Feinstat v. Feinstat – Child Support Payors and Life Insurance

This case is an appeal from an order requiring a husband to reinstate his life insurance policy and to designate his wife as a beneficiary thereof.

Background

The parties were married in 1982 and separated between 2001 and 2002. There are five children of the marriage, two of whom are considered special needs and who could require parental support for the rest of their lives.

In 2006, the husband was ordered to pay periodic child and spousal support. In 2007, the husband was ordered to designate the wife as a beneficiary in trust for the children of a life insurance policy with a value of $900,000. The said policy was intended to secure any outstanding support obligations that the husband might have in the event of his death.

Following the husband’s loss of employment in 2009, the court made a temporary order suspending the obligation to pay child and spousal support. After protracted litigation on the subject of life insurance, in January 2011, Justice Ferguson ordered that life insurance continued to be necessary to support the children who would require lifelong parental support.

Further, as the husband had pleaded that the policy in question was no longer even in existence, Justice Ferguson found him in contempt of court and ordered that he reinstate the policy in the amount of $400,000.

In August 2011, the husband was granted leave to appeal.

Analysis

The crux of the husband’s appeal was that Justice Ferguson erred by imposing an obligation to designate a life insurance policy at a time when he had no support obligation.

The Ontario Divisional court did not agree with the husband’s assertions in this regard. Rather, in its reasons, the court cited subsection 34(1) of the Family Law Act, which provides that pursuant to an application for an order of support, the court can make an order requiring a party to designate their spouse or child as the irrevocable beneficiary of a life insurance policy.

Instead, the court found that Justice Ferguson had erred in another respect. In particular, the court found that subsection 34(1) only provided jurisdiction to designate a beneficiary, but not to obtain life insurance or to reinstate a policy. As such, in requiring the husband to reinstate his policy in the amount of $400,000, the court found that Justice Ferguson had made an error of law.

In the result, the court allowed the husband’s appeal on the issue of the reinstatement of his life insurance.

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