Sinclair v. McAuley, 2012 MBCA 86

Citation: Sinclair v. McAuley, 2012 MBCA 86 Date: 20120913 Docket: AF 12-30-07760 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Freda M. Steel Madam Justice Barbara M. Hamilton Mr. Justice Marc M. Monnin BETWEEN : LORI ELLEN SINCLAIR ) ) (Petitioner) ) ) - and - ) C. B. Paul ) for the Appellant TODD HENRY McAULEY ) ) (Respondent) ) J. E. Crane and (by original action) ) T. M.

Keller ) for the Respondent AND BETWEEN: ) ) CRAIG GENAILLE AS THE ) Appeal heard and EXECUTOR OF THE ESTATE OF ) Decision pronounced: LORI ELLEN SINCLAIR ) September 13, 2012 ) (Petitioner) Respondent ) ) - and - ) ) TODD HENRY McAULEY ) ) (Respondent) Appellant ) ) (by order dated May 4, 2012) ) STEEL J.A. (for the Court): 1 This is an appeal from an interim discretionary order where the motions judge refused to order that the proceeds of two life insurance policies be held until a trial of the issue. 2 There are two life insurance policies at issue here, one with Sun Life Assurance Company for $100,000 and one arising from the mother’s employment in the approximate amount of $429,000.

Originally, the parties named each other as beneficiaries of the Sun Life policy. Immediately following the separation of the parties, and concurrent with the discovery of the mother’s fatal illness, the parties changed the beneficiary designation to benefit equally the adult child of the mother from a previous relationship and the minor child of the parties. The father now argues that he was under emotional duress at the time and seeks to have the designation changed back into his name.

With respect to the life insurance arising through the mother’s employment, there are a series of beneficiaries, only one of whom is the minor child, and the child’s share is only 35 per cent of the whole amount. That sum of money is specifically to be held in trust until the child is 21 years of age. 3 This is a sad case where shortly after the parties separated; the mother was diagnosed with cancer. She passed away less than seven months following the commencement of this litigation.

While she was still alive, the motions judge ordered child support to be paid by her in the monthly amount of $725, based on an income determination of $85,600 per year. Pursuant to The Family

Property Act, C.C.S.M., c.

F25, he also ordered that the assets of both parties be preserved until the completion of the family equalizationproceeding. 4 On the other hand, the motions judge refused to make an order binding the estate to make those child supportpayments, or order that the proceeds of the life insurance policies be held indicating, first, that upon death, there was adequate provisionfor the child, and second, that there was no arguable case as to duress or unconsciousability regarding the designation of the beneficiaryof the life insurance proceeds sufficient to justify an interim order holding the proceeds in abeyance. 5 It should be noted that both life insurance companies were notified of this appeal and indicated that they did not wishto be involved in the litigation.

The proceeds have been paid into the trust account of counsel for the estate pending the resolution of thislitigation. Counsel for the estate is also counsel for seven of the eight beneficiaries entitled to proceeds from the life insurance policy. The eighth beneficiary is the minor child. The Public Trustee of Manitoba was in attendance at the hearing of the motion.

Upon appeal,they have indicated, in writing, that they do not intend on being represented at further hearings because they believe that the positionpresently being taken by the executor of the estate is the one that would most benefit the child. 6 As we all know, a discretionary order in a family dispute arising from a child support issue should not be interferedwith unless there is a error in principle, a significant misapprehension of the evidence, or unless the award is so clearly wrong as toamount to an injustice. See Hickey v. Hickey, (SCC), [1999] 2 S.C.R. 518.

Where the matter is an interimdiscretionary order, the standard of deference will be even higher. Courts have repeatedly stated that successful appeals from interimorders will be rare and that such appeals are to be discouraged (see Martin v. Orris, 2010 MBCA 59, 255 Man.R. (2d) 126). 7 The issue was raised as to whether the court even had the jurisdiction to make an order pursuant to subs. 10(1)(

h) and(

i) of The Family Maintenance Act, C.C.S.M., c. F20, binding the estate after the death of the payor and ordering the father be designatedas a beneficiary of the life insurance policy, given that child support is a personal obligation. See, for example, Dutkowski v. Dutkowski,2007 BCSC 1558, 45 R.F.L. (6th) 433.

The appellant argued that the initial original application was made before the death of the payorand, therefore, the court would still have jurisdiction to make the order on a trial of the issue even though the payor had died in theinterim. 8 It is unnecessary for us to decide that issue because, even assuming that there is jurisdiction, there are no grounds tointerfere with the discretion of the motions judge in this case.

There was no misapprehension of fact or error in law, and we do notbelieve the decision was unjust. 9 As the motions judge indicated, the life insurance proceeds held in trust for the minor child are governed by theterms and provisions of The Trustee Act, C.C.S.M., c. T160. The Trustee Act has provision for the father to apply for income from thelife insurance proceeds of the child on a standard of reasonableness for the benefit of the child or for a variation of the trust. See subs.29(1) and (2) and s. 59. The Dependants Relief Act, C.C.S.M., c.

D37, allows for possible other relief should further ongoing support berequired. 10 The motions judge considered the overall legislative scheme available upon death to allow for support for the child anddeclined to make the order requested on an interim basis. We see no ground for appellate intervention. 11 The appeal is dismissed with costs. J.A. J.A. J.A.