When Can One Person Kill Another and Still Share in the Estate?

Yesterday, the Ontario Court of Appeal provided some insight into and refinement of the long-standing rule of public policy that a person who kills another cannot share in the deceased’s estate, or in this case, in proceeds of an insurance policy.

In Dhingra v. Dhingra Estate, the Court had to determine whether a husband, who had killed his wife, is entitled to proceeds of a life insurance policy for which he was the named beneficiary.  The husband was tried on a charge of second-degree murder and found not criminally responsible on account of mental disorder.  The issues before the Court were (1) whether the Judge below had improperly applied the public policy rule to deny the husband the proceeds of the policy and (2) whether the Civil Remedies Act, 2001 (Ontario) applied in the circumstances to similar effect.

The Judge below found that the line of cases from the United States holding that the public policy rule only applies in cases of intentional killing was not the law in Canada.  The Judge went on to find that, despite the determination that the husband was not criminally responsible for his act, he had nonetheless physically committed second degree murder, a somewhat remarkable statement given that the criminal court had found otherwise.  As a result, the Judge applied the public policy rule and denied the proceeds to the husband.

The Court of Appeal disagreed, finding the law to be that a person who is not criminally responsible for an act on account of mental disorder is not prevented from taking under an insurance policy.  Because the public policy rule “is founded in the theory that people should not profit from their crimes, or more broadly, by their own wrongs”, the Court found that if a person is not morally responsible for the act, there is no reason to apply the rule – in other words there is no moral wrong.

The Court relied on authority of the Supreme Court of Canada and the Ontario Courts from the 1960s and 1970s supporting a common law exception to the policy rule of forfeiture in instances where a person is “insane”.  In addition, the Court relied on more recent developments supporting the exception.  In particular, the Court referenced amendments to the Criminal Code to remove the insanity defence and replace it with the concept of not criminally responsible on account of mental disorder.  The Court reflected on the policy reasons for the amendment, noting that a mentally ill offender is poorly served by being punished for an offence for which he or she is not morally responsible.  The Court also quoted from the Supreme Court of Canada that “Parliament has signaled that the NCR [not criminally responsible] accused is to be treated with the utmost dignity and afforded the utmost liberty compatible with his or her situation”.  The Court also looked to legislative exemptions to the public policy rule in the United States and to the approach in other common law jurisdictions.

The other issue to be resolved in the case was the application of the Civil Remedies Act, 2001 (the “Act”).  Section 3 of the Act permits an application by the Attorney General (Ontario) for an order forfeiting property that is proceeds of unlawful activity.  “Unlawful activity” is defined in the Act to include “an offence under an Act of Canada, Ontario or another province or territory of Canada”.  In addition the Act provides under s. 17 that “proof that a person was … found not criminally responsible on account of mental disorder in respect of an offence is proof that the person committed the offence”.  The issue was whether those provisions changed the common law with respect to the exception to the public policy rule.  While the Court accepted that the Civil Remedies Act, 2001 is an indication that public policy in Ontario favours preventing persons from profiting from wrongdoing, even where found not criminally responsible by reason of mental disorder, the Court held that the Act does not supplant the common law exception to the public policy rule.  The Court found that, “[A]t its highest, the Act indicates that the rule [i.e. the exception] ought not to be applied automatically”.

The Court reconciled the competing policies by allowing the common law and the Act to operate in their respective spheres.  It held that as the Legislature had only recently addressed the issue, it did not seek to wholly abrogate the common law, but intended to leave the common law rules intact.  The provision in the Act requiring an application by the Attorney General was found to be an intended limitation on the availability of remedies under the Act and therefore a limitation on any restriction of the common law rule.

Interestingly, the Court noted that the effect of an order under the Act would be a forfeiture of the policy proceeds to the Crown, a result it clearly found to be unsatisfactory.  In what appears to be a suggestion to the Legislature, the Court of Appeal stated that a more compelling expression of public policy would be to deem the accused to have predeceased the victim, rendering him or her unable to participate in the insurance policy or estate, but allowing for others to do so rather than simply forfeiting proceeds.

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