Kosmopoulos v. Constitution Insurance Co.

Kosmopoulos v. Constitution Insurance Co.

A sole shareholder may have an insurable interest in the corporation's assets when he demonstrates a factual expectancy of pecuniary benefit or prejudice from their preservation or destruction; the House of Lords' restrictive Macaura rule should not be followed in Ontario; on the facts Kosmopoulos had an insurable interest but the corporate veil was not lifted to convert corporate ownership into personal ownership.

Citation
[1987] 1 SCR 2
Parties
Appellants Cross‑respondents (defendants): Constitution Insurance Company of Canada; Simcoe & Erie General Insurance Company; Providence Washington Insurance Company; Security National Insurance Company; Upper Canada Insurance Company; Canadian Home Assurance Company; The Contingency Insurance Company Limited; Respondents Cross‑appellants (plaintiffs): Andreas Kosmopoulos; Kosmopoulos Leather Goods Limited; Cross‑respondents (defendants): Aristides Roussakis; Art Roussakis Insurance Agency Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
29 January 1987
Procedural Posture
Civil Appeal: Fire Insurance Claim / Appeal and Cross‑appeal to the Supreme Court of Canada (leave Granted)
Outcome
Appeal and cross‑appeal dismissed
Legal Topics
Insurable Interest, Corporate Personality, Lifting the Corporate Veil, Bailment, Indemnity, Policy Against Wagering
Source Language
English
Insurance Company Law Commercial Law Insurable Interest Corporate Personality Lifting the Corporate Veil Bailment Indemnity +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 18 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Constitution Insurance Company of Canada; Simcoe & Erie General Insurance Company; Providence Washington Insurance Company; Security National Insurance Company; Upper Canada Insurance Company; Canadian Home Assurance Company; The Contingency Insurance Company Limited

Appellants Cross‑respondents (defendants)

Andreas Kosmopoulos; Kosmopoulos Leather Goods Limited

Respondents Cross‑appellants (plaintiffs)

Aristides Roussakis; Art Roussakis Insurance Agency Limited

Cross‑respondents (defendants)

Procedural Posture

Civil Appeal: Fire Insurance Claim / Appeal and Cross‑appeal to the Supreme Court of Canada (leave Granted)

Legal Issues

  1. 1 Whether a sole shareholder has an insurable interest in the assets of the corporation
  2. 2 Whether the corporate veil should be lifted to treat corporate assets as the shareholder's for insurance purposes
  3. 3 Whether the shareholder could claim as bailee of corporate assets

Ratio Decidendi

A sole shareholder may have an insurable interest in the corporation's assets when he demonstrates a factual expectancy of pecuniary benefit or prejudice from their preservation or destruction; the House of Lords' restrictive Macaura rule should not be followed in Ontario; on the facts Kosmopoulos had an insurable interest but the corporate veil was not lifted to convert corporate ownership into personal ownership.

Court Disposition

Appeal and cross‑appeal dismissed

Orders

  • Appeal dismissed with costs to both respondents
  • Cross‑appeal dismissed; both respondents awarded their costs of the cross‑appeal