The Ontario Court of Appeal decision of Dhingral v Dingral Estate 2012 ONCA 261 departs from the long-term legal adage that for reasons of public policy, a criminal may not benefit from his or her own crime.
In 1998, the husband ( appellant) took out a group life insurance policy in amount of $51,000 with his wife named as beneficiary.
Under the policy, the wife was also insured and the husband was the beneficiary.
The husband had been suffering from serious mental disorder for many years and in 2006, he killed his wife.
He was tried on charge of second degree murder and in 2008, and was found not criminally responsible on account of mental disorder.
In May 2007, the respondent son, acting on a Power of Attorney, submitted an Accidental Death Claim application claiming proceeds of insurance policy on behalf of his father.
The Insurer approved payment of the insurance proceeds to the father but did not immediately pay the out.
After the criminal trial, the son, now acting as administrator of mother’s estate, requested that proceeds should be paid to her estate.
In 2009, an order was granted requiring the insurer Life to deposit the insurance proceeds into court .
The husband then brought an application to have proceeds paid to him.
The Application judge dismissed application and the husband and the appeal was allowed.
The order of the application judge was set aside, and an order was made that money deposited with accountant of Superior Court of Justice, along with all interest accrued, was rightfully payable to the husband.
If person was found not criminally responsible on account of mental disorder was not morally responsible for act, there was no rationale for applying rule of public policy .
It was an error for application judge to describe the husband as having committed second degree murder.
Decisions from the Supreme Court of Canada have provided various descriptions of the public policy rule. For example:
Oldfield v. Transamerica Life Insurance Co. of Canada, 2002 SCC 22,  1 S.C.R. 742 (S.C.C.), at para. 11:
“The public policy rule at issue is that a criminal should not be permitted to profit from crime. Unless modified by statute, public policy operates independently of the rules of contract. For example, courts will not permit a husband who kills his spouse to obtain her life insurance proceeds, regardless of the manner in which the life insurance contract was worded. As Ferguson J. held in the court below, public policy “applies regardless of the policy wording — it is imposed because of the courts’ view of social values” (p. 119).”
Brissette v. Westbury Life Insurance Co.,  3 S.C.R. 87 (S.C.C.), at p. 94:
“The rationale of the policy which denies recovery to the felonious beneficiary is that a person should not profit from his or her own criminal act. It is consistent with this policy that a person should not be allowed to insure against his or her own criminal act irrespective of the ultimate payee of the proceeds.
Disinherited.com is in complete agreement with this Ontario Court of Appeal decision and feel that it would be accepted as good law throughout the rest of Canada.
The basis of the public policy against benefiting from the proceeds of one’s crime was always based on the notion of criminal responsibility, and when that is lacking due to reasons of insanity, the public policy principle should not apply.