The insurer's position was consistent with the 1925 decision of the House of Lords in Macaura v Northern Assurance Co Ltd.

His lease for the company office was under his own name from when he originally ran the business as a sole proprietor.

The best that can be said is that the "separate entities" principle is not enforced when it would yield a result "too flagrantly opposed to justice, convenience or the interest of the Revenue".

The Court decided that in the current case, lifting the veil would unfairly allow the owner to enjoy the benefits of incorporation while avoiding the costs.

The court also rejected the owner's argument that he was a bailor (i.e., taking care) of the companies' assets.

In doing so, the court rejected the Macaura principle that limited an insurable interest to those having legal or equitable title to an asset.