The appellant insurers issued an aviation insurance policy to a commercial air carrier.
The carrier misrepresented its accident record and the number of passenger seats on the aircraft.
The aircraft subsequently crashed, killing all passengers.
The families of the deceased passengers sought to recover from the insurers under a statutory right of action.
The Supreme Court of Canada held that the insurers were entitled to rely on the carrier's representation regarding the number of passenger seats.
Because the carrier violated this term, the policy was void ab initio against the carrier.
As the families' statutory right of action was subject to the same equities as the insurers could assert against the carrier, the families could not recover.
The appeal was allowed.
