In a ruling that drew fierce criticism, the Ontario Court of Appeal on Tuesday awarded the insurance money to the man on the grounds he was insane when he battered and stabbed his wife to death and therefore was not criminally responsible.
However, the court put its order on hold for 30 days to allow the province to file a forfeiture application under the Civil Remedies Act.
"We will be bringing a civil-remedies application," said Elaine Flis, a spokeswoman for Attorney General John Gerretsen.
"As always, it is a key mandate of (the act) to assist victims and prevent unlawful activities that lead to victimization."
Under the Civil Remedies Act, enacted by the legislature in 2002, the attorney general can ask the courts to have "proceeds of unlawful activity" forfeited to the government.
The act specifically does not exempt a person found not criminally responsible on account of mental disorder.
To effect the forfeiture, Gerretsen will have to show the courts that the seizure is "in the interests of justice."
The courts can turn down the government's request if they decide it would not serve justice to grant it.
In June 2006, Ved Parkash Dhingra hit his estranged wife Kamlesh Kumari Dhingra several times on the head with a white marble religious statue at her home in Richmond Hill, Ont. He then stabbed her 24 times in the neck and body.
He was tried for second-degree murder but was found not criminally responsible in 2008 on account of mental disorder. He was later granted a conditional discharge.
While common-law rules prevent criminals from cashing in on their crimes, the appellate justices decided Dhingra could not be considered a criminal because of his mental condition, and hence was entitled to the insurance money.
Many commenting on online news sites criticized the ruling as out of touch, or a slap in the face of victims.
A relative few, however, backed the decision as proper application of the law, which is designed to treat those with psychiatric disorders differently from intentional criminals.