The respondent, a sole shareholder and director of a leather goods company, insured the company's assets under his own name.
A fire destroyed the assets, and the insurers refused to pay, arguing that as a shareholder, he had no legally enforceable insurable interest in the corporate assets, relying on the Macaura principle.
The Supreme Court of Canada dismissed the insurers' appeal, overruling Macaura and adopting the factual expectancy test.
The Court held that an insured has an insurable interest if they have a moral certainty of advantage or benefit from the property's existence and prejudice from its destruction.
