Mahmoud Mohammad stormed an El-Al plane in 1968, threw grenades and was convicted of manslaughter. His buddies in the PLO stormed another El Al plane in order to get some negotiating leverage to force the authorities to release Mahmoud Mohammad and –of course- give him a pardon. (O’Brien para 3)
According to the motion judge (Shaun O’Brien J.) it was no part of Mahmoud Mohammad’s ‘duty of good faith’ to tell the life insurer such immaterial facts as those above. (O’Brien para 29).
According to O’Brien J., throwing a few grenades, killing the odd innocent passenger, being convicted of manslaughter, being important enough in your ‘organization’ that the top dogs will storm another plane to get you a pardon – well all that is immaterial to the question of life insurance, isn’t it. It was ‘twenty years earlier’ insists O’Brien J. (para 37)
It’s very much the same as the person who is in financial difficulty not telling the home- insurer that they are in financial difficulty. (O’Brien para 33)
The Court of Appeal said No!
Drawing upon the Insurance Act s. 183(1)
An applicant for insurance and a person whose life is to be insured shall each disclose to the insurer in the application, on a medical examination, if any, and in any written statements or answers furnished as evidence of insurability, every fact within the person’s knowledge that is material to the insurance and is not so disclosed by the other.
The court determined that Mahmoud Mohammad’s past conduct was relevant to this application for life insurance. This was a failure to reveal a material fact (para 12) which further constituted fraud (para 13).
Comment #1: the ‘duty of good faith’ has been a topic of ‘renovation’ at the supreme court of Canada in Bhasin v. Hrynew. Having destabilized general contract law with its renovation project, it is unlikely that the SCC will see Mahmoud Mohammad as the poster-boy for more duty of good faith renovation. In other words, it’s probably safe to say that you can’t throw grenades and not tell the insurer.
Comment #2: When the Canadian authorities tried to deport Mahmoud Mohammad in 1988, he asserted a ‘refugee’ claim – which claim succeeded in keeping him in Canada until 2013 when he was finally deported. The Court of Appeal used Mahmoud Mohammad refugee claim (of ‘threat to his life’) as evidence that he had not properly informed the insurer of facts material to risks to his life.
