Macaura v Northern Assurance Co Ltd

Macaura v Northern Assurance Co Ltd
Court House of Lords
Citation(s) [1925] AC 619
Judge(s) sitting Lord Sumner, Lord Buckmaster, Wrenbury, Atkinson and Phillimore concurred.

Macaura v Northern Assurance Co Ltd [1925] AC 619 appeared before the House Of Lords concerning the principle of lifting the corporate veil. Unusually, the request to do so was in this case made by the corporation's owner.

Contents

Facts

Mr Macaura owned the Killymoon estate in County Tyrone, Northern Ireland. 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 policies - but in his own name, not the company's - with Northern Assurance covering for fire. 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 Sumner said,

It was not his. It belonged to the Irish Canadian Sawmills Ltd, of Skibbereen, co Cork… He stood in no ‘legal or equitable relation to’ the timber at all… His relation was to the company, not to its goods, and after the fire he was directly prejudiced by the paucity of the company’s assets, not by the fire…

Lord Buckmaster, Wrenbury, Atkinson and Phillimore concurred.

See also

Notes