Last week the Ontario Court of Appeal released its decision in Carrigan v. Carrigan Estate 2012 ONCA 736 which will have an impact on who may be entitled to pension death benefits under the Pension Benefits Act. The Court was asked to address the following question: who receives the pension death benefit when the member of a pension plan dies and is survived by both a common law spouse and a legally married spouse from whom he was separated but who was also designated as a beneficiary of his pension plan?
Melodee and Ronald Carrigan were married in 1973 and remained legally married until his death in 2008. In 2002 Mr. Carrigan had designated Mrs. Carrigan and their daughters as the beneficiaries of his death benefit of his pension plan. The Carrigans separated in January 2000 when Mr. Carrigan began living with the respondent Jennifer Quinn. Mr. Carrigan continued to live with Ms. Quinn until his death.
The Decision at First Instance
The trial judge held that while both Mrs. Carrigan and Ms. Quinn met the statutory definition of spouse under section 48 of the Pension Benefits Act, there could only be one spouse for the purposes of the Act. As Ms. Quinn was living with Mr. Carrigan at the time of his death, the trial judge held Ms. Quinn was the spouse who was entitled to his death benefit. The trial judge also rejected Mrs. Carrigan’s second argument that she and her two daughters were entitled to the death benefit as they were the designated beneficiaries. The court held that they would have only received the benefit as beneficiaries when there is no eligible spouse. Mrs. Carrigan appealed.
The Court of Appeal allowed the appeal in a two-one decision written by Justice Juriansz (Justice Epstein concurred and Justice LaForme dissented). In reaching its decision, the Court completed a statutory interpretation of section 48 of the Pension Benefits Act which provides that a “spouse” of a member of a pension plan on the date of death is entitled to the pension death benefit. However, section 48(3) provides that no payment will be made “where the member or former member and his or her spouse are living separate and apart on the date of death”.
The Court held that assuming that both Mrs. Carrigan and Ms. Quinn met the statutory definition of “spouse”, s. 48(3) would apply in these circumstances as Mrs. Carrigan was “living separate and apart” from Mr. Carrigan at the date of death. Once s. 48(3) was triggered, s.48(1) which entitles a “spouse” to the death benefit, did not apply, full stop. If s.48(1) was rendered inapplicable, Ms. Quinn would not be entitled to the death benefit, even though she was also a “spouse” as defined in the Pension Benefits Act, and even though she was not living separate and apart from Mr. Carrigan. The Court then went on to find that as there was no spousal entitlement, Mr. Carrigan’s designated beneficiaries, Mrs. Carrigan and his daughters, were entitled to the death benefit under s.48(6) of the Pension Benefits Act.
However, in dissenting reasons, Justice LaForme held that the Act does not stop a person from effectively having two spouses with equal rights of entitlement to the death benefit. He also held that the Act clearly favours whichever spouse (whether married or common-law) was living with the pension-holder on the date of death. He would have dismissed the appeal.
The majority decision seems to have made new law which provides that a common-law spouse’s entitlement to a pension member’s death benefit will be denied whenever that member has a previous legally married spouse who the member was separated from but never divorced. This decision will result in more death benefits going to the person or persons designated as beneficiaries than to spouses, in these circumstances.