Macaura v. Northern Assurance Co Ltd
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''Macaura v Northern Assurance Co Ltd'' 925AC 619 appeared before the
House of Lords The House of Lords, also known as the House of Peers, is the upper house of the Parliament of the United Kingdom. Membership is by appointment, heredity or official function. Like the House of Commons, it meets in the Palace of Westminste ...
concerning the principle of
lifting the corporate veil Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is ...
. Unusually, the request to do so was in this case made by the corporation's owner.


Facts

Mr Macaura owned the Killymoon estate in
County Tyrone County Tyrone (; ) is one of the six counties of Northern Ireland, one of the nine counties of Ulster and one of the thirty-two traditional counties of Ireland. It is no longer used as an administrative division for local government but retai ...
,
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
. He sold the timber there to Irish Canadian Sawmills Ltd for 42,000 fully paid up £1 shares, making him the whole owner (with nominees). Mr Macaura was also an unsecured creditor for £19,000. He got
insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
policies - but in his own name, not the company's - with Northern Assurance covering for
fire Fire is the rapid oxidation of a material (the fuel) in the exothermic chemical process of combustion, releasing heat, light, and various reaction products. At a certain point in the combustion reaction, called the ignition point, flames a ...
. Two weeks later, there was a fire. Northern Assurance refused to pay up because the timber was owned by the company, and that because the company was a separate legal entity, it did not need to pay Mr Macaura any money.


Judgment

The House of Lords held insurers were not liable on the contract, since the timber that perished in the fire did not belong to Mr Macaura, who held the insurance policy.
Lord Buckmaster Stanley Owen Buckmaster, 1st Viscount Buckmaster, (9 January 1861 – 5 December 1934) was a British lawyer and Liberal Party politician. He was a Member of Parliament (MP) for most of the years from 1906 to 1915, when he was elevated to the pe ...
gave the first judgment, holding in favour of the insurance companies. Lord Atkinson concurred. Lord Sumner concurred and said the following. 925AC 619, 630 Lord Wrenbury and Phillimore concurred.


See also

*''
Kosmopoulos v Constitution Insurance Co of Canada ''Kosmopoulos v Constitution Insurance Co of Canada'' is a leading Supreme Court of Canada decision on the court's ability to pierce the corporate veil—to impose an interest or liability, that is, upon the shareholders of a company instead of the ...
'' [1987
1 SCR 2
*''Attorney General of Belize v Belize Telecom Ltd'' *''Lee v Lee’s Air Farming'' [1961] AC 12


Notes

{{UK law English tort case law United Kingdom company case law House of Lords cases United Kingdom corporate personality case law 1925 in case law 1925 in British law