Rochester v Arthur et Al

• Jurisdiction: Barbados
• Court: High Court (Barbados)
• Judge: Chase, J.
• Judgment Date: 19 September 1989
• Neutral Citation: BB 1989 HC 64
• Docket Number: No. 1279 of 1987
• Date: 19 September 1989

High Court. (Civil Jurisdiction)

Chase, J.

No. 1279 of 1987

Rochester

and

Arthur et al

Appearances:

Dr. R.L. Cheltenham and Mr. P. K. H. Cheltenham for the plaintiff.

Mr. H.H. Arthur for the first defendant.

Mr. E.E. Alleyne and Miss M. Reifer for the second defendant.

Insurance - Life insurance policy — Two insurance policies taken out by deceased — Mother named as ‘beneficiary’ in policies — Whether on construction of policy a trust was created in favour of mother or whether plaintiff entitled as administratrix of estate on behalf of deceased's infant son.

Chase, J.

1 This is an application by the plaintiff as administratrix of the estate of Elroy Scantlebury and as mother and next friend of the infant Dwayne Rochester for:

• (a) a declaration that the estate of Elroy Scantlebury deceased is beneficially entitled to the proceeds of two insurance policies being Nos. 3085466 and 4147394 taken out by and issued to the deceased by American Life Insurance Co.;

• (b) an order that the proceeds of the said policies be paid to the plaintiff;

• (c) such further order as may be necessary or appropriate in respect of the interests of Dwayne Rochester, the surviving son and sole beneficiary of the estate of the deceased Elroy Scantlebury.

2 In her affidavit in reply, the first defendant makes an application for the following orders pursuant to Order 80, rule 2 of the Rules of the Supreme Court:

• (a) that the Letters of Administration granted on June 5, 1984 and issued on June 19, 1984 to the plaintiff be revoked;

• (b) that the Letters of Administration to the Estate of Elroy Scantlebury deceased, be granted to the first defendant;

• (c) a declaration that the proceeds of the policies of insurance No. 3085466 and 4147394 held with the American Life Insurance Company are held in trust for the estate of Gwendolyn Scantlebury, deceased;

• (d) such order under Order 80, rule 2(b) as the court seems just.

3 The circumstances that give rise to these applications as disclosed by the affidavit evidence and the supporting documents annexed to the affidavits of the plaintiff and first defendant are as follows:

“On February 11, 1983, Elroy Scantlebury died by drowning. At the time of his death, the deceased left surviving him an infant son born out of wedlock on May 1, 1977 and Gwendolyn Scantlebury, his mother, who subsequently died intestate on May 20, 1984.

At the time of the death, the deceased was the holder of three insurance policies, the particulars of which and proceeds payable on death, are as follows:

Insurer	Policy	Amount Payable
1. Manufacturers Life Insurance Co.	24357352	$30,000
2. American Life Insurance Co.	3085466	$16,000
3. American Life Insurance Co.	4147394	$59,079.30

4 The policy with manufacturers Life Insurance Company was issued on June 26, 1975 and those with American Life Insurance Company on July 14, 1976 and September 4, 1981 respectively. In each of the policies Gwendolyn Scantlebury the mother of the deceased was named beneficiary subject to the policy holder's right at any time to change the named beneficiary.

5 On June 5, 1984, the plaintiff's application for the grant of Letters of Administration in respect of the estate of the deceased Elroy Scantlebury who died intestate was approved and issued on June 19, 1984.

6 On July 4, 1985, the grant of Letters of Administration to the estate of Gwendolyn Scantlebury was issued to the first defendant.

7 With these grants in hand, both the plaintiff and first defendant sought to claim the proceeds of the insurance policies for the benefit of the separate estates from the Insurers of the deceased Elroy Scantlebury.

8 As regards the plaintiff's claim against Manufacturers Life Insurance Company on behalf of the estate of Elroy Scantlebury for the benefit of Dwayne Rochester whom the deceased during his lifetime maintained by an order of the court, this was met by a clause in the general provisions of the policy document under the heading “Beneficiary”. The clause states that:

“Whenever a beneficiary is designated either in this policy or by a declaration in writing by the owner, such beneficiary will be deemed to be beneficially entitled to the proceeds of the policy, if and when the policy becomes payable upon the life insured's death, and a trust will be thereby erected in favour of such beneficiary and of such other beneficiary or beneficiaries as the owner may appoint from time to time by a like declaration.”

9 On the basis of the wording of this beneficiary designation clause, Manufacturer's Life Insurance Company took the view that a trust was unequivocally created in favour of the named beneficiary, Gwendolyn Scantlebury, and that the policy proceeds accrued for the benefit of the estate of Gwendolyn Scantlebury. The company accordingly paid the policy proceeds to the estate of the named beneficiary.

10 Manufacturer's Life Insurance Company's view on the legal effect of the beneficiary designation clause is not the subject of a challenge in this court and it would therefore seem that the plaintiff's attorneys have accepted the company's view and action in the disposition of the policy proceeds as being incontestable in the circumstances.

11 In the case of the American Life Insurance Company Ltd. (Alico), the second defendant, the situation is different. When confronted with the competing claims of the plaintiff and first defendant each in their representative capacities, the second defendant company paid the proceeds of the two insurance policies into court.

12 The issue which now has to be determined by this court on the foregoing facts and circumstances is whether the estate of the deceased Elroy Scantlebury or that of the deceased Gwendolyn Scantlebury is entitled to the proceeds of the two policies taken out on the life of Elroy Scantlebury with Gwendolyn Scantlebury being named as beneficiary.

13 A resolution of this issue would seem to be in the true construction of the language constituting the relevant terms and conditions of the two policies issued to the insured Elroy Scantlebury by the second defendant company.

14 An examination of the two policy documents (Exhibit J.R. 3 and J.R. 4) reveals as regards Policy No. 3885466, certain features in the following terms:

“American Life Insurance Company, Wilmington

Delaware, U.S.A.

AGREES TO PAY

The benefits provided for under this policy (a) to the owner of the insured living on the Maturity Date, upon surrender of his policy, or (b) to the Beneficiary if the insured dies prior to the maturity date, upon surrender of this policy and receipt of due proof of such death, subject to the terms and conditions hereof.

BENEFICIARY: As stated in the application for this policy.

THE BENEFITS, provisions and conditions set forth on the following pages are a part of this contract.”

15 Under Clause 15 designated “Beneficiary” in the proposal form, the words “Gwendolyn Anesta Scantlebury — Age 62 — mother” are inserted to complete this section of the policy document and the following clause appears as part of that section:

“Except as otherwise directed

(A) the proceeds...