Good evidence was key to persuading the court in this Quebec case
Under the Quebec Civil Code (the Code), section 2459 indicates that upon divorce a beneficiary designation of the policyholder’s married spouse or the civilly unified spouse becomes void. Doing this is almost like erasing the beneficiary designation. But what happens when there is good evidence that suggests that this section of the Code should not be applied? In Grenier v. Union-Vie and Forbes (February 6, 2018) 200-17-025027-160; 2018 QCCS 616; AZ-51470636; EYB 20180290779; 2018 EXP-694 (Que. S.C.) the Quebec Superior Court had to consider this issue to determine who should receive life insurance proceeds.
Robert Forbes was the owner of an individual life insurance policy. He named his spouse, Mrs. Grenier, as a beneficiary. The two divorced in 1997 and Mr. Forbes died in early 2016. Mrs. Grenier sent the insurance carrier the necessary paperwork needed, including a death certificate, to make a claim for the insurance proceeds. In the summer of 2016, she received a letter from the insurance carrier and a cheque payable to Mr Forbes’ estate. She requested a new cheque issued in her name since she was the beneficiary of the policy. The insurance carrier responded that it would not issue any payment to her since she and Mr. Forbes divorced in 1997 and that voided her designation as beneficiary. After that, Mr. Forbes brother, Ronald, filed a declaration of intervention requesting the court pay the insurance proceeds to him as liquidator of Mr. Forbes’ estate.
Ronald and the insurance carrier argued that section 2459 of the Code should be applied. Mrs. Grenier argued that her ex-husband’s intention had always been to have her remain as a beneficiary under the policy despite their divorce. She provided good evidence in that regard.
A family friend confirmed that she was present during a discussion about the life insurance policy and that Mr. Forbes had indicated that the insurance belonged to Mrs. Grenier and she could do whatever she wanted with it. Mrs. Grenier also had other corroborating evidence from friends and family members including her son and daughter. Mrs. Grenier had always paid for the premiums on the policy during marriage and even after the divorce she continued to pay for the insurance premiums and helped Mr. Forbes financially. Her son and daughter confirmed this information. While the court found this evidence compelling it did not consider it enough to ignore section 2459 of the Code.
Instead the court looked at section 2446 of the Code, which says that a designation can be made in the policy or by another written instrument which may or may not be in the form of a will. Mr. Forbes did not mention the insurance policy in his will, nor was there anything in the agreement or divorce judgment that addressed their arrangement regarding the insurance policy. On the other hand, Mrs. Grenier contacted the insurance carrier after the divorce to notify them of her change of address and give her new bank account information so that the premiums could continue to be paid. She also forwarded the form to preauthorize the withdrawal of funds from her account to the insurance company. Mr. Forbes didn’t take any issue with the steps she took notifying the carrier and arranging for the premium payments, nor did he indicate he did not want his ex-wife to continue as a beneficiary.
The court concluded that it must take a liberal approach to the relevant provisions of the Code and their application. It was satisfied that the paperwork Mrs. Grenier provided to the carrier and the oral evidence was enough to satisfy the requirements under the Code. The written documents Mrs. Grenier submitted to the carrier were enough to meet the requirements under section 2446 of the Code without the policy owner’s signature. The court ordered that Mrs. Grenier be paid the insurance proceeds plus interest.
This case is important and relevant in Quebec for two reasons. First section 2459 of the Code will not be applied in every case because it is not of public order (i.e. it is not mandatory to apply this section of the Code). It is possible for an owner to decide section 2459 will not apply by providing good or sufficient evidence to show he or she does not want this section to apply. The other important point is that a beneficiary designation does not have to be signed on either the form or another written instrument. It can be written on anything, but it does not have to be signed by the owner.