part of the
policy he expressed the policy to be effected for the benefit of
his wife, and in the policy itself she is named as the payee of the
policy-moneys in the event, which happened, of her surviving
her husband. Independently of the Married Women's Property
Act, 1882, the effect of this transaction was, in my opinion, to
create a contract by the defendants with James Maybrick that
the defendants would, in the event which has occurred, pay
Florence Maybrick the 2000[. assured; it would be broken by
non-payment to her; but the cause of action resulting from such
breach would vest in the executors of the assured, and not in
the payee. She was, independently of the statute, a stranger to
the contract; it might have been put an end to by the contract
ing parties without her consent, and the breach of it would have
given her no cause of action against any one.
5 [ 1892] 1 Q.B. 147, at p. 157.
In In re Engelbach's Estate, Tibbetts v.
Engelbach 6 , a case in which the Married Women's
Property Act, 1882, did not apply, a father had
taken out an endowment policy for the benefit of
an infant daughter payable to her on a fixed date
twenty-one years later, if she should so long live.
The father died before that date. Romer J. after
citing a part of the above passage from the judg
ment of Fry L.J. in the Cleaver case said':
It follows from that that in the present case the daughter
could not have enforced this contract in her own name against
the insurance company, and that she was an absolute stranger
to the contract, which could have been put an end to by both of
the contracting parties without her assent. It also follows from
that decision that the mere fact that the policy moneys are
expressed to be paid to somebody other than the assured does
not make the assured a trustee of the policy or of the policy
moneys for the person so nominated.
Coming therefore as I do to the conclusion that the daughter
did not acquire any interest at law or in equity to the policy or
the policy moneys merely by reason of the fact that the policy
moneys are expressed to be payable to her, I still have to
consider whether the testator ever constituted himself a trustee
for the daughter in some other way.
It appears that in the proposal form which the father had to fill
up and sign, he inserted opposite the words "Full name and
description of the Proposer" the words "Edward Coryton
Engelbach, for his daughter Mary Noel, aged one month," and
it is said that by that means he constituted himself a trustee of
the moneys payable under the policy.
But that point is also, I think, concluded by the authority of
Cleaver v. Mutual Reserve Fund Life Association. ([1892] 1
Q.B. 157.) In the passage in Fry L.J.'s judgment, part of which
I read just now, he says: "By the proposal which was made part
of the policy he" (that is Mr. Maybrick) "expressed the policy
to be effected for the benefit of his wife," and he came to the
conclusion that, apart from s. 11 of the Married Women's
Property Act, 1882, that fact would not have constituted Mr.
Maybrick a trustee of the policy or the policy moneys for his
wife.
This case may be contrasted with Cousins v.
Sun Life Assurance Society 8 where the wife died
during the insured's lifetime and under a different
limitation to the wife as beneficiary, the Court of
Appeal held that the Married Women's Property
Act, 1882, had applied to create a trust for the
wife and that she had taken an immediate vested
interest in the contract. Lord Hanworth M.R.
6 [ 1924] 2 Ch. 348.
7 [1924] 2 Ch. 348, at pp. 353-355.
8 [1933] 1 Ch. 126.
said 9 :
In the present case we have in the policy the statement simpli-
citer: "This policy is issued for the benefit of Lilian Cousins,
the wife of the life assured, under the provisions of the Married
Women's Property Act, 1882"; and that statement creates a
trust in her favour. It would seem from those words that she
took a vested interest in the policy moneys when the policy was
created, and I have looked in vain for any statement introduc
ing a contingency to negative the creation of a vested interest in
favour of this named wife. It is suggested that the section
provides in certain events for the policy moneys reverting to and
becoming part of the estate of the insured person. But when is
this to happen? It is definitely declared that such a policy as
this creates a trust, and there is a definite direction that "The
moneys payable under any such policy shall not, so long as any
object of the trust remains unperformed, form part of the estate
of the insured." In the events which have happened, and
according to the facts which we have to consider, can it be said
that all the objects of the trust have been performed, or do
some of the trusts remain unperformed, so that what I may call
a resulting trust to the insured does not arise? On the plain
terms of the policy there remains the trust to pay over the
moneys due under the policy to the executors of Lilian Cousins,
with the result that the trust in her favour was not ended by her
death. There is still a trust which is unperformed, and in those
circumstances, the terms of the Act negative any interest
passing to the husband in the events which have happened.
Lawrence L.J. also said ' 0 :
Under the 1882 Act a policy effected by a man on his own life,
and expressed to be for the benefit of a named wife, operates in
my judgment as a valid declaration of trust inter vivos in favour
of the wife, giving her a vested absolute beneficial interest in
the policy and the moneys thereby assured from the time when
the policy is effected. In In re Adam's Policy Trusts (23 Ch. D.
525), which was a case of a policy effected under the 1870 Act
by a married man on his own life for the benefit of his wife and
children, Chitty J. said (Ibid. 527): "The view I take of the
policy is this: it is a declaration of trust operating inter vivos,
and is a good declaration of trust. ... It appears to me that the
effect of the policy and the Act taken together is to constitute a
declaration of an executed trust, and that all the Court has to
do is to express its view of the construction of the two instru
ments taken together. Now upon the policy being effected the
settlor does not reserve to himself any power of appointment;
therefore this is not an executory trust, but a trust declared on
the face of the instrument. The question then is, what is the
true construction of the instrument?" In my opinion the pas
sage which I have quoted applies to a policy effected under the
1882 Act, with the result, in the present case, that as the
plaintiff has declared in the policy that it is effected for the
benefit of his named wife simpliciter, that wife takes an abso
lute beneficial interest in the policy. The plaintiff might, no
doubt, have effected a policy under s. 11 for the benefit of his
wife if she should survive him (as was the case in Cleaver v.
9 [1933] 1 Ch. 126, at p. 134.
10 [1933, 1 Ch. 126, at pp. 137-139.
Mutual Reserve Fund Life Association ([1892] 1 Q.B. 147)
and as was the case in In re Fleetwood's Policy ([1926] Ch.
48)), or he might have taken out a policy for the benefit of any
wife who might survive him and become his widow (as was held
to have been the case in In re Brown's Policy ([1903] 1 Ch.
188)), but that is not what he has done here. He has chosen to
effect a policy simply for the benefit of his then living wife, and
has thus created a trust, of which it cannot be said that its
purpose came to an end, or that, in the words of the section,
there was no longer any object of the trust remaining to be
performed when his wife died in his lifetime; there being a
vested interest in the wife that interest passed on her death to
her executors as part of her estate. It is a curious fact, in view
of the argument which was presented by Mr. Cleveland-Stevens
and Mr. Beyfus, that in In re Fleetwood's Policy ([1926] Ch.
48) it was argued by counsel that the policy was not one under
the Act, because the benefit conferred on the wife was
expressed to be contingent on her surviving the assured. In
answer to that argument Tomlin J. said ([1926] Ch. 53): "It is
true it"—that is the policy—"is expressed to be for the benefit
of his wife in a certain event only, but the fact that the benefit
is of a limited or contingent character does not prevent it from
being a benefit within the meaning of this Act. I think,
therefore, that the policy creates a trust in favour of the wife,
but only in the terms of the trust."
It is, in my view, against this background of the
law that the effect of the nomination of Frances
Louisa Asser as beneficiary and of the plaintiffs as
beneficiaries in the event of her death in the
lifetime of Ralph Asser must be considered. Nei
ther provincial life insurance laws nor The Mar
ried Women's Property Acts of England have any
thing to do with the question. But the question is
not to be resolved on the basis of the law unaffect
ed by statute as there is an applicable statute
under which the contract was authorized and pur
suant to which the contract was made. It is neces
sary, therefore, to consider the effect which that
statute has on what otherwise would be the result.
On the basis of the common law unaffected by
statute, it seems to me to be apparent that the
plaintiffs have no status to sue on the contract and
no claim on the proceeds beyond what might fall
to them, if anything, as beneficiaries of the estate
of their father.
In 1922, when the policy was issued, the appli
cable statute was The Returned Soldiers' Insur-
ance Act, 1920 ", as amended in 1921 12 . Amend
ments were made in later years, in particular in
1951 and 1958, the effect of which will have to be
considered but in considering their effect it will be
necessary to take into account the presumption
that an amendment is not intended so as to
adversely affect rights which have already arisen
under the law prior to the amendment. That pre
sumption, which is perhaps even stronger in the
civil law of Quebec that it is in the common law,
requires that a statute be construed, if it can be, so
as to give it meaning and effect without taking
away such rights ".
The Act is entitled An Act to provide for the
Insurance of Returned Soldiers by the Dominion
of Canada. By subsection 3(1), the Minister of
Finance was authorized "[to] enter into an insur
ance contract with any returned soldier ... provid
ing for the payment of five hundred dollars or any
multiple thereof, not, however, exceeding five
thousand dollars in the event of the death of the
insured". In subsequent subsections, the insured
was given options with respect to the mode of
payment and the right to vary the mode by decla
ration endorsed on or attached to the policy. The
mode of payment referred to the amount to be
paid on death, the amount to be paid by annuity
payments and the period of the annuity. The mode
of payment might also be varied by the beneficiary
with the consent of the Minister, after the death of
the insured.
Sections 4 to 12 inclusive and sections 16 and 20
read as follows:
4. The said payments shall be made to the wife, husband,
child, grandchild, parent, brother or sister of the insured or
such other person as may by regulation as hereinafter provided
be declared to be entitled to become a beneficiary under the
contract.
5. If the insured is a married man, or a widower with a child
or children, the contract shall be for the benefit of his wife, or
of his children, or of some one or more of his children, or of his
wife and some one or more of his children; and when the
contract is effected for the benefit of more than one, the
insured may apportion the insurance money among them as he
deems fit.
6. If the insured is an unmarried man, or a widower without
children, the insurance contract shall be for the benefit of his
11 S.C. 1919-20, c. 54.
12 S.C. 1921, e. 52.
13 See Driedger on The Construction of Statutes, p. 137, and
the cases there cited.
future wife or of his future wife and children and the insured
may apportion the insurance money among them as he deems
fit; but, subject to section four of this Act, the insured may
designate an alternative beneficiary, or beneficiaries, to whom
the insurance money shall be paid in the event of his death
unmarried, or a widower without children. If the insured at his
death is still unmarried or a widower without children, and has
not designated an alternative beneficiary or beneficiaries, the
money shall, subject to sections four and eleven of this Act, fall
into and become part of the estate of the insured.
7. (I) If the insured is a female and the contract is effected
for the benefit of more than one beneficiary the insured may
apportion the insurance money among them as she deems fit.
(2) If the insured is a widow the contract shall be for the
benefit of such person or persons within the classes mentioned
in section four hereof as may be shown to the satisfaction of the
Minister to be to a substantial extent dependent upon the
widow for support.
8. Any apportionment under the next three preceding sec
tions may be made in the insurance contract, or by a declara
tion endorsed thereon or annexed thereto and signed by the
insured.
9. (I) Where an apportionment has been made as provided
in sections five and six of this Act, and one or more of the
persons in whose favour the apportionment has been made die
in the life-time of the insured, the insured may, by an instru
ment in writing endorsed on or attached to the insurance
contract, declare that the shares formerly apportioned to the
persons so dying shall be for the benefit of the wife and
children of the insured, or for one or more of them as he sees
fit. Provided, however, that the insured may designate in such
declaration a person or persons subject to section four of this
Act, to whom such shares will be paid if at the time of his death
he is unmarried, or a widower without children.
(2) In default of such declaration the shares of the persons
so dying shall be for the benefit of the survivor or survivors of
the persons in whose favour the apportionment was so made, in
equal shares if more than one.
(3) If all the persons so entitled die in the life-time of the
insured, the insured may by an instrument in writing endorsed
on or attached to the insurance contract, declare that the
insurance money shall be for the benefit of his wife, if living, or
of his surviving children, if any, or some one or more of them,
or of his wife and children or if he is unmarried or a widower
without children at the time of his death such other person or
persons subject to section four of this Act, as he may designate;
or of his wife and some one or more of his children, in such
proportions as he sees fit, and in default of such declaration, the
insurance shall be for the benefit of his wife, if living, and of his
children, if any, in equal shares ' 4 .
(4) If the insured survives his wife and all his children, the
insurance money shall, subject to section four of this Act, be
payable to such other beneficiary or beneficiaries as he may
designate. If he does not designate some other beneficiary the
insurance money shall, subject to sections four and eleven of
this Act, fall into and become part of the estate of the insured.
14 [Sic] S.C. 1921, c. 52, s. 4(b).
(5) A duplicate of every declaration made in pursuance of
this and the next preceding section shall be filed with the
Minister at the time such declaration is made.
10. If on the death of the insured a pension becomes payable
under The Pension Act or the Pension Law of the United
Kingdom, or of any of His Majesty's Dominions (other than the
Dominion of Canada) or of His Majesty's Government, or of
any of His Majesty's Allies or Associated Powers in the Great
War to any person or persons within the classes mentioned in
section four of this Act, there shall be deducted from the
benefit payable under this Act the aggregate present value of
the pension or pensions so payable computed on such bases as
may be prescribed by regulation made under the provisions of
section seventeen of this Act, and in such case there shall be
returned to the beneficiary or beneficiaries in proportion to
their respective interests under the contract the proportion of
the premiums paid (with interest at four per cent per annum,
compounded annually), which the amount of the said deduction
is of the total amount assured under the contract. Provided,
however, that this section shall not operate when the benefici
ary of the insurance is the wife of the the [sic] insured and a
pension is awarded under The Pension Act to some other
person or persons named in section four of this Act.
11. (1) If the insured survives all the persons to whom the
death benefit may be paid under the provisions of section four
of this Act, or if all the said persons die before the payment of
the instalments of the death benefit have been completed, the
estate of the insured shall be entitled to receive only the amount
by which the reserve under the contract at the time of the death
of the insured exceeds the sum of the payments so made.
(2) In this section the word "reserve" means the net premi
um value of the contract on the basis of the British Offices Life
Tables, 1893, Om (5), with interest at the rate of four per cent
per annum.
12. When no apportionment is made of the insurance money
as hereinbefore provided, all persons interested as beneficiaries
under this Act shall be held to and shall share equally therein.
16. The insurance money payable under the contract shall be
unassignable and shall not be subject to the claims of creditors
of the insured or of the beneficiary.
20. No application for insurance shall be received under this
Act after the first day of September, nineteen hundred and
twenty-two.
It appears to me that the primary purpose of
these provisions was not to provide a method by
which the insured might enhance his own estate
but rather to provide a means by which he might
provide for particular classes of beneficiaries who
might be expected to be dependent on the insured
for their maintenance and support. Unlike The
Married Women's Property Acts which declared a
trust for the beneficiaries when the contracts were
expressed to be made for the benefit of`a wife or
children, this statute enacts that the contract shall
be for the benefit of such beneficiaries and in
section 4 it goes a step further in enacting that the
proceeds shall be paid to them. It thus, in my view,
confers on them the legal, as well as the equitable,
right to payment of the insurance money in
accordance with such limitations to them as are
expressed in the policy 15 . Further, the provisions
appear to negative any right in the executors of the
insured to enforce the contract except in the speci
fied cases in which the statute provides that the
estate of the deceased shall be entitled to the
proceeds. In such instances, it enacts that the
insurance money shall "fall into and become part
of the estate of the insured". Moreover, the
instances or events in which any designation of a
beneficiary may be made after the policy has been
issued are very particularly specified. This, in my
view, negatives any general right in the insured to
revoke a designation or to designate or change
beneficiaries. The policy contains a condition stat
ing that:
The beneficiary or beneficiaries named in this policy and the
apportionment of the insurance money thereto, if more than
one, may be changed by the insured to the extent, and in the
manner, provided in The Returned Soldiers' Insurance Act.
but the statute contained no provision under which
any change could be made except in particular
instances upon the death of a named beneficiary or
of all members of a class of beneficiaries. Even
then the insured was limited in designating
beneficiaries not only to those within the class of
persons that he could name but, and this is signifi
cant, he could do so only with respect to the share
or portion of the insurance money previously
apportioned to the deceased beneficiary. It seems
to me to follow that, once named as a beneficiary,
the wife or child of an insured had a proprietary
right in the contract and its proceeds to the extent
of the interest provided by the limitation to such
beneficiaries and, so long as they lived, they could
not be deprived of that right by any purported
revocation of the designation.
15 In Hull v. The King [1940] Ex.C.R. 1, the Crown was held
liable to the beneficiary of a policy in a proceeding by petition
of right.
I am accordingly of the opinion that, subject to
the effect of an amendment made in 1951 (of
which more hereafter), the purported revocation of
the designation of beneficiaries made by Ralph
Asser in 1961 was ineffective to deprive the plain
tiffs of their rights as beneficiaries, that upon their
mother's death during their father's lifetime they
became, under the designation endorsed on the
policy, the only beneficiaries and that they are
entitled to the proceeds.
I must, however, deal with the effect of the
amendment of 1951, which was itself amended in
1958. It is upon it that the Crown relies. The
policy itself purports to be made pursuant to the
Act and it expressly provides that it is subject to
the provisions of the Act and any amendments
thereto and Regulations made thereunder "as fully
as if the same were written above the signatures
hereto set". That, in my opinion, has the effect of
incorporating by reference the provisions of the
Act and of the amendments that had been made at
the time the policy was issued but in my view it is
unthinkable that the wording of the contract was
intended to incorporate, as well, any amendments
that Parliament might thereafter enact. Moreover,
the wording I have quoted does not appear to be in
harmony with an interpretation that the clause
embraces future amendments the content of which
was then unknown and could not have been written
above the signature.
But is the amendment made by the 1951 Act
and amended in 1958 of its own force capable of
bringing about an equivalent result by giving to
the insured a right which he formerly did not have
to change the beneficiaries at any time thus
depriving the existing beneficiaries of what they
had acquired under the provisions of the contract
and the law as it had been? By the 1951 amending
statute sections 4 to 10 inclusive of the Act were
repealed and new provisions were substituted. The
new section 4, with some changes, dealt with the
situations covered by the former sections 5 to 9
inclusive. It did not re-enact the subject matter of
the former section 4. A new section 5 added a new
provision for alternative beneficiaries, a class
which did not include wives or children, and
defined the events in which they might be desig-
nated as beneficiaries. A new section 6 then
provided:
6. Subject to the provisions of this Act, the insured may at
any time change the beneficiary or beneficiaries, or the alterna
tive beneficiary or beneficiaries, or vary the option as to the
mode of payment or the apportionment of the insurance money,
by so stating in a document that is satisfactory to the Minister.
In interpreting these provisions there are several
matters which I think must be borne in mind.
They applied to a scheme of insurance, the policies
of which had all been issued on applications made
on or prior to August 31, 1933, the limitation of
section 20 of the Act of 1920 having been several
times extended by statutes the last of which was
chapter 38 of the Statutes of Canada, 1930. The
provisions must accordingly be regarded as apply
ing to insurance contracts existing at the time they
were passed.
But under paragraph 19(1)(c) of the Interpreta
tion Act 16 , in which the presumption in respect of
vested rights as it applies to the repeal of statutory
enactments is itself made statutory 17 , "unless the
contrary intention appears" rights which persons
named as beneficiaries had acquired under section
4 of The Returned Soldiers' Insurance Act, which
in my view were vested rights to the monies pay
able under the contract subject to defeasance only
if they predeceased the insured, were not affected
by the repeal of section 4.
In 1951 when these amendments were made the
class of returned soldiers of the Great War of
1914-18, who alone could apply for insurance
under the Act, would have been in their fifties or
older and the time would have arrived when, for
the most part, the children of such returned sol
diers would have grown up and have been no
longer dependent on the returned soldiers and
when occasions would be becoming more frequent
in which a new designation of beneficiaries under
such policies, within the narrow limits in which
that could be done under the Act as it was in 1922,
16 R.S.C. 1927, c. 1.
' 7 Vide: Gustayson Drilling (1964) Ltd. v. M.N.R. [1977] 1
S.C.R. 271 per Dickson J. at p. 283.
would be required by reason of the death of named
beneficiaries within the lifetime of the insured.
With respect to persons who for the first time
would become beneficiaries under such new desig
nations it would involve no interference with exist
ing rights of beneficiaries to enact a provision
subjecting the designation of the new beneficiaries
and their rights thereunder to change at the
instance of the insured and this, in my opinion, is
the area and the scope in which the new section 6
was intended to and could operate. On this inter
pretation, the provision would not adversely affect
or interfere with the rights of beneficiaries previ
ously named but would apply to a growing class of
new beneficiaries designated as such after its
enactment.
Moreover, the opening words of the section
"Subject to the provisions of this Act" appear to
me to confirm that it was not intended by the
amendment to interfere with the scheme of the Act
or the rights theretofore created under it. Counsel
for the Crown sought to interpret these opening
words narrowly and as applying only to the restric
tions on classes of persons who might be benefici
aries but while there is no reason to doubt that
they refer to and include such restrictions, the
wording is not limited to particular provisions of
the Act. In this respect, it is noticeably different
from the wording "subject to subsections one and
two" used in subsection 4(4) 18 to refer to the same
restrictions. By its wording, section 6 is subject to
all the provisions of the Act, including the provi
sions giving a right to designate new beneficiaries
only on the death of a beneficiary and only to the
extent of the share of such beneficiary. Moreover,
if the interpretation contended for were adopted, it
seems to me that it would be quite unnecessary to
have a provision giving a right to name beneficiar
ies when a beneficiary dies and that provision of
the Act would be redundant. The power given by
section 6 is, however, made subject to such
provision.
Finally, there is no express statement in the
enactment that it is to apply to existing designa
tions of beneficiaries which at the time could not
be altered or revoked by the insured.
18 S.C. 1951, c. 59, s. 3.
These considerations lead me to conclude that
the presumption that the amendment was not
intended to authorize interference with the rights
of beneficiaries under designations existing at the
time of the enactment should prevail.
Section 6 was repealed by section 2(2) of chap
ter 41 of the Statutes of Canada, 1958, and a new
section 6 substituting the word "contingent" for
the word "alternative" was enacted, the word
"contingent" having been substituted for the use of
the word "alternative" in amendments made in the
same Act respecting the class established by the
1951 Act as "alternative" beneficiaries. This, in
my view, makes no difference in the scope or field
in which the provision operates.
It follows that the amendment introduced as
section 6 by the Act of 1951, as amended by the
Act of 1958, did not authorize the purported revo
cation in 1960 of the designation of the plaintiffs
as beneficiaries of the policy here in question in
the event, which occurred, of the death of their
mother in the lifetime of the insured.
The action, therefore, succeeds. There will be
judgment declaring the plaintiffs to be the
beneficiaries of the policy in question and to be
entitled to the proceeds thereof and to costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.