A person should not be allowed to profit from his or her own crime. This public policy rule has been in the common law for over a century; however, courts have usually dealt with individuals who either had or had not been convicted of committing the unlawful act. In a very recent decision, the Ontario Court of Appeal held that the public policy rule does not apply to individuals who, while having committed a crime, are not criminally responsible on account of mental disorder (NCR).
In Dhingra, the appellant and his wife separated in 1992. In 1998, the appellant took out a group life insurance policy where his wife was an insured and the appellant was the beneficiary. In 2006, the appellant killed his wife and in 2008, he was found NCR. During the trial, the respondent, acting on a Power of Attorney, submitted an Accidental Death Claim application claiming the proceeds of the insurance policy on behalf of the appellant. The insurer, Scotia Life, approved payment of the insurance proceeds to the appellant but did not immediately pay out the proceeds of the policy. After the criminal trial, the respondent, now acting as administrator of his mother’s estate, requested that the proceeds should be paid to the estate. Scotia Life brought an application and was granted an order to pay the proceeds of the policy into court. The appellant then brought an application to have the proceeds paid to him.
The application judge decided that the public policy rule was applicable and dismissed the appellant’s application to have the funds held in court paid out to him.
On appeal, however, Justice Rosenberg found that Nordstrom v. Baumann and Re Dreger both set out that the public policy rule does not prevent the person who is NCR from collecting under an insurance policy, and even found that “developments since 1976 have only strengthened the policy basis for making an exception for persons found not criminally responsible.” The basis is that a person found to be NCR is neither legally nor morally responsible for the act, thus eliminates the rationale for the public policy rule from being applicable.
His Honour went on to examined the effect that the Civil Remedies Act might have on the public policy rule, namely sections 1, 2, 3, and 17. It appears that Parliament allows for the forfeiture of proceeds of an offence committed by a person found NCR.
Justice Rosenberg held that while the common law entitles a person who is NCR to take under an insurance policy, the Civil Remedies Act entitles the Crown to forfeit such proceeds. However, such forfeiture is not automatic, as the Attorney General must bring an application and the court would then have to decide whether it would clearly not be in the interests of justice to forfeit the proceeds to the Crown.
In theory, then, it is very possible for a person found not criminally responsible on account of mental disorder to kill his or her spouse and collect under an insurance policy. Forfeiture rests on the Attorney General.
~Summary prepared by Jeffrey Petermann