Michelle Constance Moore Appellant v. Risa Lorraine Sweet, 2018 SCC 52

SUPREME COURT OF CANADA Citation: Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303 Appeal Heard: February 8, 2018 Judgment Rendered: November 23, 2018 Docket: 37546 Between: Michelle Constance Moore Appellant and Risa Lorraine Sweet Respondent Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ. Reasons for Judgment: (paras. 1 to 96) Joint Dissenting Reasons: (paras. 97 to 144) Côté J. (Wagner C.J. and Abella, Moldaver, Karakatsanis, Brown and Martin JJ. concurring) Gascon and Rowe JJ. Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303 Michelle Constance Moore Appellant v.

Risa Lorraine Sweet Respondent Indexed as: Moore v. Sweet 2018 SCC 52 File No.: 37546. 2018: February 8; 2018: November 23.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ. on appeal from the court of appeal for ontario Equity — Restitution — Unjust enrichment — Remedy — Constructive trust — Husband and wife separating and entering into contractual agreement pursuant to which wife will pay husband’s life insurance policy premiums in order to remain named sole beneficiary of policy — Husband subsequently naming new common law spouse as beneficiary without wife’s knowledge — Insurance proceeds payable to common law spouse on husband’s death despite wife having continued to pay premiums — Whether common law spouse unjustly enriched at wife’s expense — If so, whether constructive trust is appropriate remedy.

Insurance — Life insurance — Beneficiary designation — Wife designated as revocable beneficiary of husband’s life insurance policy — After separation, wife agreeing to continue to pay policy premiums to maintain beneficiary designation — Husband subsequently designating new common law spouse as irrevocable beneficiary without wife’s knowledge — Insurance proceeds payable to common law spouse on husband’s death — Whether designation of common law spouse as irrevocable beneficiary in accordance with statute precludes recovery for wife with prior claim to benefit of policy — Insurance Act, R.S.O. 1990, c.

I.8, ss. 190 , 191 . During L and M’s marriage, L purchased a term life insurance policy and designated M as revocable beneficiary. They later separated, and entered into an oral agreement whereby M would pay all of the policy premiums and, in exchange, L would maintain M’s beneficiary designation. Unbeknownst to M, L subsequently designated his new common law spouse, R, as the irrevocable beneficiary of the policy. When L passed away, the proceeds were therefore payable to R and not to M. At the time of L’s death, his estate had no significant assets.

M, who had paid about $7,000 in policy premiums since separation, commenced an application regarding her entitlement to the $250,000 policy proceeds. The application judge held that R had been unjustly enriched at M’s expense and impressed the proceeds with a constructive trust in M’s favour. The Court of Appeal allowed R’s appeal and set aside the judgment of the application judge. Held (Gascon and Rowe JJ. dissenting): The appeal should be allowed.

Per Wagner C.J. and Abella, Moldaver, Karakatsanis, C ôté, Brown and Martin JJ.: R was enriched, M was correspondingly deprived, and both the enrichment and deprivation occurred in the absence of a juristic reason. Therefore, a remedial constructive trust should be imposed for M’s benefit. A constructive trust is understood primarily as an equitable remedy that may be imposed at a court’s discretion. A proper equitable basis, such as a successful claim in unjust enrichment, must first be found to exist.

A plaintiff will succeed on the cause of action in unjust enrichment if he or she can show three elements: (1) that the defendant was enriched; (2) that the plaintiff suffered a corresponding deprivation; and (3) that the defendant’s enrichment and the plaintiff’s corresponding deprivation occurred in the absence of a juristic reason. Regarding the first element, the parties do not dispute the fact that R was enriched to the full extent of the insurance proceeds in the amount of $250,000, by virtue of her right to receive them as the designated irrevocable beneficiary of L’s policy.

The second element focuses on what the plaintiff actually lost and on whether that loss corresponds to the defendant’s enrichment, such that the latter was enriched at the expense of the former. The measure of deprivation is not limited to the plaintiff’s out-of-pocket expenditures or to the benefit taken directly from him or her. Rather, the concept of loss also captures a benefit that was never in the plaintiff’s possession but that the court finds would have accrued for his or her benefit had it not been received by the defendant instead.

This element does not require that the disputed benefit be conferred directly by the plaintiff on the defendant. In this case, the extent of M’s deprivation is not limited to the $7,000 she paid in premiums. She stands deprived of the right to receive the entirety of the insurance proceeds, a value of $250,000. It is also clear that R’s enrichment came at M’s expense. Not only did M’s payment of the premiums make R’s enrichment possible, but R’s designation gave her the statutory right to receive the insurance proceeds.

Because R received the benefit that otherwise would have accrued to M, the requisite correspondence exists: the former was enriched at the expense of the latter. To establish the third element, it must be demonstrated that both the enrichment and corresponding deprivation occurred without a juristic reason. The juristic reason analysis proceeds in two stages.

The first stage requires the plaintiff to demonstrate that the defendant’s retention of the benefit at the plaintiff’s expense cannot be justified on the basis of any of the established categories of juristic reasons, such as disposition of law or statutory obligations. A plaintiff’s claim will necessarily fail if a legislative enactment justifies the enrichment and corresponding deprivation. In this case, a beneficiary designation made pursuant to ss. 190(1) and 191(1) of the Insurance Act does not provide a juristic reason for R’s enrichment at M’s expense.

Nothing in the Insurance Act can be read as ousting the common law or equitable rights that persons other than the designated beneficiary may have in policy proceeds. The legislature is presumed not to depart from prevailing law without expressing its intention to do so with irresistible clearness.

While the Insurance Act provides the mechanism by which beneficiaries become statutorily entitled to receive policy proceeds, no part of the Act operates with the necessary irresistible clearness to preclude the existence of contractual or equitable rights in those proceeds once they have been paid to the named beneficiary.

Furthermore, the Insurance Act provisions applicable to irrevocable beneficiary designations do not require, either expressly or implicitly, that a beneficiary keep the proceeds as against a plaintiff in an unjust enrichment claim, who stands deprived of his or her prior contractual entitlement to claim such proceeds upon the insured’s death. Accordingly, an irrevocable designation under the Act cannot constitute a juristic reason for R’s enrichment and M’s deprivation. Neither by direct

reference nor by necessary implication does the Insurance Act either foreclose a third party who stands deprived of his or her contractual entitlement to claim insurance proceeds by successfully asserting an unjust enrichment claim against the designated beneficiary — revocable or irrevocable — or preclude the imposition of a constructive trust in circumstances such as these. Therefore, no established category of juristic reason applies. Once the plaintiff has successfully demonstrated that no category of juristic reason applies, a prima facie case is established and the analysis proceeds to the second stage.

At this stage, the defendant must establish some residual reason why the enrichment should be retained. Considerations such as the parties’ reasonable expectations and moral and policy-based arguments come into play. In the present case, it is clear that both parties expected to receive the proceeds of the life insurance policy. However, the residual considerations favour M, given that her contribution towards the payment of the premiums actually kept the policy alive and made R’s entitlement to receive the proceeds upon L’s death possible.

Once each of the three elements of the cause of action in unjust enrichment is made out, the remedy is restitutionary in nature and can take one of two forms: personal or proprietary. A personal remedy is essentially a debt or a monetary obligation and can be viewed as the default remedy for unjust enrichment. In certain cases, however, a plaintiff may be awarded a remedy of a proprietary nature. The most pervasive and important proprietary remedy for unjust enrichment is the constructive trust.

Courts will impress the disputed property with a constructive trust only if the plaintiff can establish that a personal remedy would be inadequate; and that there is a link between his or her contributions and the disputed property. Ordinarily, a personal award would be adequate in cases such as this one where the property at stake is money. In the present case, however, the disputed insurance money has been paid into court and is readily available to be impressed with a constructive trust. Moreover, M’s payment of the premiums was causally connected to the maintenance of the policy under which R was enriched.

A constructive trust to the full extent of the proceeds should therefore be imposed in M’s favour. Per Gascon and Rowe JJ. (dissenting): There is disagreement with the majority that M has established a claim in unjust enrichment on these facts and therefore, that a constructive trust should be imposed. M had a contract with L to be maintained the named beneficiary of his life insurance policy while she paid the premiums.

However, this contract does not create a proprietary or equitable interest in the policy’s proceeds and simply being named as a beneficiary does not give one a right in the proceeds before the death of the insured. The right to claim the proceeds only crystalizes upon the insured’s death. Further, as a revocable beneficiary, M had no right to contest L’s redesignation of R as an irrevocable beneficiary outside of a claim against L for breach of contract. Thus, at the time of L’s death, the only rights that M possessed in relation to the life insurance contract were her contractual rights.

While M would have a claim against L’s estate for breach of contract, the estate’s lack of assets has rendered any such recourse fruitless. Instead, M’s claim is to reverse the purported unjust enrichment of R. In an action for unjust enrichment, a plaintiff must show that their deprivation corresponds to the defendant’s enrichment. The correspondence between the deprivation and the enrichment, while seemingly formalistic, is fundamental.

Correspondence is the connection between the parties — a plus and a minus as obverse manifestations of the same event — that uniquely identifies the plaintiff as the proper person to seek restitution against a particular defendant. In this case, it is clear that but for M’s payments, the policy would have lapsed, and but for L’s breach of contract, M would have been the beneficiary at the time of his death. But these facts are not enough to establish that the deprivation and the enrichment are corresponding. R’s enrichment was not at the expense of M because R’s enrichment is not dependent on M’s deprivation.

What R received (a statutory entitlement to proceeds) is different from M’s deprivation (the inability to enforce her contractual rights) — they are not two sides of the same coin. Even if a corresponding deprivation could be established, M’s claim in unjust enrichment would fail at the first stage of the juristic reason analysis, because the Insurance Act establishes a juristic reason for R’s enrichment. Section 191(1) of the Insurance Act provides that an insured may designate an irrevocable beneficiary under a life insurance policy, and thereby provide special protections to that beneficiary.

From the moment an irrevocable beneficiary is designated, they have a right in the policy itself: the insurance money is not subject to the control of the insured or to the claims of his or her creditors, and the beneficiary must consent to any subsequent changes to beneficiary designation. As it is undisputed that R was the validly designated irrevocable beneficiary of the policy, she is entitled to the proceeds free of the claims of L’s creditors.

The fact that M had an agreement with L for the proceeds of the policy pursuant to which she paid its premiums does not undermine the presence of this juristic reason. As M’s rights are contractual in nature, she is a creditor of L’s estate and thus, by the provisions of the Insurance Act , has no claim to the proceeds. The Insurance Act explicitly protects irrevocable beneficiaries from the claims of the deceased’s creditors and provides that the insurance proceeds do not form part of the insured’s estate. Thus, the Insurance Act precludes the existence of contractual rights in those insurance proceeds.

The Insurance Act ’s legislative history further supports R’s retention of the insurance proceeds notwithstanding M’s claim. The provisions of the Insurance Act were designed to protect the interests of beneficiaries in retaining the proceeds and provide no basis whatsoever for a person paying the premiums to assume she would have any claim to the eventual proceeds. The Insurance Act is deliberately indifferent to the source of the premium payments and renders the actions of the payers irrelevant as far as the beneficiaries are concerned.

In immunizing beneficiaries from the claims of the insured’s creditors, the Insurance Act does not distinguish between types of creditors. Creditors of the insured’s estate simply do not have a claim to the insurance proceeds. There is no basis to carve out a special class of creditor who would be exempt from the clear wording of the Insurance Act . Neither M’s contributions to the policy, nor her contract with L are sufficient to take her outside the comprehensive scheme and grant her special and preferred status.

Even if the Insurance Act did not establish a juristic reason for R’s enrichment, the policy considerations at the second stage of the juristic reason analysis weigh against allowing M’s claim of unjust enrichment. It is an unfortunate reality that a person’s death is sometimes accompanied by litigation that can tie up funds that the deceased intended to support loved ones for a significant period of

time, adding financial hardship to personal tragedy. In an attempt to ensure that life insurance proceeds could be free from such strife, theOntario legislator empowered policy holders to designate an irrevocable beneficiary under s. 191(1) of the Insurance Act. Such adesignation ensures that the proceeds can be disbursed free from claims against the estate, giving certainty to insured, insurer andbeneficiary alike. This provision should be given full effect. Cases Cited By Côté J. Applied: Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629; Kerr v.

Baranow, 2011 SCC 10, [2011] 1S.C.R. 269; Shannon v. Shannon (1985), (ON SC), 50 O.R. (2d) 456; distinguished: Reference re Goods and ServicesTax, (SCC), [1992] 2 S.C.R. 445; Gladstone v. Canada (Attorney General), 2005 SCC 21, [2005] 1 S.C.R. 325;referred to: Soulos v. Korkontzilas, (SCC), [1997] 2 S.C.R. 217; Peter v. Beblow, (SCC), [1993] 1S.C.R. 980; Peel (Regional Municipality) v. Canada, (SCC), [1992] 3 S.C.R. 762; Rathwell v. Rathwell, (SCC), [1978] 2 S.C.R. 436; Murdoch v. Murdoch, (SCC), [1975] 1 S.C.R. 423; Pettkus v. Becker, (SCC), [1980] 2 S.C.R. 834; Pacific National Investments Ltd. v.

Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575; ProfessionalInstitute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660; Kleinwort Benson Ltd. v.Birmingham City Council, [1997] Q.B. 380; Citadel General Assurance Co. v. Lloyds Bank Canada, (SCC), [1997] 3S.C.R. 805; Lac Minerals Ltd. v. International Corona Resources Ltd., (SCC), [1989] 2 S.C.R. 574; Cie ImmobilièreViger Ltée v. Lauréat Giguère Inc., (SCC), [1977] 2 S.C.R. 67; Lacroix v. Valois, (SCC), [1990] 2 S.C.R.1259; Love v. Love, 2013 SKCA 31, 359 D.L.R. (4th) 504; Central Trust Co. v.

Rafuse, (SCC), [1986] 2 S.C.R. 147;Garland v. Consumers’ Gas Co. (2001), (ON CA), 57 O.R. (3d) 127; Saskatchewan Crop Insurance Corp. v. Deck,2008 SKCA 21, 307 Sask. R. 206; Richardson (Estate Trustee of) v. Mew, 2009 ONCA 403, 96 O.R. (3d) 65; Rawluk v. Rawluk, (SCC), [1990] 1 S.C.R. 70; Gendron v. Supply and Services Union of the Public Service Alliance of Canada, Local 50057, (SCC), [1990] 1 S.C.R. 1298; KBA Canada Inc. v. 3S Printers Inc., 2014 BCCA 117, 59 B.C.L.R. (5th) 273; Bank ofMontreal v. Innovation Credit Union, 2010 SCC 47, [2010] 3 S.C.R. 3; Chanowski v. Bauer, 2010 MBCA 96, 258 Man.

R. (2d) 244;Central Guaranty Trust Co. v. Dixdale Mortgage Investment Corp. (1994), (ON CA), 24 O.R. (3d) 506; ZaidanGroup Ltd. v. London (City) (1990), (ON CA), 71 O.R. (2d) 65, aff’d (SCC), [1991] 3 S.C.R. 593;Sorochan v. Sorochan, (SCC), [1986] 2 S.C.R. 38. By Gascon and Rowe JJ. (dissenting) Air Canada v. British Columbia, (SCC), [1989] 1 S.C.R. 1161; Lac Minerals Ltd. v. International CoronaResources Ltd., (SCC), [1989] 2 S.C.R. 574; Love v. Love, 2013 SKCA 31, 359 D.L.R. (4th) 504; Holowa Estate v.Stell-Holowa, 2011 ABQB 23, 330 D.L.R. (4th) 693; Richardson (Estate Trustee of) v.

Mew, 2009 ONCA 403, 96 O.R. (3d) 65; Robertsv. Martindale (1998), (BC CA), 55 B.C.L.R. (3d) 63; Milne Estate v. Milne, 2014 BCSC 2112, 54 R.F.L. (7th) 328;Ladner v. Wolfson, 2011 BCCA 370, 24 B.C.L.R. (5th) 43; Schorlemer Estate v. Schorlemer (2006), 29 E.T.R. (3d) 181; Steeves v.Steeves (1995), (NB KB), 168 N.B.R. (2d) 226; Gregory v. Gregory (1994), (BC SC), 92B.C.L.R. (2d) 133; Shannon v. Shannon (1985), (ON SC), 50 O.R. (2d) 456; Garland v. Consumers’ Gas Co., 2004SCC 25, [2004] 1 S.C.R. 629; Peter v. Beblow, (SCC), [1993] 1 S.C.R. 980; Professional Institute of the Public Serviceof Canada v.

Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660; Cie Immobilière Viger Ltée v. Lauréat Giguère Inc., (SCC), [1977] 2 S.C.R. 67; Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575; Rathwell v.Rathwell, (SCC), [1978] 2 S.C.R. 436; Peel (Regional Municipality) v. Canada, (SCC), [1992] 3 S.C.R.762; Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269; Soulos v. Korkontzilas, (SCC), [1997] 2 S.C.R. 217; Pettkusv. Becker, (SCC), [1980] 2 S.C.R. 834; Chanowski v. Bauer, 2010 MBCA 96, 258 Man. R. (2d) 244; Fraser v.

Fraser(1995), (BC SC), 9 E.T.R. (2d) 136; Ontario Teachers’ Pension Plan Board v. Ontario (Superintendent of FinancialServices) (2004), (ON CA), 70 O.R. (3d) 61; Snider v. Mallon, 2011 ONSC 4522, 3 R.F.L. (7th) 228; Bielny v.Dzwiekowski, [2002] I.L.R. ¶I-4018, aff’d [2002] O.J. No. 508 (QL); Kang v. Kang Estate, 2002 BCCA 696, 44 C.C.L.I. (3d) 52; LadnerEstate, Re, 2004 BCCA 366, 40 B.C.L.R. (4th) 298. Statutes and Regulations Cited Act to secure to Wives and Children the benefit of Assurances on the lives of their Husbands and Parents, S. Prov. C. 1865, 29 Vict.,c. 17, ss. 3, 5.

Act to Secure to Wives and Children the Benefit of Life Insurance, S.O. 1884, c. 20, s. 5. Insurance Act, R.S.O. 1960, c. 190, ss. 164(1), 165. Insurance Act, R.S.O. 1990, c. I.8,

Part V, ss. 171(1) “beneficiary”, 172(1), 190, 191, 195, 196(1), 200. Succession Law Reform Act, R.S.O. 1990, c. S.26, ss. 58, 72(1)(f). Authors Cited Birks, Peter. Unjust Enrichment, 2nd ed. Oxford: Oxford University Press, 2005. Burrows, Andrew. The Law of Restitution, 3rd ed. Oxford: Oxford University Press, 2011. Goff & Jones: The Law of Unjust Enrichment, 9th ed. by Charles Mitchell, Paul Mitchell and Stephen Watterson. London: ThomsonReuters, 2016. Maddaugh, Peter D., and John D. McCamus. The Law of Restitution, loose-leaf ed. Aurora, Ont.: Canada Law Book, 2004 (updatedDecember 2017, release 20).

McInnes, Mitchell. The Canadian Law of Unjust Enrichment and Restitution. Markham, Ont.: LexisNexis Canada, 2014. McVitty, Edmund Hugh. A Commentary on the Life Insurance Laws of Canada. Toronto: Institute of Chartered Life Underwriters ofCanada, 1962 (loose-leaf). Norwood on Life Insurance Law in Canada, 3rd ed. by David Norwood and John P. Weir. Toronto: Carswell, 2002. Smith, Lionel. “Demystifying Juristic Reasons” (2007), 45 Can. Bus. L.J. 281. Smith, Lionel. “Restitution: The Heart of Corrective Justice” (2001), 79 Tex. L. Rev. 2115.

Smith, Lionel D. “Three-Party Restitution: A Critique of Birks’s Theory of Interceptive Subtraction” (1991), 11 Oxford J. Leg. Stud. 481. Virgo, Graham. The Principles of the Law of Restitution, 3rd ed. Oxford: Oxford University Press, 2015. Waters’ Law of Trusts in Canada, 4th ed. by Donovan W. M. Waters, Mark R. Gillen and Lionel D. Smith. Toronto: Carswell, 2012. APPEAL from a judgment of the Ontario Court of Appeal (Strathy C.J. and Blair and Lauwers JJ.A.), 2017 ONCA 182, 134O.R. (3d) 721, 409 D.L.R. (4th) 312, 65 C.C.L.I. (5th) 175, 32 C.C.P.B. (2nd) 254, [2017] O.J.

No. 1129 (QL), 2017 CarswellOnt 2958(WL Can.), setting aside a decision of Wilton-Siegel J., 2015 ONSC 3914, [2015] O.J. No. 7761 (QL), 2015 CarswellOnt 20995 (WLCan.). Appeal allowed, Gascon and Rowe JJ. dissenting. Ian M. Hull, Suzana Popovic-Montag and David M. Smith, for the appellant. Jeremy Opolsky and Jonathan Silver, for the respondent. The judgment of Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown and Martin JJ. was delivered by Côté J. — I.

Overview [1] This appeal involves a contest between two innocent parties, both of whom claim an entitlement to the proceeds ofa life insurance policy. [2] The appellant, Michelle Constance Moore (“Michelle”), and the owner of the policy, Lawrence Anthony Moore(“Lawrence”), were former spouses. They entered into a contractual agreement pursuant to which Michelle would pay all of the policy’spremiums and, in exchange, Lawrence would maintain Michelle as the sole beneficiary thereunder — and she would therefore be entitledto receive the proceeds of the policy upon Lawrence’s death.

While Michelle held up her end of the bargain, Lawrence did not. Shortlyafter assuming his contractual obligation, and unbeknownst to Michelle, Lawrence designated his new common law spouse — therespondent, Risa Lorraine Sweet (“Risa”) — as the irrevocable beneficiary of the policy. When Lawrence passed away several yearslater, the proceeds were payable to Risa and not to Michelle. [3] Should these proceeds be impressed with a constructive trust in Michelle’s favour? A majority of the Ontario Courtof Appeal found that they should not.

I disagree; in my view, Risa was enriched, Michelle was correspondingly deprived, and both theenrichment and the deprivation occurred in the absence of a juristic reason. In these circumstances, a remedial constructive trust shouldbe imposed for Michelle’s benefit. I would therefore allow the appeal. II. Context [4] Michelle and Lawrence were married in 1979. Together, they had three children. In October 1985, Lawrencepurchased a term life insurance policy from Canadian General Life Insurance Company, the predecessor of RBC Life InsuranceCompany (“Insurance Company”).

He purchased this policy, with a coverage amount of $250,000, and initially designated Michelle asthe beneficiary — but not as an irrevocable beneficiary. The annual premium of $507.50 was paid out of the couple’s joint bank accountuntil 2000. [5] In December 1999, Michelle and Lawrence separated. Shortly thereafter, they entered into an oral agreement (“OralAgreement”) whereby Michelle “would pay the premiums and be entitled to the proceeds of the Policy on [Lawrence’s] death” (SuperiorCourt decision, 2015 ONSC 3914, at para. 13 ).

The effect of this agreement was therefore to require that Michelle remaindesignated as the sole beneficiary of Lawrence’s life insurance policy. [6] In the summer of 2000, Lawrence began cohabiting with Risa. They remained common law spouses and lived inRisa’s apartment until Lawrence’s death 13 years later. [7] On September 21, 2000, Lawrence executed a change of beneficiary form designating Risa as the irrevocablebeneficiary of the policy.

Risa testified that Lawrence did so because he did not want her to worry about how she would pay the rent orbuy medication, and wanted to make sure that she would be able to continue living in the building where she had resided for thepreceding 40 years. [8] The change in beneficiary designation was made through, and after consultation with, Lawrence’s insurance broker,who also happened to be Michelle’s brother-in-law. The new designation was recorded by the Insurance Company onSeptember 25, 2000.

Although Lawrence did not change the beneficiary designation surreptitiously, he did not advise Michelle that she was no longer named as beneficiary.[1]

[ 9 ] Michelle and Lawrence entered into a formal separation agreement in May 2002. This agreement dealt with a number of issues as between them, but was silent as to the policy and anything related to it. They finalized their divorce on October 3, 2003. [ 10 ] Pursuant to her obligation under the Oral Agreement, and without knowing that Lawrence had named Risa as the irrevocable beneficiary, Michelle continued to pay all of the premiums on the policy until Lawrence’s death.

By then, a total of $30,535.64 had been paid on account of premiums; about $7,000 had been paid since 2000. [ 11 ] Lawrence died on June 20, 2013. His estate had no significant assets. [ 12 ] Michelle was advised by the Insurance Company that she was not the designated beneficiary of the policy on July 5, 2013, around two weeks after Lawrence’s death. On February 12, 2014, Michelle commenced an application seeking the opinion, advice and direction of the Ontario Superior Court of Justice as to her entitlement to the proceeds of the policy.

Pursuant to a court order dated December 19, 2013, the Insurance Company paid the proceeds of the policy into court pending the resolution of the dispute. [ 13 ]

Part V of the Insurance Act , R.S.O. 1990, c. I.8, sets out a comprehensive scheme that governs the rights and obligations of parties to a life insurance policy. It applies to all life insurance contracts “[d]espite any agreement, condition or stipulation to the contrary” (s. 172(1)), which means that the parties cannot contract out of its provisions. [ 14 ] Of particular relevance for the purposes of this appeal are the provisions of the Insurance Act that deal with the designation of beneficiaries.

A “beneficiary” of a life insurance policy is defined as “a person, other than the insured or the insured’s personal representative, to whom or for whose benefit insurance money is made payable in a contract or by a declaration” (s. 171(1)). A beneficiary designation therefore identifies the intended recipient of the proceeds under the life insurance policy upon the death of the insured person, in accordance with the terms of the policy. [ 15 ]

Part V of the Insurance Act recognizes two types of beneficiary designations: those that are revocable and those that are irrevocable . A revocable beneficiary designation is one that can be altered or revoked by the insured without the beneficiary’s knowledge or consent (s. 190(1) and (2)). An irrevocable beneficiary designation, by contrast, can be altered or revoked only if the designated beneficiary consents (s. 191(1)).

When a valid irrevocable beneficiary designation is made, s. 191 of the Insurance Act makes clear that the insurance money ceases to be subject to the control of the insured, is not subject to the claims of the insured’s creditors and does not form part of the insured’s estate. [ 16 ] It is clear that the interest of an irrevocable beneficiary is afforded much more protection than that of a revocable beneficiary; the former has a “statutory right to remain as the named beneficiary entitled to receive the insurance moneys unless he or she consents to being removed” (Court of Appeal decision, 2017 ONCA 182 , 134 O.R. (3d) 721, at para. 82 ).

The legislation contemplates only one situation where insurance money can be clawed back from a beneficiary, regardless of whether his or her designation is irrevocable: to satisfy a support claim brought by a dependant against the estate of the now-deceased insured person ( Succession Law Reform Act , R.S.O. 1990, c. S.26, ss. 58 and 72(1) (f)). No such claim has been brought in this case. [ 17 ]

Part V of the Insurance Act also deals with the assignment of a life insurance policy. A life insurance contract entails a promise by the insurer “to pay the contractual benefit when the insured event occurs” ( Norwood on Life Insurance Law in Canada (3rd ed. 2002), by D. Norwood and J. P. Weir, at p. 359). It can therefore be understood as creating a chose in action against the insurer, which is transferrable from one person to another through the mechanism of an assignment. The statute provides that where the assignee gives written notice of the assignment to the insurer, he or she assumes all of the assignor’s rights and interests in the policy. Pursuant to s. 200(1) (

b) of the Insurance Act , however, an assignee’s interest in the policy will not have priority over that of an irrevocable beneficiary who was designated prior to the time the assignee gave notice to the insurer — unless the irrevocable beneficiary consents to the assignment and surrenders his or her interest in the policy. [ 18 ] The relevant provisions of the Insurance Act read as follows: 190

(1) Subject to subsection (4), [2] an insured may in a contract or by a declaration designate the insured, the insured’s personal representative or a beneficiary as one to whom or for whose benefit insurance money is to be payable.

(2) Subject to

section 191 , the insured may from time to time alter or revoke the designation by a declaration. . . . 191

(1) An insured may in a contract, or by a declaration other than a declaration that is part of a will, filed with the insurer at its head or principal office in Canada during the lifetime of the person whose life is insured, designate a beneficiary irrevocably, and in that event the insured, while the beneficiary is living, may not alter or revoke the designation without the consent of the beneficiary and the insurance money is not subject to the control of the insured, is not subject to the claims of the insured’s creditor and does not form part of the insured’s estate.

(2) Where the insured purports to designate a beneficiary irrevocably in a will or in a declaration that is not filed as provided in subsection (1), the designation has the same effect as if the insured had not purported to make it irrevocable. 200

(1) Where an assignee of a contract gives notice in writing of the assignment to the insurer at its head or principal office in Canada, the assignee has priority of interest as against, (

a) any assignee other than one who gave notice earlier in like manner; and

(

b) a beneficiary other than one designated irrevocably as provided in

section 191 prior to the time the assignee gave notice to theinsurer of the assignment in the manner prescribed in this subsection.

(2) Where a contract is assigned as security, the rights of a beneficiary under the contract are affected only to the extent necessary togive effect to the rights and interests of the assignee.

(3) Where a contract is assigned unconditionally and otherwise than as security, the assignee has all the rights and interests given to theinsured by the contract and by this Part and shall be deemed to be the insured. . . . III. Decisions Below A. Ontario Superior Court of Justice (Wilton-Siegel J.) — 2015 ONSC 3914 [19] The application judge, Wilton-Siegel J., held that Risa had been unjustly enriched at Michelle’s expense, andtherefore impressed the proceeds of the policy with a constructive trust in Michelle’s favour.

He began his reasons by addressing apreliminary matter: the Oral Agreement that Lawrence and Michelle had entered into during their separation. He held that Michelle andLawrence “each had an equitable interest in the proceeds of the Policy from the time that it was taken out” and that the Oral Agreementhad effectively resulted in the “equitable assignment to [Michelle] of [Lawrence’s] equitable interest in the proceeds in return for[Michelle’s] agreement to pay the premiums on the Policy” (para. 17) .

According to the application judge, this equitableinterest “took the form of a right to determine the beneficiary of the Policy” (para. 18). [20] The application judge then turned to Michelle’s unjust enrichment claim.

He found that the first two elements of thecause of action in unjust enrichment — an enrichment of the defendant and a corresponding deprivation suffered by the plaintiff — wereeasily met in this case: Risa had been enriched by virtue of her valid designation as irrevocable beneficiary, and Michelle had suffered acorresponding deprivation to the extent that she paid the premiums and to the extent that the proceeds had been payable to Risa“notwithstanding the prior equitable assignment of such proceeds to her” (para. 27).

With respect to the third and final element — theabsence of a juristic reason for the enrichment — the application judge held that Risa’s designation as beneficiary under the policy didnot constitute a juristic reason that entitled her to retain the proceeds in the particular circumstances of this case (para. 46). This wasbecause Risa’s entitlement to the proceeds would not have been possible if Michelle had not performed her obligations under the OralAgreement, and because the Oral Agreement itself amounted to an equitable assignment of the proceeds to Michelle (para. 48). B.

Ontario Court of Appeal (Strathy C.J.O. and Blair J.A., Lauwers J.A. dissenting) — 2017 ONCA 182, 134 O.R. (3d) 721 [21] The Ontario Court of Appeal allowed Risa’s appeal and set aside the judgment of the application judge. It orderedthat the $7,000 Michelle had paid in premiums between 2000 and 2013 be paid out of court to her and that the balance of the insuranceproceeds be paid to Risa.

(1) Majority Reasons [22] Writing for himself and for Strathy C.J.O., Blair J.A. held that it was not open to the application judge to find thatthe Oral Agreement amounted to an equitable assignment, since the doctrine of equitable assignment had not been placed in issue by theparties before him. [23] Turning to Michelle’s unjust enrichment claim, Blair J.A. accepted the application judge’s finding that Risa wasenriched.

He found it unnecessary to resolve the issue of whether the corresponding deprivation element had been made out as he foundthere was a juristic reason justifying the receipt by Risa of the proceeds. Specifically, Blair J.A. held that the application judge had erredin his approach to the juristic reason element of the unjust enrichment framework — first, by failing to recognize the significance ofRisa’s designation as an irrevocable beneficiary, and second, by failing to apply the two-stage analysis mandated by this Court inGarland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629.

In Blair J.A.’s view, “the existence of the statutory regime relatingto revocable and irrevocable beneficiaries . . . falls into an existing recognized category of juristic reason”, constituting “both adisposition of law and a statutory obligation” (para. 99). [24] Blair J.A. declined to decide whether a constructive trust can be imposed only to remedy unjust enrichment andwrongful acts or can also be based on the more elastic concept of “good conscience”.

He took the position that there was nothing in thecircumstances of this case that put it in some “good conscience” category beyond what was captured by unjust enrichment and wrongfulact.

(2) Dissenting Reasons [25] In dissent, Lauwers J.A. agreed with the majority that the application judge had erred in relying on the equitableassignment doctrine. However, he disagreed with the majority as to the disposition of Michelle’s unjust enrichment claim and thepropriety of imposing a constructive trust over the proceeds in these circumstances. He would therefore have dismissed the appeal. [26] Lauwers J.A. began by considering this Court’s decision in Soulos v.

Korkontzilas, (SCC), [1997]2 S.C.R. 217, and held that it leaves open four routes by which a constructive trust may be imposed: (1) as a remedy for unjustenrichment; (2) for wrongful acts; (3) in circumstances where its availability has long been recognized; and (4) otherwise where goodconscience requires it. According to Lauwers J.A., in relation to the fourth route, the Soulos court anticipated that the law of remedialtrusts would continue to develop in a way that accommodates the changing needs and mores of society.

[27] On the issue of unjust enrichment, Lauwers J.A. concluded that Michelle had made out each of the requisiteelements and that a constructive trust ought therefore to be imposed over the proceeds in her favour.

With respect to the correspondingdeprivation element, he rejected the submission that Michelle’s financial contribution was the correct measure of her deprivation, andinstead found that the asset for which she had paid and of which she stood deprived was the full payout of the life insuranceproceeds — not just the amount she had paid in premiums. [28] Lauwers J.A. also rejected the proposition that the applicable Insurance Act provisions provided a juristic reason forRisa’s retention of the proceeds.

In his view, Michelle’s entitlement to the insurance proceeds as against Risa was neither precluded noraffected by the operation of the Insurance Act. He also held that a juristic reason could not be found based on the parties’ reasonableexpectations or public policy considerations. [29] Finally, regarding to the imposition of a constructive trust, Lauwers J.A. considered a number of other cases thatinvolved disappointed beneficiaries.

Noting that these cases fit awkwardly under the unjust enrichment rubric, he observed that: . . . the disappointed beneficiary cases are perhaps better understood as a genus of cases in which a constructive trust can be imposed viathe third route in Soulos — circumstances where the availability of a trust has previously been recognized — and the fourthroute — where good conscience otherwise demands it, quite independent of unjust enrichment. [para. 276] IV. Issues [30] The issues in this case are as follows: A. Has Michelle made out a claim in unjust enrichment by establishing:

(1) Risa’s enrichment and her own corresponding deprivation; and (2) the absence of any juristic reason for Risa’s enrichment at her expense? B. If so, is a constructive trust the appropriate remedy? V. Analysis [31] In the present case, Michelle requests that the insurance proceeds be impressed with a constructive trust in herfavour. The primary basis on which she seeks this remedy is unjust enrichment.

In the alternative, she submits that the circumstances ofher case provide a separate good conscience basis upon which a court may impose a constructive trust. [32] A constructive trust is a vehicle of equity through which one person is required by operation of law — regardless ofany intention — to hold certain property for the benefit of another (Waters’ Law of Trusts in Canada (4th ed. 2012), by D. W. M. Waters,M. R. Gillen and L. D. Smith, at p. 478). In Canada, it is understood primarily as a remedy, which may be imposed at a court’s discretionwhere good conscience so requires.

As McLachlin J. (as she then was) noted in Soulos: . . . under the broad umbrella of good conscience, constructive trusts are recognized both for wrongful acts like fraud and breach of dutyof loyalty, as well as to remedy unjust enrichment and corresponding deprivation. . . .

Within these two broad categories, there is roomfor the law of constructive trust to develop and for greater precision to be attained, as time and experience may dictate. [Emphasis added;para. 43.] [33] What is therefore crucial to recognize is that a proper equitable basis must exist before the courts will impress certainproperty with a remedial constructive trust. The cause of action in unjust enrichment may provide one such basis, so long as the plaintiffcan also establish that a monetary award is insufficient and that there is a link between his or her contributions and the disputed property(Peter v.

Beblow, (SCC), [1993] 1 S.C.R. 980, at p. 997; Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, atparas. 50-51). Absent this, a plaintiff seeking the imposition of a remedial constructive trust must point to some other basis on which this remedy can be imposed, like breach of fiduciary duty.[3] [34] I now turn to consider Michelle’s claim in unjust enrichment. A. Unjust Enrichment [35] Broadly speaking, the doctrine of unjust enrichment applies when a defendant receives a benefit from a plaintiff incircumstances where it would be “against all conscience” for him or her to retain that benefit.

Where this is found to be the case, thedefendant will be obliged to restore that benefit to the plaintiff.

As recognized by McLachlin J. in Peel (Regional Municipality) v.Canada, (SCC), [1992] 3 S.C.R. 762, at p. 788, “At the heart of the doctrine of unjust enrichment . . . lies the notion ofrestoration of a benefit which justice does not permit one to retain.” [36] Historically, restitution was available to plaintiffs whose cases fit into certain recognized “categories ofrecovery” — including where a plaintiff conferred a benefit on a defendant by mistake, under compulsion, out of necessity, as a result ofa failed or ineffective transaction, or at the defendant’s request (Peel, at p. 789; Kerr, at para. 31).

Although these discrete categoriesexist independently of one another, they are each premised on the existence of some injustice in permitting the defendant to retain thebenefit that he or she received at the plaintiff’s expense. [37] In the latter half of the 20th century, courts began to recognize the common principles underlying these discretecategories and, on this basis, developed “a framework that can explain all obligations arising from unjust enrichment” (L. Smith,“Demystifying Juristic Reasons” (2007), 45 Can. Bus. L.J. 281, at p. 281; see also Rathwell v.

Rathwell, (SCC), [1978] 2S.C.R. 436, and Murdoch v. Murdoch, (SCC), [1975] 1 S.C.R. 423, per Laskin J., dissenting). Under this principledframework, a plaintiff will succeed on the cause of action in unjust enrichment if he or she can show: (

a) that the defendant was enriched;

(

b) that the plaintiff suffered a corresponding deprivation; and (

c) that the defendant’s enrichment and the plaintiff’s correspondingdeprivation occurred in the absence of a juristic reason (Pettkus v. Becker, (SCC), [1980] 2 S.C.R. 834, at p. 848;Garland, at para. 30; Kerr, at paras. 30-45). While the principled unjust enrichment framework and the categories coexist (Kerr, atparas. 31-32), the parties in this case made submissions only under the principled unjust enrichment framework.

These reasons proceedon this basis. [38] This principled approach to unjust enrichment is a flexible one that allows courts to identify circumstances wherejustice and fairness require one party to restore a benefit to another. Recovery is therefore not restricted to cases that fit within thecategories under which the retention of a conferred benefit was traditionally considered unjust (Kerr, at para. 32).

As observed byMcLachlin J. in Peel (at p. 788): The tri-partite principle of general application which this Court has recognized as the basis of the cause of action for unjust enrichment isthus seen to have grown out of the traditional categories of recovery. It is informed by them.

It is capable, however, of going beyondthem, allowing the law to develop in a flexible way as required to meet changing perceptions of justice. [39] Justice and fairness are at the core of the dispute between Michelle and Risa, both of whom are innocent parties.Moreover, and to complicate matters, resolution of this dispute requires this Court to consider the elements of an unjust enrichment claimas they apply in a context that involves several parties.

Pursuant to her Oral Agreement with Lawrence, Michelle paid around $7,000 inpremiums to the Insurance Company between 2000 and 2013 in exchange for the right to remain named as beneficiary of the policy.When Lawrence passed away, however, the insurance proceeds (which totalled $250,000) were payable by the Insurance Company notto Michelle, but to Risa — the person whom Lawrence had subsequently named the irrevocable beneficiary, contrary to the contractualobligation he owed to Michelle. The result of this arrangement was that Risa’s enrichment was significantly greater than Michelle’s out-of-pocket loss.

Moreover, Risa was entitled to receive the proceeds from the Insurance Company by virtue of her designation asirrevocable beneficiary, pursuant to ss. 190 and 191 of the Insurance Act. [40] These unusual circumstances raise two distinct questions respecting the law of unjust enrichment. First, what is theproper measure of Michelle’s deprivation, and in what sense does it “correspond” to Risa’s gain? Second, does the legislative frameworkat issue provide a juristic reason for Risa’s enrichment and Michelle’s corresponding deprivation — and if not, can such a juristic reasonbe found on some other basis?

I will deal with each of these questions in turn.

(1) Risa’s Enrichment and Michelle’s Corresponding Deprivation [41] The first two elements of the cause of action in unjust enrichment require an enrichment of the defendant and acorresponding deprivation of the plaintiff. These two elements are closely related; a straightforward economic approach is taken to bothof them, with moral and policy considerations instead coming into play at the juristic reason stage of the analysis (Kerr, at para. 37;Garland, at para. 31).

To establish that the defendant was enriched and the plaintiff correspondingly deprived, it must be shown thatsomething of value — a “tangible benefit” — passed from the latter to the former (Kerr, at para. 38; Garland, at para. 31; Peel, at p. 790;Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575, at para. 15). This Court has described theenrichment and detriment elements as being “the same thing from different perspectives” (Professional Institute of the Public Service ofCanada v.

Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660 (“PIPSC”), at para. 151) and thus as being “essentially twosides of the same coin” (Peter, at p. 1012). [42] The parties in the present case do not dispute the fact that Risa was enriched to the full extent of the $250,000 byvirtue of her right to receive the insurance proceeds as the designated irrevocable beneficiary.

The application judge found as much (atpara. 27), and this finding is not contested on appeal. [43] In addition to an enrichment of the defendant, a plaintiff asserting an unjust enrichment claim must also establishthat he or she suffered a corresponding deprivation. According to Professor McInnes, this element serves the purpose of identifying theplaintiff as the person with standing to seek restitution against an unjustly enriched defendant (M. McInnes, The Canadian Law of UnjustEnrichment and Restitution (2014), at p. 149; see also Peel, at pp. 789-90, and Kleinwort Benson Ltd. v.

Birmingham City Council,[1997] Q.B. 380 (C.A.), at pp. 393 and 400). Even if a defendant’s retention of a benefit can be said to be unjust, a plaintiff has no rightto recover against that defendant if he or she suffered no loss at all, or suffered a loss wholly unrelated to the defendant’s gain. Instead,the plaintiff must demonstrate that the loss he or she incurred corresponds to the defendant’s gain, in the sense that there is some causalconnection between the two (Pettkus, at p. 852).

Put simply, the transaction that enriched the defendant must also have caused theplaintiff’s impoverishment, such that the defendant can be said to have been enriched at the plaintiff’s expense (P. D. Maddaugh and J.D. McCamus, The Law of Restitution (loose-leaf ed.), at p. 3-24). While the nature of the correspondence between such gain and lossmay vary from case to case, this correspondence is what grounds the plaintiff’s entitlement to restitution as against an unjustly enricheddefendant.

Professor McInnes explains that “the Canadian conception of a ‘corresponding deprivation’ rightly emphasizes the crucialconnection between the defendant’s gain and the plaintiff’s loss” (The Canadian Law of Unjust Enrichment and Restitution, at p. 149). [44] The authorities on this point make clear that the measure of the plaintiff’s deprivation is not limited to the plaintiff’sout-of-pocket expenditures or to the benefit taken directly from him or her.

Rather, the concept of “loss” also captures a benefit that wasnever in the plaintiff’s possession but that the court finds would have accrued for his or her benefit had it not been received by thedefendant instead (Citadel General Assurance Co. v. Lloyds Bank Canada, (SCC), [1997] 3 S.C.R. 805, at para. 30).This makes sense because in either case, the result is the same: the defendant becomes richer in circumstances where the plaintiffbecomes poorer. As was succinctly articulated by La Forest J. in Lac Minerals Ltd. v.

International Corona Resources Ltd., (SCC), [1989] 2 S.C.R. 574, at pp. 669-70: When one talks of restitution, one normally talks of giving back to someone something that has been taken from them (a restitutionaryproprietary award), or its equivalent value (a personal restitutionary award). As the Court of Appeal noted in this case, [the respondent]never in fact owned the [disputed] property, and so it cannot be “given back” to them. However, there are concurrent findings below thatbut for its interception by [the appellant], [the respondent] would have acquired the property.

In Air Canada . . . , at pp. 1202-03, I saidthat the function of the law of restitution “is to ensure that where a plaintiff has been deprived of wealth that is either in his possession or

would have accrued for his benefit, it is restored to him.

The measure of restitutionary recovery is the gain the [defendant] made at the[plaintiff’s] expense.” (Emphasis added.) In my view the fact that [the respondent in this case] never owned the property should notpreclude it from the pursuing a restitutionary claim: see Birks, An Introduction to the Law of Restitution, at pp. 133-39. [The appellant]has therefore been enriched at the expense of [the respondent]. [Emphasis in original.] While Lac Minerals turned largely on the defendant’s breach of confidence and breach of fiduciary duty, the above comments weremade in the context of La Forest J.’s analysis of the tripartite unjust enrichment framework as it was applied in that case.

My view is thusthat these comments are applicable to the analysis in the present case. [45] The foregoing also indicates that the corresponding deprivation element does not require that the disputed benefit beconferred directly by the plaintiff on the defendant (see McInnes, The Canadian Law of Unjust Enrichment and Restitution, at p. 155,but also see pp. 156-83; Maddaugh and McCamus, The Law of Restitution, at p. 35-1).

This understanding of the correspondence betweenloss and gain has also been accepted under Quebec’s civilian approach to the law of unjust enrichment: The theory of unjustified enrichment does not require that the enrichment pass directly from the property of the impoverished to that ofthe enriched party . . . . The impoverished party looks to the one who profited from its impoverishment. It is then for the enriched partyto find a legal justification for its enrichment. (Cie Immobilière Viger Ltée v. Lauréat Giguère Inc., (SCC), [1977] 2 S.C.R. 67, at p. 79; see also Lacroix v.

Valois, (SCC), [1990] 2 S.C.R. 1259, at pp. 1278-79.) [46] Taking a straightforward economic approach to the enrichment and corresponding deprivation elements of the unjustenrichment framework, I am of the view that Michelle stands deprived of the right to receive the entirety of the policy proceeds (for avalue of $250,000) and that the necessary correspondence exists between this deprivation and Risa’s gain.

With respect to the extent ofMichelle’s deprivation, my view is that the quantification of her loss should not be limited to her out-of-pocket expenditures — that is,the $7,000 she paid in premiums between 2000 and 2013. Pursuant to her contractual obligation, she made those payments over thecourse of 13 years in exchange for the right to receive the policy proceeds from the Insurance Company upon Lawrence’s death. Inbreach of his contractual obligation, however, Lawrence instead transferred that right to Risa.

Had Lawrence held up his end of thebargain with Michelle, rather than designating Risa irrevocably, the right to payment of the policy proceeds would have accrued toMichelle. At the end of the day, therefore, what Michelle lost is not only the amount she paid in premiums. She stands deprived of thevery thing for which she paid — that is, the right to claim the $250,000 in proceeds. [47] To be clear, therefore, Michelle’s entitlement under the Oral Agreement is what makes it such that she was deprivedof the full value of the insurance payout.

In other cases where the plaintiff has some general belief that the insured ought to have namedhim or her as the designated beneficiary, but otherwise has no legal or equitable right to be treated as the proper recipient of the insurancemoney, it will likely be impossible to find either that the right to receive that insurance money was ever held by the plaintiff or that itwould have accrued to him or her.

In such cases, the properly designated beneficiary is not enriched at the expense of a plaintiff who hadno claim to the insurance money in the first place — the result being that the plaintiff will not have suffered a corresponding deprivationto the full extent of the insurance proceeds (Love v. Love, 2013 SKCA 31, 359 D.L.R. (4th) 504, at para. 42). [48] My colleagues, Gascon and Rowe JJ., approach Michelle’s loss differently.

They take the position that unjustenrichment cannot be invoked by a claimant to protect his or her “contractual expectations against innocent third parties” (para. 104).While they agree that the Canadian principle against unjust enrichment operates where a plaintiff has lost wealth that was either in his orher possession or that would have accrued for his or her benefit, they take the position that “awards for expected property have generallybeen where there was a breach of an equitable duty”, and they distinguish that situation from cases where the plaintiff held “a validcontractual expectation” of receiving certain property (para. 104). [49] My view is that it is not useful, in the context of unjust enrichment, to distinguish between expectations based on acontractual obligation and expectations where there was a breach of an equitable duty (see my colleagues’ reasons, at para. 104).

Rather,a robust approach to the corresponding deprivation element focuses simply on what the plaintiff actually lost — that is, property thatwas in his or her possession or that would have accrued for his or her benefit — and on whether that loss corresponds to the defendant’senrichment, such that we can say that the latter was enriched at the expense of the former.

As was observed by Professors Maddaugh andMcCamus in The Law of Restitution, one source of difficulty in these kinds of disappointed beneficiary cases is a rigid application of the “corresponding deprivation” or “expense” element as if it requires that the benefit in the defendant’s handsmust have been transferred from, or constitute an out-of-pocket expense of, the plaintiff. . . . [R]estitution of benefits received from thirdparties may well provide a basis for recovery.

In this particular context, the benefit received can, in any event, normally be described ashaving been received at the plaintiff’s expense in the sense that, but for the mistaken failure to implement the arrangements in question,the benefit would have been received by the plaintiff. [Emphasis added; p. 35-21.] I agree.

In this case, given the fact that Michelle held up her end of the bargain, kept the policy alive by paying the premiums, did notpredecease Lawrence, and still did not get what she actually contracted for, it seems artificial to suggest that her loss was anything lessthan the right to receive the entirety of the insurance proceeds. [50] From this perspective, it is equally clear that Risa’s enrichment came at Michelle’s expense.

It is not only thatMichelle’s payment of the premiums made Risa’s enrichment possible — something which the application judge found to be the case:“The change of designation, and [Risa’s] later receipt of the proceeds of the Policy, would not have been possible but for [Michelle’s]performance of her obligations under the agreement” (para. 48).

What is more significant is that Risa’s designation gave her the statutoryright to receive the insurance proceeds, the necessary implication being that Michelle would have no such right despite the fact that shehad a contractual entitlement, by virtue of the agreement with Lawrence, to remain named as beneficiary. Because Risa received thebenefit that otherwise would have accrued to Michelle, the requisite correspondence exists: the former was enriched at the expense of thelatter.

[51] My colleagues also dispute this proposition. They say that any deprivation suffered by Michelle is attributable to thefact that she lacks the practical ability to recover anything against Lawrence’s insolvent estate. The result, in their view, is that what Risareceived — a statutory entitlement to the proceeds — is different than what Michelle lost — which they characterize as the ability toenforce her contractual rights against Lawrence’s estate (para. 111).

Again, I disagree; since Risa was given the very thing that Michellehad contracted to receive and was otherwise entitled to receive (given that she held up her end of the bargain), it seems evident to me thatRisa was enriched at Michelle’s expense. To be clear, it is not simply that Risa gained a benefit with a value equal to the amount ofMichelle’s deprivation. Rather, what Risa gained is the precise benefit that Michelle lost: the right to receive the proceeds of Lawrence’slife insurance policy.

I would also add that the insolvency of Lawrence’s estate simply means that Michelle would be unable to recoverthe value of her loss by bringing an action against Lawrence’s estate in breach of contract; it does not affect her ability to bring an unjustenrichment claim against Risa. The fact that a plaintiff has a contractual claim against one defendant does not preclude the plaintiff fromadvancing his or her case by asserting a separate cause of action against another defendant if it appears most advantageous (Central TrustCo. v.

Rafuse, (SCC), [1986] 2 S.C.R. 147, at p. 206). [52] I would therefore conclude that the requisite enrichment and corresponding deprivation are both present in this case.The payability of the insurance proceeds by the Insurance Company for Risa’s benefit did in fact impoverish Michelle “to the full extentof the insurance payout in [Risa’s] favour” (Court of Appeal decision, at para. 208 (Lauwers J.A., dissenting)). [53] In light of this, the Court of Appeal’s order — which was made on the consent of the parties, and which requires that$7,000 of the proceeds be paid to Michelle and that the balance be paid to Risa — cannot be upheld on a principled basis.

If there is ajuristic reason for Risa’s retention of the insurance money, then Michelle’s claim will necessarily fail and Risa will be entitled to the full$250,000. If there is no such juristic reason, however, then Michelle’s unjust enrichment claim will succeed and she will be entitled to arestitutionary remedy totalling that amount.

(2) Absence of Any Juristic Reason [54] Having established an enrichment and a corresponding deprivation, Michelle must still show that there is nojustification in law or equity for the fact that Risa was enriched at her expense in order to succeed in her claim. As observed byCromwell J. in Kerr (at para. 40): The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without a juristicreason.

To put it simply, this means that there is no reason in law or justice for the defendant’s retention of the benefit conferred by theplaintiff, making its retention “unjust” in the circumstances of the case . . . . [Emphasis added.] [55] This understanding of juristic reason is crucial for the purposes of the present appeal.

The third element of the causeof action in unjust enrichment is essentially concerned with the justification for the defendant’s retention of the benefit conferred on himor her at the plaintiff’s expense — or, to put it differently, with whether there is a juristic reason for the transaction that resulted in boththe defendant’s enrichment and the plaintiff’s corresponding deprivation. If there is, then the defendant will be justified in keeping orretaining the benefit received at the plaintiff’s expense, and the plaintiff’s claim will fail accordingly.

At its core, the doctrine of unjustenrichment is fundamentally concerned with reversing transfers of benefits that occur without any legal or equitable basis.

As McLachlinJ. stated in Peter (at p. 990), “It is at this stage that the court must consider whether the enrichment and detriment, morally neutral inthemselves, are ‘unjust’.” [56] In Garland, this Court shed light on exactly what must be shown under the juristic reason element of the unjustenrichment analysis — and in particular, on whether this third element requires that cases be decided by “finding a ‘juristic reason’ for adefendant’s enrichment” or instead by “asking whether the plaintiff has a positive reason for demanding restitution” (para. 41, citingGarland v.

Consumers’ Gas Co. (2001), (ON CA), 57 O.R. (3d) 127 (C.A.), at para. 105). In an effort to eliminate theuncertainty between these competing approaches, Iacobucci J. formulated a juristic reason analysis that proceeds in two stages. [57] The first stage requires the plaintiff to demonstrate that the defendant’s retention of the benefit at the plaintiff’sexpense cannot be justified on the basis of any of the “established” categories of juristic reasons: a contract, a disposition of law, adonative intent, and other valid common law, equitable or statutory obligations (Garland, at para. 44; Kerr, at para. 41).

If any of thesecategories applies, the analysis ends; the plaintiff’s claim must fail because the defendant will be justified in retaining the disputedbenefit. For example, a plaintiff will be denied recovery in circumstances where he or she conferred a benefit on a defendant by way ofgift, since there is nothing unjust about a defendant retaining a gift of money that was made to him or her by (and that resulted in thecorresponding deprivation of) the plaintiff.

In this way, these established categories limit the subjectivity and discretion inherent in theunjust enrichment analysis and help to delineate the boundaries of this cause of action (Garland, at para. 43). [58] If the plaintiff successfully demonstrates that none of the established categories of juristic reasons applies, then he orshe has established a prima facie case and the analysis proceeds to the second stage. At this stage, the defendant has an opportunity torebut the plaintiff’s prima facie case by showing that there is some residual reason to deny recovery (Garland, at para. 45).

The de factoburden of proof falls on the defendant to show why the enrichment should be retained. In determining whether this may be the case, thecourt should have regard to two considerations: the parties’ reasonable expectations and public policy (Garland, at para. 46; Kerr, atpara. 43). [59] This two-stage approach to juristic reason was designed to strike a balance between the need for predictability andstability on the one hand, and the importance of applying the doctrine of unjust enrichment flexibly, and in a manner that reflects ourevolving perception of justice, on the other. (

a) First Stage — None of the Established Categories Applies in These Circumstances [60] The first stage of the Garland framework asks whether a juristic reason from an established category operates todeny recovery. Michelle submits that none of these categories applies in the circumstances of this case. Risa takes the position that theInsurance Act required the proceeds of the policy to be paid exclusively to her as the validly designated beneficiary, such that theapplicable legislation constitutes a juristic reason to deny the recovery sought by Michelle.

[61] The main issue at this stage of the analysis is therefore whether a beneficiary designation made pursuant toss. 190(1) and 191(1) of the Insurance Act — which, when coupled with Lawrence’s insurance policy, makes it clear that Risa is the oneto whom the insurance proceeds are payable — provides a juristic reason for Risa to retain those proceeds in light of Michelle’s claim tothe money. Put differently, the question can be framed as follows: is there any aspect of this statutory framework that justifies the factthat Risa was enriched at Michelle’s expense?

If so, Michelle’s claim will necessarily fail. [62] My colleagues dispute this proposition. In their view, it is sufficient to show that there is some juristic reason for thefact that the defendant was enriched, and there is thus no need to demonstrate that the enrichment and the corresponding deprivationoccurred without a juristic reason. With respect, this proposition is at odds with the clear guidance provided by this Court in Kerr(para. 40, reproduced at para. 54 of these reasons) and disregards the work already done by the recognized categories of juristic reasonsidentified in Garland.

Each of these categories points to a relationship between the plaintiff and the defendant that justifies the fact that abenefit passed from the former to the latter. To focus exclusively on the reason why the defendant was enriched is to ignore this keyaspect of the law of unjust enrichment. [63] Two categories of juristic reasons might be said to apply in the circumstances of this case: disposition of law andstatutory obligations.

Disposition of law is a broad category that applies in various circumstances, including “where the enrichment of thedefendant at the plaintiff’s expense is required by law, such as where a valid statute denies recovery” (Kerr, at para. 41 (emphasisadded)). The statutory obligations category operates in a substantially similar manner, precluding recovery where a legislative enactmentexpressly or implicitly mandates a transfer of wealth from the plaintiff to the defendant.

Although there is undoubtedly a degree ofoverlap between these two distinct categories, what matters for the purposes of this appeal is that a plaintiff’s claim will necessarily failif a legislative enactment provides a reason for the enrichment and corresponding deprivation, so as to preclude recovery in unjustenrichment. As Professors Maddaugh and McCamus note in The Law of Restitution: . . . it is perhaps self-evident that an unjust enrichment will not be established in any case where enrichment of the defendant at theplaintiff’s expense is required by law.

The payment of validly imposed taxes may be considered unjust by some but their payment givesrise to no restitutionary right of recovery. [Emphasis added; footnotes omitted; p. 3-28.] [64] The jurisprudence provides ample support for this proposition. Among the issues in Reference re Goods andServices Tax, (SCC), [1992] 2 S.C.R. 445 (“GST Reference”), was whether suppliers registered under the Excise TaxAct, R.S.C. 1985, c. E-15, that incurred costs in collecting the Goods and Services Tax on behalf of the federal government could recoverthose costs from the government on the basis of restitution.

For a majority of this Court, Lamer C.J. answered this question in thenegative: Under the GST Act the expenses involved in collecting and remitting the GST are borne by registered suppliers. This certainlyconstitutes a burden to these suppliers and a benefit to the federal government. However, this is precisely the burden contemplated bystatute. Hence, a juridical reason for the retention of the benefit by the federal government exists unless the statute itself is ultra vires.[Emphasis added; p. 477.] [65] A similar issue arose in Gladstone v. Canada (Attorney General), 2005 SCC 21, [2005] 1 S.C.R. 325.

In that case,the respondents were charged under the Fisheries Act, R.S.C. 1970, c. F-14, for harvesting and attempting to sell large quantities ofherring spawn. The Department of Fisheries and Oceans seized and sold the herring spawn, and the appellant Crown in Right of Canadaheld the proceeds pending the outcome of the proceedings. The proceedings were eventually stayed and the net proceeds paid to therespondents.

Because the Crown refused to pay interest or any other additional amount, however, the respondents sought restitution inthe amount of $132,000, on the ground that the Crown had been unjustly enriched by its retention of the proceeds during the time ofseizure. Writing for a unanimous Court, Major J. denied that claim on the following basis: Here, Parliament has enacted a statutory regime to regulate the commercial fishery. It has provided an extensive framework dealing withthe seizure and return of things seized. This regime specifically provides for the return of any fish, thing, or proceeds realized.

This wasfollowed. Interest or some other additional amount might have been gratuitously included, but it was not. The validity of the FisheriesAct was not, nor could have been, successfully challenged. Therefore, the Act provides a juristic reason for any incidental enrichmentwhich may have occurred in its operation. As a result, the unjust enrichment claim fails. [para. 22] In short, it was Major J.’s position that the statutory regime, by specifying what had to be returned, made it clear that anything fallingoutside of the specified categories was to be retained by the Crown.

In other words, the Fisheries Act stipulated that, in certaincircumstances, a benefit would be retained by the Crown. [66] These cases are examples of situations where a statute precluded recovery on the basis of unjust enrichment.

It is tobe noted that in each case, recovery was denied because the legislation in question expressly or implicitly required the transfer of wealthbetween the plaintiff and the defendant and therefore justified the defendant’s retention of the benefit received at the plaintiff’s expense.It is in this way that the applicable legislation can be understood as “denying” or “barring” recovery in restitution and therefore assupplying a juristic reason for the defendant’s retention of the benefit. [67] What, then, should we make of ss. 190(1) and 191(1) of the Insurance Act?

The former permits the insured toidentify the person to whom or for whose benefit the insurance money is payable when the insured passes away. Coupled with theinsurance contract, it directs the insurer to pay the proceeds to the person so designated.

The latter provides that such a designation maybe made irrevocably. [68] Given the fact that a statute will preclude recovery for unjust enrichment where it requires (either explicitly or bynecessary implication) that the defendant be enriched to the detriment of the plaintiff, the provisions of the Insurance Act may thereforeprovide a juristic reason for the beneficiary’s enrichment vis-à-vis any corresponding deprivation that may have been suffered by theinsurer at the time the insurance money is eventually paid out.

For this reason, an unjust enrichment claim brought by the insurer againstthe designated beneficiary (revocable or irrevocable) would necessarily fail at this stage; the rights and obligations that exist in thatcontext — both statutory and contractual — justify the beneficiary’s enrichment at the insurer’s expense (Saskatchewan Crop Insurance

Corp. v. Deck, 2008 SKCA 21, 307 Sask. R. 206, at paras. 47-54). [69] A valid beneficiary designation under the Insurance Act has also been found to constitute a juristic reason thatdefeats a third party’s claim for the entirety of the death benefit in circumstances where that party paid some of the premiums under theerroneous belief that he or she was the named beneficiary. In Richardson (Estate Trustee of) v. Mew, 2009 ONCA 403, 96 O.R. (3d) 65,the deceased had maintained his first wife as the designated beneficiary under a life insurance policy.

His second wife, who did not havea contractual right to be named as beneficiary, wrongly believed that he had executed a change of beneficiary designation in her favour,and paid some of the policy premiums — initially from a joint bank account she shared with the deceased and later from her own bankaccount. She sought the imposition of a constructive trust in her favour over the policy proceeds, arguing that there was no juristic reasonfor the first wife’s enrichment.

Even accepting that the second wife could be said to have suffered a corresponding deprivation, theOntario Court of Appeal upheld the motion judge’s finding that a valid beneficiary designation under the Insurance Act amounted to ajuristic reason that defeated the second wife’s claim for the insurance money that was payable to the first wife.

I would observe that theclaimant in that case sought a constructive trust over the entire death benefit, and not merely the return of any payments made on thebasis of her erroneous belief; the Court of Appeal did not decide whether she would be entitled to the return of those payments, and thatquestion is not before us today. [70] At issue in this case, however, is whether a designation made pursuant to ss. 190(1) and 191(1) of the Insurance Actprovides any reason in law or justice for Risa to retain the disputed benefit notwithstanding Michelle’s prior contractual right to remainnamed as beneficiary and therefore to receive the policy proceeds.

In other words, does the statute preclude recovery for a plaintiff, likeMichelle, who stands deprived of the benefit of the insurance policy in circumstances such as these? In my view, it does not. Nothing inthe Insurance Act can be read as ousting the common law or equitable rights that persons other than the designated beneficiary may havein policy proceeds. As this Court explained in Rawluk v.

Rawluk, (SCC), [1990] 1 S.C.R. 70, at p. 90, the “legislature ispresumed not to depart from prevailing law ‘without expressing its intentions to do so with irresistible clearness’” (see also Gendron v.Supply and Services Union of the Public Service Alliance of Canada, Local 50057, (SCC), [1990] 1 S.C.R. 1298).

InKBA Canada Inc. v. 3S Printers Inc., 2014 BCCA 117, 59 B.C.L.R. (5th) 273, for example, the British Columbia Court of Appeal foundthat the Personal Property Security Act, R.S.B.C. 1996, c. 359, provided a “complete set of priority rules” that was “designed to replaceconvoluted common law, equitable and statutory rules that beset personal property security law with complexity and uncertainty”(paras. 27 and 21, citing Bank of Montreal v. Innovation Credit Union, 2010 SCC 47, [2010] 3 S.C.R. 3).

In those circumstances, therewas no “room for priorities to be determined on the basis of common law or equitable principles” (para. 22).

By contrast, while theInsurance Act provides the mechanism by which beneficiaries can be designated and therefore become statutorily entitled to receivepolicy proceeds, no part of the Insurance Act operates with the necessary “irresistible clearness” to preclude the existence of contractualor equitable rights in those insurance proceeds once they have been paid to the named beneficiary. [71] The reasoning put forward by McKinlay J. (as she then was) of the Ontario High Court of Justice in Shannon v.Shannon (1985), (ON SC), 50 O.R. (2d) 456, is particularly instructive in this regard.

Like Michelle, the plaintiff inShannon was the former spouse of an insured person who had contractually agreed to maintain the plaintiff as the sole beneficiary of thelife insurance policy in his name and “not to revoke such beneficiary designation at any time in the future” (p. 458). Shortly thereafter,and in breach of his contractual obligation, the insured person surreptitiously changed the beneficiary designation in favour of his nieceand nephew.

He passed away several years later, and when the plaintiff discovered the change in beneficiary designation, shecommenced an action asserting her entitlement to the proceeds of her former spouse’s insurance policy. McKinlay J. found in her favourand made the following observations (at p. 461): It would appear from s. 167(2) [i.e. the predecessor of s. 190(2) of the Insurance Act] that the insured may at any time before the filingof an irrevocable declaration alter or revoke an existing designation by way of a declaration.

The position of the defendant is that this is precisely what the insured did, and that any finding of the court of a trust in favour of theplaintiff would have the effect of the court’s attempting to overrule a clear statutory provision. But the Insurance Act provides a statutory framework for the protection of the insured, the insurer and beneficiaries; equity imposesduties of conscience on parties based on their relationship and dealings one with another outside the purview of the statute.

When heconcluded the separation agreement with his wife, the deceased bound himself to maintain the policy in good standing, which he did; healso bound himself to maintain it for the benefit of his wife, which he did not. [Emphasis added.] [72] Shannon therefore supports the proposition that while the Insurance Act may provide for the beneficiary’sentitlement to payment of the proceeds, it “does not specifically preclude the existence of rights outside its provisions” (p. 461).Similarly, in Chanowski v. Bauer, 2010 MBCA 96 , 2010 MCBA 96, 258 Man.

R. (2d) 244, the Manitoba Court of Appealrecognized that courts have readily accepted that contractual rights to policy proceeds may operate to the detriment of namedbeneficiaries: Generally, the courts have imposed remedial constructive trusts in factual circumstances where the deceased has breached an agreementregarding life insurance benefits.

These have arisen most commonly in cases where the husband executed a separation agreementpromising to retain his former wife as the beneficiary of his life insurance policy and, in contravention of that promise, before his death,the deceased changed the designation of his beneficiary to that of his present wife or another family member. [para. 39] [73] Accepting that contractual rights to claim policy proceeds can exist outside of the Insurance Act, can an irrevocabledesignati

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