The insured obtained a life insurance policy that was backdated to September 26, 1980, to secure lower premiums, though the initial premium was paid on November 14, 1980.
The policy contained a two-year suicide exclusion clause.
In early 1981, the coverage was increased from $500,000 to $1,000,000.
The insured committed suicide on October 20, 1982.
The insurer refused to pay, arguing the suicide occurred within the two-year exclusion period.
The Supreme Court of Canada held that the backdating of the policy meant the insurance contract came into effect retroactively on September 26, 1980, making the suicide fall outside the two-year exclusion period.
The Court also held that the increase in coverage was merely a variation of the existing contract, not a new contract, so no new exclusion period began.
The insurer was ordered to pay the full $1,000,000.
