TEST CASE HEARD.

Ashburton Guardian, Volume 59, Issue 46, 3 December 1938, Page 7

TEST CASE HEARD.

PUBLIC MUTUAL INSURANCE. MEMBERSHIP QF COMPANY ISSUE. (Per Press Association.) AUCKLAND, Dec. 2. What was described by counsel as a test case in which many people were interested was brought before -..r Justice Blair in the Supreme Court when the Public. Mutual Insurance Company of New Zealand, through its liquidator, Joyce William Hyland, claimed £26 5s and costs from Walter Harold Hunter, a taxi proprietor, of Auckland. The statement of claim said that every person desirous of becoming a member of the company had to sign an application to that effect, or for a policy of insurance. The granting of a policy was sufficient proof of membership. The defendant had on June 7, 1937, satisfied both those requirements. The policy was granted to him, and subsequently renewed for a period expiring on June. 7, 1939. On August 11, 1938, the directors made a. levy upon all members of two and a half times their current annual premiums, to be paid on September 16 last. Hunter’s levy was not paid. j ,, . The statement of defence denied all knowledge of the decision on Septem-ber-23. 1038, to- wincl'iip the company, or that, the .defendant-dodged an appliIt was’ admitted that he took 'out an insurance cover with the company last year, and renewed it for a further period, but he denied that he was entered as a member of the company „ or, that he had knowledge of-the 'decjsion to make a levy upon members. It was denied that Hunter was_ lawfully liable for the Tevy”or£26 5s made upon him; Action Taken as Test Case. Mr Richmond,' for the plaintiff, said that the action had been taken as. a test case. The real matter at issuewas whether the defendant wa& a, member or had been a member of the plaintiff company. The action had arisen because the - defendant argued that there • never was in effect ally register of member's, and that he never was entered upon any register of the company. “That matter, of course, affects all other persons who are alleged to be members of the company, excepting those persons who signed the memorandum of association, and those who may still be members'. If the defendant is not and never has been a member of the* company, the result would he that at the meeting on September 23, 1938, at which members or those who purported to be members, passed a resolution to go into liquidation, there would not be a quorum. If that is the position, the company is not ii: liquidation, and the gentleman who purports to be liquidator would not be the liquidator.” 1 Large Amount Involve.

There was a very large amount involved, counsel said. The liability of all persons who were proven to he members was, of course, unlimited. There was a debenture of £23,700. There were claims against the company in respect of policies and other creditors. The levy made by the directors before the company . went into liquidation was sufficient to produce £90,000 assuming that, all the members paid or were capable of paying. The net amount required from members w.as £40,000.

Douglas Arthur Young said that at the beginning of August, 1938, he was appointed general manager of the company. He had not been able to find any hook labelled or titled “register of members.” The defendant, lie said, signed a. proposal form,, and an entry was made in the proposal hook. The form was bound with others, and a: card was included in a system of indices which gttve particulars about insured persons wlio-elaipied to be' members. Cross-examined by Mr A. H.'Johnstone, K.C.;, for the defendant, witness admitted that at no time would the renewals register 'show a full list of members of the company. There was no book ..to. show membership, wlffin members became members, or wheii they ceased to’ be members of the company.

That concluded the evidence for the plaintiff. ", •. Mr Johnstone, opening for the defence, said that it.\vas submitted that the defendant was ‘not'liable for the, sum claimed because he was not and never had been a member 01. the-com-pany according fro Section 38 of the Companies Act, 1933, It was laid down that at member was wife - who had agreed to membership:, and whose name was entered on the company’s register of memhef-s. 'The, second condition of membership was never fulfilled in Hunter’s case,-heeausie. it was submitted'that. there whs'never a register. The hearing was adjourned .jiUptil Monday.