Kosmopoulos v Constitution Insurance Co of Canada is a leading Supreme Court of Canada decision on the court's ability to pierce the corporate veil—to impose an interest or liability, that is, upon the shareholders of a company instead of the company itself. It was held that the veil can only be lifted where it would be "just and equitable", specifically to third parties. The case is also a leading source of insurance law. The insurer refused to indemnify Mr. Kosmopoulos on the grounds that the corporation owned the property, even though he was the sole-shareholder of the corporation. The insurer's position was consistent with the 1925 decision of the House of Lords in Macaura v Northern Assurance Co Ltd. Although the SCC rejected the plaintiffs corporate veil argument, and his bailee argument, the court did not uphold the Macaura rule. The ratio of this case is that an insured may recover an indemnity so long as they meet the factual expectancy test, regardless of whether they have bare legal title to the subject matter of the insurance contract. Background Mr. Kosmopoulos had a leather goods company for which he was the sole shareholder and director. His lease for the company office was under his own name from when he originally ran the business as a sole proprietor. The fire insurance policies showed the insured as being the sole proprietor even though the insurance agency was well aware of the fact that the business was being carried on by the incorporated company. (His insurance agency knew that he was under the lease as himself but carried on business as a corporation.) A fire in a neighbouring lot damaged his office; however, the insurance company refused to cover his damages. Under the common law, as established by Salomon v. Salomon, corporations are entirely separate entities from those who run it, and thus contracts made by the company cannot apply to anyone but the company itself. Business corporations are purely a creature of statute; there is no common law basis for the proposition that a corporation is a separate legal entity from that of its shareholder (that is, this paragraph questions part of the veracity of the preceding paragraph). Although Salomon v. Salomon is often cited as a reference for that proposition, the decision in Salomon v. Salomon was based on the clear language of the statute under which the corporation at issue