Executive Summary: Key Legal and Evidentiary Issues

• Competing claims by two brothers over segregated fund insurance proceeds payable on their mother’s death, despite clear written beneficiary designations in favour of one son.
• Challenge to the beneficiary’s entitlement based on an alleged oral promise to share the proceeds, supported only by uncorroborated hearsay and a brief translated video clip.
• Consideration of whether the designated beneficiary held the insurance proceeds on a resulting trust for the intestate estate, engaging the presumption of resulting trust from Pecore and the competing approaches in Calmusky and Mak.
• Analysis of the deceased’s intention, including handwritten notes to RBC advisors and her reliance on professional advice, to determine if the designation was mere administrative convenience or a true gift.
• Rejection of a constructive trust claim over the policy proceeds due to the absence of unjust enrichment, corresponding deprivation, and lack of juristic reason.
• Costs outcome favouring the successful moving party, with a fixed partial indemnity costs award and the possibility of set-off against the unsuccessful party’s share of the estate.

Background and family relationships

Valentina Masitch died on December 14, 2023, without a will. She was survived by her two adult sons, Dimitri and Oleg. Dimitri resided in Toronto, where Valentina lived, while Oleg resided in Israel at the relevant times. The dispute arose because Valentina held two segregated fund policies issued by RBC Life Insurance Company: Policy No. 723817 (a non-registered policy) and Policy No. 723809, a tax-free savings account (TFSA). In both policies, she designated Dimitri as the sole beneficiary. After Valentina’s death, disagreements between the brothers over entitlement to the policy proceeds led RBC Life to seek the court’s direction and to pay the funds into court.

Procedural history and payment into court

RBC Life, facing competing claims from Dimitri and Oleg, commenced an application seeking permission to pay the insurance proceeds into court and be discharged from further responsibility. On August 21, 2024, Justice Stevenson granted an order authorizing the payment of the amounts payable under the two policies into court. Once those funds were secured, Dimitri brought a motion for payment out of court to him as the named beneficiary, plus interest, along with an order that Oleg pay his costs of the motion.

Positions of the parties on entitlement to the policies

Dimitri relied primarily on the written beneficiary designations. He argued that the policies clearly named him as beneficiary and there was no evidence that Valentina had ever revoked or changed those designations. He further stated there was no document or statement from his mother suggesting the insurance should be treated other than in accordance with the Succession Law Reform Act (SLRA) provisions governing beneficiary designations. Dimitri also said that he had used funds from his own personal injury settlement to help his mother invest in RBC products, which he said explained why she chose him as the beneficiary of the policies. Oleg advanced a very different narrative. He asserted that the beneficiary designations in Dimitri’s favour were made only as a matter of administrative convenience, because Dimitri lived in Toronto and assisted their mother with her finances, while Oleg was abroad in Israel and their mother had limited English. Oleg claimed that their mother intended that the proceeds of the policies be divided equally between her two sons, in line with numerous conversations among the three of them and handwritten notes she left with the policy documents. He further alleged that, in his presence, Dimitri promised their mother that he would share the policy proceeds equally with Oleg, and that by refusing to do so after her death, Dimitri breached that promise.

Statutory framework for beneficiary designations

The court set out the relevant provisions of the SLRA concerning beneficiary designations under a “plan,” which the parties agreed included the segregated fund policies. Under section 51(1) of the SLRA, a participant may designate a person to receive a benefit payable under a plan on death either by a signed instrument or by will, and may revoke such a designation in the same manner. Section 53 provides that the plan administrator is discharged by paying the benefit to the person designated under the latest valid designation, absent actual notice of a later but technically non-compliant designation or revocation. It also confirms that the designated person may enforce payment, subject to any defences that could have been raised against the original participant or their personal representative. Against this statutory backdrop, the key questions became whether Dimitri had made a binding enforceable promise to share the proceeds with Oleg, and whether, notwithstanding the statutory designation, Dimitri might nonetheless hold the proceeds on trust (resulting or constructive) for the estate or for Oleg.

Assessment of the alleged promise and evidentiary concerns

Oleg’s argument that Dimitri promised to share the policy proceeds rested on his own evidence about conversations among himself, their mother, and Dimitri. He relied on alleged oral statements by the deceased and by Dimitri, as well as on handwritten notes that their mother had written on Post-it notes attached to an RBC segregated funds statement. Those notes recorded questions for her RBC advisors: one about tax reporting, another asking for an explanation of the “Maturity Guarantee Death Benefit,” and a further question asking whether she needed a will for her two sons, “Dim + Oleg,” along with a final note questioning whether this type of insurance was the best choice for “my sons.” The statement to which the notes were attached clearly identified Dimitri as the beneficiary of the TFSA policy as of June 30, 2022. The court found that the notes were compelling evidence that Valentina sought and relied on professional advice from her RBC advisors, rather than placing primary reliance on Dimitri for her investment decisions. However, the court did not accept that the notes expressed any clear intention to divide the policy proceeds equally between her sons or to impose a legal obligation on Dimitri to share them. The notes contained questions and references to her sons, but no explicit instructions or directions about division of assets or the policies.

Application of corroboration rules and hearsay

In assessing Oleg’s evidence about conversations and promises, the court considered section 13 of the Evidence Act. That provision states that, in an action involving the heirs or next of kin of a deceased person, an interested party cannot obtain a judgment solely on their own evidence about matters occurring before the deceased’s death without some corroborating material evidence. Much of Oleg’s account of the alleged promise was uncorroborated hearsay and was disputed by Dimitri. Oleg also relied on a short video clip, apparently recorded by Dimitri on his way to a bank and later sent to Oleg, with a certified translation from Russian. In the clip, Dimitri spoke of “savings” left by their mother, told Oleg he would have to deal with matters himself with a lawyer, and stated words to the effect that what he had promised their mother was “gone with mother.” The court accepted that this was the only corroborated evidence of any “promise” by Dimitri to his mother. However, the court found that the clip was vague: it did not mention the policies, did not specify what was promised, and said nothing about sharing policy proceeds or any consideration for such a promise. The judge concluded that this clip was insufficient to establish a specific, binding promise to divide the policy proceeds equally, or to demonstrate that Valentina intended, at the time of making the designations, to gift the proceeds equally to both sons.

Determining the deceased’s intention

In evaluating intention, the court stressed that, if Valentina truly intended equal division of these particular policy proceeds, she could have named both sons as beneficiaries directly on the policies. This was especially so given that she was clearly aware of both sons’ positions, had written their names in her notes to RBC, and had access to professional advice. There was no corroborated evidence explaining why she chose only Dimitri as beneficiary or indicating that he was to hold the proceeds for some other purpose or person. On the evidentiary record, the court found that Oleg had not proved that Dimitri made or breached a binding promise to share the proceeds, nor had he shown that Valentina intended Dimitri to hold the proceeds on anything other than his own account as beneficiary.

Resulting trust arguments and case law

Oleg also argued that, even if Dimitri was the named beneficiary, he held the proceeds on a resulting trust for Valentina’s estate. He relied on the Supreme Court’s decision in Pecore v. Pecore, which established that a gratuitous transfer from a parent to an adult child presumptively gives rise to a resulting trust in favour of the transferor’s estate unless the adult child can show that the transfer was intended as a gift. Oleg cited Calmusky v. Calmusky, where an Ontario court extended that presumption to beneficiary designations on registered plans in favour of adult children, effectively requiring the beneficiary to prove that the designation was intended as a gift and not for the estate. The judge, however, turned to Mak (Estate) v. Mak, a later Ontario decision that expressly declined to follow Calmusky and carefully considered the interaction between the Pecore presumption and the SLRA provisions on beneficiary designations. In Mak, the court emphasized that Pecore dealt with inter vivos transfers, whereas a beneficiary designation is a testamentary-type direction governed by specific legislation. It noted that Part III of the SLRA explicitly allows designated beneficiaries under plans and that section 53 requires administrators to pay according to those designations. Mak concluded that the presumption of resulting trust from Pecore should not automatically apply to beneficiary designations, and that the onus stays on the challenger to prove that the designation was meant to benefit the estate rather than the named beneficiary.

Rejection of the resulting trust claim

Following Mak, the judge preferred its reasoning over that in Calmusky. Applying that approach, the court held that the burden rested on Oleg to show that Valentina’s intention in designating Dimitri was to benefit her estate, rather than to make a gift directly to him. On the record, Oleg did not meet that burden. There was no persuasive evidence that the designation was merely for convenience or that Valentina intended Dimitri to hold the policy proceeds on a resulting trust for the estate. Accordingly, the presumption of a resulting trust did not apply, and Dimitri’s entitlement as designated beneficiary remained intact.

Constructive trust and unjust enrichment

Oleg advanced an equitable argument based on constructive trust, relying on the Supreme Court of Canada’s decision in Moore v. Sweet. In that case, the Court recognized that a constructive trust can be imposed over life insurance proceeds where there is unjust enrichment: a valid designation has been made, the beneficiary receives a benefit, a claimant suffers a corresponding deprivation, and there is no juristic reason for the enrichment. Oleg argued that, even if Dimitri was properly designated, it would be against conscience for him to retain the full proceeds. The judge found that the necessary elements of unjust enrichment were not established. There was no clear deprivation to Oleg tied to a specific legal or equitable entitlement to the insurance proceeds, and Dimitri’s receipt of the proceeds was supported by a clear statutory and contractual juristic reason: the valid beneficiary designation under the SLRA and the policy. The court therefore declined to impose a constructive trust over the proceeds in Oleg’s favour.

Outcome on the motion and costs

Having rejected the alleged promise, the resulting trust theory, and the constructive trust claim, the court concluded that Dimitri, as the designated beneficiary under both segregated fund policies, was entitled to the funds held in court. The judge granted Dimitri’s motion and ordered that all amounts paid into court by RBC Life under the earlier order, together with accrued interest, be paid out to Dimitri. The decision did not specify the dollar value of the insurance proceeds, so the exact monetary amount of the funds and interest payable to Dimitri cannot be determined from the judgment text. On costs, the judge held that Dimitri was the successful party and therefore presumptively entitled to his costs of the motion. After considering the usual factors under the Courts of Justice Act and the Rules of Civil Procedure—such as the importance but limited complexity of the issues—the court fixed costs at $4,335.22 on a partial indemnity basis, inclusive of HST and disbursements, payable by Oleg within 30 days. If Oleg failed to pay within that time, the costs could be deducted from his share of the estate and paid to Dimitri. In practical terms, the successful party was Dimitri, who received an order for payment of the full segregated fund policy proceeds plus accrued interest (in an amount not specified in the decision), together with a quantified costs award of $4,335.22 in his favour.