EMILY LEA BEHM, AMY BEHM, v. THE ESTATE OF DARREN BEHM, 2023 SKKB 140

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 140 Date: 2023 06 28 Docket: KBG-BF-00066-2023 Judicial Centre: Battleford ___________________________________________________________________________ BETWEEN: EMILY LEA BEHM, AMY BEHM, and THE ESTATE OF DARREN BEHM APPLICANTS - and - SUN LIFE ASSURANCE COMPANY OF CANADA RESPONDENT Counsel: Antony J.V. Mokelky for the applicants Paul J. Harasen for the respondent ___________________________________________________________________________ JUDGMENT ELSON J.

June 28, 2023 ___________________________________________________________________________ Introduction [ 1 ] This judgment addresses an unusual situation related to the entitlement of three named beneficiaries to receive funds in certain plans or accounts in the name of the plan holder and which are carried and administered by the respondent. The context in which this situation arises is tragic in that one of the named beneficiaries unlawfully caused the death of the plan holder. Later, that beneficiary took her own life. [ 2 ] The Court is asked to address two questions.

The first question pertains to the entitlement of the deceased

beneficiary’s estate to receive the funds in the subject plans. This question engages the public policy rule that prevents persons from receiving a benefit from their own criminal wrongdoing. This rule is sometimes referred to as the “Criminal Forfeiture Rule”.

If the application of the public policy rule precludes the deceased beneficiary’s estate from receiving the plans’ funds, the second question pertains to whether the funds, which would otherwise have passed to the deceased beneficiary, can be transferred directly to the other two beneficiaries, without passing through the plan holder’s estate. [ 3 ] I should add that the respondent, the administrator of the plans/accounts in question, takes no position on the merits of this application.

It is simply prepared to abide by the Court’s direction. [ 4 ] For the reasons that follow, I conclude that the public policy rule applies and that the deceased beneficiary’s estate is not entitled to receive the funds in the subject plans. Having said this, I also conclude, with some measure of regret, that the funds that were to pass to the deceased beneficiary must now form part of the plan holder’s estate.

Background [ 5 ] The applicants, Emily Behm [Emily] and Amy Behm [Amy], are the adult children of Darren Behm [Darren] and Elaine Behm [Elaine]. [ 6 ] Darren died on August 25, 2020, at his home in Lloydminster, Saskatchewan. The cause of death was blunt force trauma. RCMP officers discovered Darren’s body after Elaine attended at the detachment and informed police about an incident in the family home. In relation to Darren’s death Elaine faced a charge of second degree murder.

While awaiting trial and a court ordered psychiatric assessment, Elaine committed suicide in her cell at the Pine Grove Correctional Centre in Prince Albert, Saskatchewan. [ 7 ] According to the amended original application on this file, Darren was the named holder of a Registered Retirement Savings Plan, a Group Pension Plan Account and a Non-Registered Account maintained and administered by the respondent. For the sake of brevity, I will simply refer to these accounts as the “Sun Life Accounts”. To the best of Emily and Amy’s knowledge, Darren designated Elaine as a 98% beneficiary for each Sun Life Account.

He also designated each of Emily and Amy as 1% beneficiaries. There is no evidence of any designation of contingent beneficiaries. [ 8 ] At the outset, it must be noted that this is not the first time the public policy rule has arisen in connection with this family. The matter first arose in the context of life insurance proceeds. At the time of his death, Darren held two life insurance policies underwritten for his employer. Elaine, Emily and Amy were designated beneficiaries under each policy.

The proportions for their entitlements were the same as for the Sun Life Accounts, with Elaine entitled to 98% of the total life insurance benefits while Emily and Amy were each entitled to 1%. After Darren’s death, the insurer paid out each of Emily’s and Amy’s entitlements. It then applied to this Court for directions on the remaining insurance proceeds. Clackson J. directed the insurer to pay the remaining proceeds into court. He later heard submissions for the distribution of those proceeds.

His decision on that issue is in The Canada Life Assurance Company v Emily Behm, Amy Behm and the Estate of Elaine Behm (25 August 2022) Battleford, QBG-BF-00150-2021 (Sask QB), [ Canada Life v Behm ]. [ 9 ] The central question in the proceeding related to whether Elaine and her estate were entitled to share in the life insurance benefits. In considering that question, Clackson J. first had to determine whether, on the balance of probabilities, Darren’s death had been caused by Elaine’s criminal act. To address this issue, my learned colleague relied on affidavit evidence presented by Emily.

The description of the evidence in that affidavit, and the conclusions drawn therefrom, are set out in the decision. Clackson J. noted that Elaine had been struggling with mental health issues, including paranoia disorder, since the summer of 2018. Although prescribed medication, she did not take it regularly, if at all. Elaine lost two jobs during this time and eventually relocated to a women’s shelter in Lloydminster, where she was living at the time Darren died. [ 10 ] In his decision, Clackson J. specifically referenced a telephone conversation between Emily and her mother on September 6, 2020.

The details of that conversation, and the conclusion drawn from it, are described at paras. 11-12 of the decision. These paragraphs read as follows: [11] Emily had sporadic contact with Elaine while Elaine was in custody. In a telephone conversation on September 6, 2020, Elaine told Emily she was sorry for what she did. Emily asked what she meant and Elaine responded that it was too terrible to explain. Elaine asked Emily how she was feeling and Emily responded that she was not well because Elaine had taken away both of her parents. Elaine said “I know I did Emily.

I’ve nothing but time to think about that and I know what I did”. Later in the conversation Elaine said, “you know what I have done, we all know what I have done.”…. [12] Elaine’s conversation with Emily while Elaine was in custody strongly suggests that Elaine caused Darren’s death. Elaine’s suicide can be taken as an expression of her guilt and remorse for what she did. In these circumstances, I conclude that it is more likely than not that Elaine caused Darren’s death. [ 11 ] Following this conclusion, Clackson J. addressed Elaine’s mental health issues in the context of the presumption of sanity.

He concluded, correctly in my view, that while there was some evidence of mental disorder leading up to Darren’s death, there was no evidence that Elaine was in a mental state such that she was incapable of appreciating the nature and quality of her actions. It necessarily followed that, in causing Darren’s death, Elaine committed a criminal act. [ 12 ] Based on the above finding of fact, as described by Clackson J., I am satisfied that this finding similarly applies here based on the doctrine of res judicata .

Before leaving this point, I should note that Emily also deposed an affidavit in support of this application. Much of it contains the same evidence as was presented before Clackson J. Law and Analysis Public Policy Rule

[13] The public policy rule engaged in this application has a lengthy history that is well documented in theapplicants’ written submission. A frequently cited authority in Canada is the judgment of the Supreme Court of Canada in Nordstrom vBaumann, (SCC), [1962] SCR 147 [Nordstrom].

In Nordstrom, Ritchie J. commented on the nature and breadth of therule at page 156: The rule of public policy which precludes a person from benefiting from his or her own crime is an integral part of our system of law,and although some doubts have been raised as to whether this rule overrides the statute law as to the distribution of the estate of anintestate (see In re Houghton, Houghton v. Houghton [[1915] 2 Ch. 173 (Eng. Ch. Div.), at 176, 84 L.J. Ch. 726)]), the better viewappears to me to be that it applies to such cases (see In re Pitts, Cox v. Kilsby [[1931] 1 Ch. 546 (Eng. Ch. Div.), at 550, 100 L.J.

Ch.284], Whitelaw v. Wilson [(1934), (ON SC), 62 CCC 172], and Re Estate of Maud Mason [ (BC SC),[1917] 1 WWR 329]). As Fry L.J. in Cleaver v. Mutual Reserve Fund Life Association, supra [[1892] 1 QB 147, 61 LJQB 128] , at p.156 said: It appears to me that no system of jurisprudence can with reason include amongst the rights which it enforces rights directly resulting tothe person asserting them from the crime of that person.

See also The Bank of Nova Scotia Trust Company v Rogers, 2021 ONSC 1747 at para 3, and Saskatchewan (Minister of Justice) vThatcher, 2010 SKQB 109 at paras 80-81, 316 DLR (4th) 516. [14] It is important to note that the public policy rule is not confined to estate and life insurance scenarios.

Theauthorities also reveal that the rule will serve to preclude the payment of other benefits, including pension benefits and RRSP transfers.See Stroh v Stroh, 2022 ABQB 82, and Unger Estate (Re), 2022 BCSC 189 [Unger]. [15] Based on the findings of fact in Canada Life v Behm, and applying the above described public policy rule, I amsatisfied that, by causing Darren’s death through a criminal act, Elaine became disentitled to receive any portion of the Sun LifeAccounts despite her designation as a named beneficiary. It necessarily follows that Elaine’s estate is also disentitled.

Transfer of 98% of the Sun Life Accounts [16] The next question is to determine whether the 98% of the funds in the Sun Life Accounts, that would otherwisehave passed to Elaine, can simply be transferred directly to Emily and Amy. If not, and without a lawfully entitled beneficiary, the fundswill form part of Darren’s estate. As such, the funds would be included in

Part I of the

schedule of assets and be subject to probate fees.Based on information provided by counsel for Emily and Amy, there would be no income tax consequences in either scenario. [17] Even so, the applicants argue that a direct transfer is the most appropriate disposition and is called for by law. Inmaking this submission, the applicants rely heavily on the decision in Unger.

An understanding of that case is assisted by brief referenceto its facts. [18] In Unger, the deceased’s estate included three RRSPs and a Tax-Free Savings Account [TFSA] for which shehad designated each of her two sons, “L” and “C”, as 50% beneficiaries. C pleaded guilty to second-degree murder in relation to hismother’s death. The Court concluding that C’s crime precluded him from receiving anything from his mother’s estate as well as from herRRSP and TFSA accounts.

It directed that C’s bequest from his mother’s estate pass to his infant daughter. [19] As for C’s 50% share of the RRSP and TFSA accounts, the Court directed the deceased’s executors to pay thebenefits directly to L. The stated basis for the direction focused on s. 95 of the Wills, Estates and Succession Act, SBC 2009, c 13[WESA]. That provision stipulates that a benefit payable to a designated beneficiary “does not form part of the participant’s estate and isnot subject to the claims of the participant’s creditors.” [20] As I understand the applicants’

interpretation of the decision in Unger, it is that, since a benefit payable to adesignated beneficiary could not form part of the plan holder’s estate, the only manner by which it could be transferred to L would bethrough direct transfer. Otherwise, it would not be transferred to anyone, at all. [21] Respectfully, I disagree with this

interpretation. A closer reading of the WESA reveals that

Part 5 of the statute,containing sections 84-100, is devoted to the manner in which a “participant” (defined as a person who makes a designation) can, ondeath, transfer rights under a “benefit plan” to one or more designated beneficiaries. A “benefit plan” is specifically defined in s. 1 of thestatute. As I read the definition, it essentially includes non-insurance based funds, plans, trusts and savings accounts, some of which arespecifically registered or otherwise recognized under the Income Tax Act, RSC 1985, c 1 (5th Supp).

Part 5 sets out specific requirementsfor a participant’s designation. These requirements are reasonably comprehensive and will generally supersede inconsistent provisions ina benefit plan. See s. 84(2) of the WESA. [22] One provision in

Part 5 that is noteworthy in the context of the Unger decision is s. 91. This provision addressesthe situation where a designated beneficiary dies before the participant’s death. This provision reads as follows: 91 If a designated beneficiary dies before the participant, and no disposition of the share of the deceased designated beneficiary isprovided for in the designation, the share is payable (

a) to the surviving designated beneficiary, (

b) if there is more than one surviving designated beneficiary, to the surviving designated beneficiaries in equal shares, or (

c) if there is no surviving designated beneficiary, to the participant’s personal representative. [Emphasis added]

In Unger, it was noted that L relied on s. 91, as well as s. 95, to support the argument that C’s entitlement be transferred directly to him.The inference I draw from this submission is that it is premised on the evident purpose of the designation scheme in

Part 5. That purposeis to preserve, to the extent possible, a participant’s desire to designate beneficiaries, thereby avoiding the need for a benefit plan to passthrough the participant’s estate. As I read

Part 5, this purpose is to receive paramount consideration, even where the death of a designatedbeneficiary would otherwise terminate the designation. [23] In this context, I think L’s argument in Unger was compelling. Applying the purposive approach to statutoryinterpretation, as articulated in Rizzo & Rizzo Shoes Ltd., Re, (SCC), [1998] 1 SCR 27, and in Bell ExpressVu LimitedPartnership v Rex, 2002 SCC 42, [2002] 2 SCR 559, direct transfer of the benefit plans to a non-disentitled designated beneficiary is notmeaningfully or substantively different from a transfer to a surviving designated beneficiary. It is also consistent with the purpose of thedesignation scheme in

Part 5. [24] Having regard to the above comments, I find that the decision in Unger turns almost entirely on an overallinterpretation of

Part 5 of the WESA and the designation scheme set out in the provisions in that part. Contrary to the applicants’ ablyargued submission, it does not turn on whether a benefit plan, or portion thereof, forms part of a participant’s estate. [25] More to the point, I am persuaded that, given the specifics of the scheme in

Part 5 of the WESA, the decision inUnger is of little assistance to the resolution of the present application. As commendable as I find the British Columbia approach to be,Saskatchewan does not have a benefit plan designation scheme that is anything close to that which exists in that province. In particular,Saskatchewan does not have a scheme that, either expressly or implicitly, recognizes rights for surviving or non-disentitled designatedbeneficiaries.

It necessarily follows that Elaine’s disentitlement to the Sun Life Accounts cannot, without a specific basis in law, result inthe direct transfer of her otherwise designated interest in those accounts to Emily and Amy. [26] I find support for this conclusion in the decision of this Court in McCarthy Estate v McCarthy, (SK KB), [1994] 7 WWR 537 (QL) (Sask QB). In that case, the respondent murdered his wife. At the time of her death, therespondent held sole title to the family home, which he had purchased before the marriage.

After the wife’s death, life insuranceproceeds, payable to the mortgagee, paid out the mortgage, resulting in a substantial increase in the home’s equity. The wife’s estateapplied for an order pursuant to The Matrimonial Property Act, SS 1979, c M-6.1 (now repealed), vesting the home in the name of theestate. In making this submission, the estate relied on various authorities, including Nordstrom.

It argued that, based on the public policyrule, it was open for the Court to suspend operation of the statutory provision that precluded division of matrimonial property rights afterdeath. [27] Gerein J. (as he then was) dismissed the estate’s application. That said, he recognized the possibility that theestate could make a claim based on a constructive trust. In his analysis, Gerein J. fully acknowledged the existence of the public policyrule reflected in Nordstrom and found there was much to commend its application.

Even so, he questioned the propriety of the estate’sargument that application of the rule would justify suspension of a substantive statutory provision. In this regard, he said the following atpara. 10: 10 In my opinion, there is a significant difference between suspending or refusing to enforce the rights of a wrongdoer, as where theindividual was entitled to share in an intestacy, and creating a statutory right in some other person. In the instant case, the petitioner’sright to share in the matrimonial home is not a common law right, but one created solely by statute.

The legislature has devised anextensive scheme for the distribution of matrimonial property. As part of that scheme the rights of a spouse do not survive death unlessprior thereto an application has been brought. As the spouse no longer comes within the parameters of the scheme, there are no rightsunder that legislation to be enforced on her behalf.

In short, I am asked to not only divest the respondent of his unjust enrichment, butalso to take the additional step of investing the spouse with a right in order to secure the enrichment for her estate. [Emphasis added] [28] The lesson I draw from the above comment is this. Even where there is justification for applying the publicpolicy rule, imposition of any remedy that follows its application must be grounded in law or equity.

While I am persuaded that such lawexists in British Columbia, I do not find that it similarly exists in Saskatchewan. [29] In making the above comments, I have not ignored the applicants’ submission that this Court should exercise itsinherent jurisdiction in directing the transfer to Emily and Amy. This submission is premised on the view, expressed in McRobbHoldings Ltd. v Chelico’s Restaurants Ltd. (SK KB), [1993] 8 WWR 752 (Sask QB), that this Court can exercise itsinherent jurisdiction to fill a “void” where legislation does not address the relief required.

Regretfully, I cannot accept that thissubmission has any merit in the matter before me. At the outset, I do not accept that there is a void in the legislation, as the applicantscontend. Such a void would exist if there was no remedy available to address a problem that demands a remedy. In this case, I accept thatthe preferred remedy is not available. That reality does not equate to a legislative void. The less preferred remedy, namely, the passing ofthe Sun Life Accounts through Darren’s estate, can still be pursued.

It necessarily follows that this is not an appropriate case for theexercise of the Court’s inherent jurisdiction. Conclusion [30] In the result, there shall be an order setting out the following directions: a. The estate of Elaine Behm, deceased, is disentitled from receiving any funds or benefits from the following accounts, in the nameof Darren Behm, deceased, as administered by the respondent: i. Group Pension; ii. Registered Retirement Savings Plan; and iii. Non-Registered account; b.

The respondent shall transfer 98% of the funds or benefits from the above described accounts to the personal representative of the

estate of Darren Behm, deceased; c. The respondent shall transfer 1% of the funds or benefits from the above described accounts to each of Emily Behm and Amy Behm; d. Rule 10-4 of The Queen’s Bench Rules is not waived; e. There shall be no costs in respect of this application. [ 31 ] It must be noted that I have not directed a waiver of Rule 10-4 of The Queen’s Bench Rules . There may be specific wording that the respondent will require to capture the intent and spirit of this decision.

If so, I would be happy to revisit the terms of the order directed in this decision. [ 32 ] Finally, I wish to extend my thanks to the applicants’ counsel for the comprehensive written submission he filed in this matter. While I did not accept all his submissions, he took the necessary time to present a reasoned pathway, based on his perspective of the law and the evidence, for the Court to consider. Judges can ask for nothing more. J. R.W. ELSON