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This case was heard in the Court of Appeal regarding the interpretation of a Separation Agreement (“Agreement”) signed by Mr. DiDonato and his first wife, Ms. Didonato. The parties separated in July 1995, after a 26 year marriage.

Mr. Didonato’s second wife appealed the decisions commenced by two separate hearings in April 2005 (commenced by Ms. Didonato) and in March 2007 (commenced by Ms. Turner) which was collectively heard in April 2008 with respect to Ms. Didonato’s entitlement of life insurance proceeds based on the terms of the Separation Agreement.

As per the terms of the Agreement, Mr. Didonato was to pay Ms. Didonato spousal support until she reached 65 years of age. Further, the Agreement required Mr. Didonato to maintain a life insurance policy benefiting Ms. Didonato in the amount of $100,000.00 until he was no longer obligated to contribute to her support.

Mr. Didonato died at the age of 58, in 2004. His life insurance policy at the time however, was only $43,507.15, which is the amount Ms. Didonato received from the insurance company. This $43,507.15 payment was not enough to satisfy his $100,000.00 obligation as outlined in the Agreement.

In April 2005, Ms. Didonato commenced an Application against Mr. Didonato’s estate and his second wife, Ms. Turner, claiming a lump sum payment in the amount of $56,492.85 (i.e. the difference between $100, 00.00 and the amount she received from the insurance company). Ms. Didonato also sought an order for interim spousal support retroactive to December 2004, pending resolution of the matter. Justice Greer granted the interim support.

Subsequently, in March 2007, Ms. Turner commenced an Application for an order requiring Ms. Didonato to return to the estate the support payments she had received prior to Mr. Didonato’s death. Justice Low refused to grant this relief and ordered the trial of the issue. Ms. Turner and Ms. Didonato’s Applications were heard together in April 2008.

The trial judge examined the terms of the Agreement and interpreted the language of the Agreement. She concluded that Ms. Didonato was entitled to receive a total of $100,000.00 from the estate. The trial judge awarded Ms. Didonato $31,420.15, which was the $100,000.00 that Ms. Didonato was entitled to under the Agreement, minus the $43,507.15 she received from the insurance company, and minus the $25,071.91 she received pursuant to the order of Justice Greer.

In the Court of Appeal, Ms. Turner argued that the trial judge erred in her interpretation of the Agreement by failing to consider the Agreement as a whole. She believed that two parts of the Agreement (as outlined below) should have been read together, and if they had been then Mr. Didonato’s obligation would not extend beyond his obligation to pay Ms. Didonato support. The following provisions are relevant in the interpretation of the Agreement:

12 (4) “The husband shall maintain the policy and shall maintain each of the aforementioned as beneficiary as set out in paragraph 12(3) hereof as long as the husband is obligated to support such beneficiary as provided in this Agreement following which the husband may then deal with the applicable portion or portions of the policy as he wishes and the wife will then sign any document necessary to change or revoke the applicable designation or designations of beneficiary.”

12 (8) If the husband dies without his insurance in effect contrary to the Agreement, his obligation to contribute to the support of the wife and children shall be a first charge on his estate.

The trial judge interpreted Section 12 (4) as a standalone provision and the Court of Appeal agreed. Ms. Didonato was entitled to receive $31,420.94; the difference between what she would have received had Mr. Didonato fulfilled his obligation under the Agreement. Ms. Turner’s appeal was dismissed and Ms. Didonato was entitled to the costs of the Appeal.

This case demonstrates the importance of determining with your lawyer the intention of the life insurance clause stipulated in your Separation Agreement and whether it is meant to replace support payments entirely, or whether the life insurance is only security for support.