Failure by an insured to disclose that she underwent chest x-rays for an enlarged heart resulted in a denial of life insurance benefits

Ms. Quinn died of a heart attack.  She had life insurance policy with Canada Life Assurance Co.  Her husband was denied recovery of benefits by Canada Life because his wife failed to disclose material facts in her application which would have resulted in it refusing to issue the policy.   Specifically when asked if she had had an x-ray within the last five years in her application she did not disclose that she had had a chest x-ray for an enlarged heart.  Mr. Quinn brought an application to compel Canada Life to pay benefits under the life insurance policy.  He was awarded $150,000 at trial, but the Court of Appeal overturned the award ruling that the policy was voided by Ms. Quinn’s failure to disclose the chest x-ray.

Quinn v. Canada Life Assurance Co., [2006] B.C.J. No. 3271, the British Columbia Court of Appeal, December 21, 2006

This was an appeal by the Insurer, Canada Life Assurance Co. from a Trial Court decision in which it was held liable to pay Mr. Quinn, the husband of the Insured, $150,000 as the beneficiary of a life insurance policy for his deceased wife. The Insurer argued that the Insured failed to disclose material facts in her application which would have resulted in it refusing to issue the policy.

The issue was whether inclusion of the words “other than above” in the questions asked of the Insured were either ambiguous or misleading and, if either, whether, in view of the questions, the Insured could be said to have adequately responded to them. On the application form, the Insured had been asked whether she had been treated for any known indication of abnormal blood pressure and in a subsequent question, had been asked, “other than above, have you within the past 5 years: had an x-ray?”. The trial judge noted that the Insured failed to advise that she had been treated for her enlarged heart by having chest x-rays conducted. The Insured ultimately died of heart disease.

The Court of Appeal found no ambiguity in the words, “other than the above” and noted that it is not the function of courts, when construing a document, to search for an ambiguity. Here, it was clear that the words used were intended to shorten the application process by eliminating repetition. That is, if there had been disclosure in an earlier section of the application, then the same information did not have to be repeated. As this had not been done by the Insured, the application was inadequately completed, the appeal was allowed, the Supreme Court Order set aside, and the action dismissed.

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