Scorned Wife Wins Over Girlfriend

Never under-estimate the blinding power of new love or the obligations to a scorned ex-wife. . .even after death. 

Those were the circumstances under which an interesting case recently evolved.   

In Milne Estate v. Milne 2014, BCSC 2112, the deceased had agreed to a Consent Order that obligated him to maintain a life insurance policy with his wife Sheerie as beneficiary for as long as he was required to pay child and spousal support. Shortly after entering into the consensual Order, he changed the beneficiary of the insurance policy to his new girlfriend.

Upon his death, Mr. Milne was still responsible for support payments to Sheerie. The life insurance policy, which was worth about $500,000, would have passed to Sheerie under the terms of the aforementioned Order, but in effect, they passed to the deceased’s new girlfriend, one Ms. Vicente.

Sheerie advanced a couple of arguments in support of her claim for entitlement to the policy. She argued that either a constructive trust had arisen in her favour or alternatively, that the deceased had breached a contractual obligation and that she was entitled to damages from his estate.

The constructive trust is an equitable doctrine. The Court in Milne Estate, stated that while it is possible that separated spouses could owe fiduciary duties to one another, once their respective obligations have been put into contractual terms, those would prevail. The Order was a contractual agreement; therefore, the constructive trust argument did not accord with the facts of this particular case.

The major issue to be decided by the Court then, was whether or not the terms of the Order applied to give Sheerie the entire sum of the insurance policy, or whether she was merely entitled to the amount of the support payments.

After reviewing the terms of the Order, the Court found that the parties objectively intended for the term pertaining to the life insurance policy to be independent from the term regarding support payments and therefore Sheerie was entitled to the amount of the entire policy.

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