Macaura v Northern Assurance Co Ltd [1925]

Macaura v Northern Assurance Co Ltd [1925] AC 619 dealt with the principle of lifting the corporate veil, a legal concept that separates a company's legal identity from that of its owners. In an unusual twist, the request to lift the corporate veil was made by the owner of the corporation himself.

Mr Macaura owned the Killymoon estate in County Tyrone, Northern Ireland, and sold the timber on the estate to Irish Canadian Sawmills Ltd. In exchange, he received 42,000 fully paid-up £1 shares in the company, making him the sole owner through nominees. Additionally, Mr Macaura became an unsecured creditor for £19,000. Subsequently, he obtained insurance policies from Northern Assurance, covering the timber against fire. However, the policies were taken out in Mr Macaura's name, not the company's.

Shortly after the insurance arrangement, a fire occurred, leading to a claim under the insurance policies. Northern Assurance refused to pay, contending that the timber belonged to the company, and as a separate legal entity, the company's owner, Mr Macaura, could not claim any compensation.

The House of Lords ruled against Mr Macaura, holding that the insurers were not liable under the contract. Lord Buckmaster delivered the primary judgment, supporting the insurers. Lord Atkinson concurred with this decision. Lord Sumner, in his concurrence, emphasised that Mr Macaura had no insurable interest in the timber because it did not belong to him. Despite owning almost all the shares in the company and the company owing him money, Mr Macaura could not insure the company's assets. Lord Sumner stressed that Mr Macaura's relation was to the company, not its goods, and therefore, he had no "concern in" the subject insured.

Lord Wrenbury and Phillimore also concurred with the judgment. The case reaffirmed the legal principle that the owner of a company is distinct from the company itself, and insurance policies should reflect the actual ownership of the insured assets. The judgment highlighted the importance of maintaining the separation between an individual's personal interests and those of a corporate entity.
Back to blog

UOL Case Bank

Upon joining, you become a valuable UOL student and gain instant access to over 2,100 case summaries. UOL Case Bank is constantly expanding. Speed up your revision with us now.

Subscribe Now

Where are our students from?

Yale University
Council of Europe
Baker Mckenzie 
University of Chicago
Columbia University
New York University
University of Michigan 
INSEAD
University College London (UCL)
London School of Economics (LSE)
King’s College London (KCL)
University of London
University of Manchester
University of Zurich
University of York
Brandeis University
University of Exeter
University of Sheffield
Boston University
University of Washington
University of Leeds
University of Law
Royal Holloway, University of London 
Birkbeck, University of London
SOAS, University of London
University of Kent
University of Hull
Queen’s University Belfast
Toronto Metropolitan University
Hong Kong University of Science and Technology
University of Buckingham

  • Criminal Practice

    Diagrams and Charts

    Our carefully designed diagrams and charts will guide you through complex legal issues.

  • Criminal Law

    Clear and Succinct Definitions

    Key concepts are concisely defined to help you understand legal topics quickly.

  • Property Law

    Statutory Provisions

    Statutory provisions are provided side by side with legal concepts to help you swiftly locate the relevant legislation.

  • Public Law

    Case Summaries

    We have summarised important cases for you so that you don't need to read long and boring cases.

  • Evidence

    Rules and Exceptions

    Rules and exceptions are clearly listed so that you know when a rule applies and when it doesn't.

  • Company Law

    Terminology

    Legal terms and key concepts are explained at the beginning of each chapter to help you learn efficiently.

  • Case Law

    Case law is provided side by side with legal concepts so that you know how legal principles and precedents were established.

  • Law Exam Guide

    Law Essay Guide

    You will learn essential law exam skills and essay writing techniques that are not taught in class.

  • Law Exam Guide

    Problem Question Guide

    We will show you how to answer problem questions step by step to achieve first-class results.

  • Conflict of Laws

    Structured Explanations

    Complex legal concepts are broken down into concise and digestible bullet point explanations.

  • Legal System and Method

    Legal Research

    You will learn legal research techniques with our study guide and become a proficient legal researcher.

  • Jurisprudence and Legal Theory

    Exam-focused

    All essential concepts, principles, and case law are included so that you can answer exam questions quickly.