Canada Insurance Lawyer & Attorney : Michael Thomas of Harper Grey Law Firm : British Columbia, Vancouver

The plaintiff is the Insured's only child and the defendant is the Insured's sister. The sister was the named designated beneficiary under a life insurance policy with the Insurer. The daughter argued however that, prior to the Insured's death, he had intended that she be the beneficiary under the policy.

The evidence at the summary trial was that the sister had cared for the Insured when he became ill and was diagnosed with cancer. The Insured nominated her as his Power of Attorney and later nominated her under the Public Service Pension Plan, making her the beneficiary of his pension benefits. He also provided her with his bank card and instructed her to make certain purchases. A long-time friend of the Insured's gave affidavit evidence that the sister had disposed of the Insured's personal effects without his consent and had regularly accessed his bank account for her own benefit. The friend deposed that the Insured had learned of this deceit and had revoked the Power of Attorney and the nomination of his sister as beneficiary of his pension benefits. Before his death, the Insured had executed a Will naming his daughter as the sole beneficiary of his estate. The friend also deposed that he had attended with the Insured when he had revoked the nomination of pension benefits in favour of his sister and had effected a nomination in favour of his daughter. The friend stated that he and the Insured had been told that only one form would be required to nominate his daughter as beneficiary of both the Insured's pension and life insurance benefits. 

The Court considered the provisions in the British Columbia Insurance Act and specifically the requirement that declarations nominating beneficiaries be signed. Counsel for the daughter argued that, in accordance with the doctrine of mistake, the daughter was entitled to rectification under the policy since the Insured's intention was clear in that he wanted his daughter to be his life insurance beneficiary. Counsel for the daughter further argued that it was open for the Court to find a resulting trust in favour of the daughter. 

The Court concluded that, while the evidence supported the view that the Insured intended his daughter to be his sole beneficiary, the facts of the case did not come within those cases cited by the daughter concerning mistake. The form signed by the Insured designating his daughter as beneficiary clearly referred only to pension benefits and did not deal with life insurance benefits and the Insured had changed his beneficiary under the policy and pension plan in the past. Accordingly, the evidence did not meet the "substantial and convincing test" that a mistake had been made. 

With respect to finding of a resulting trust, the cases referred to by the daughter indicated that a key factor was intention at the time of the designation. In this case, there was no evidence to suggest that the Insured intended to benefit his daughter at the time he designated his sister as beneficiary under the policy and the evidence was in fact the opposite.

The Court concluded that the general rule regarding the necessity of a written designation of beneficiary under a life insurance policy must prevail and that the sister was entitled to the declaration sought.