TEST CASE.

Auckland Star, Volume LXIX, Issue 286, 3 December 1938, Page 13

TEST CASE.

COMPANY'S AFFAIRS. CLAIM FOR A LEVY. i COUNSEL'S SUBMISSIONS. An action, which was described as a text case, was continued at the Supreme Court yesterday afternoon before Mr. Justice Fair. The plaintiff was the Public Mutual Insurance Company, acting by its liquidator, Joyce William Hyland (Messrs. Richmond and Havnes), and the defendant was Walter Harold Hunter, taxi-proprietor, Auckland (Messrs. Johnstone and Goldstine). The statement of claim set out 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, and that the granting of a policy was sufficient proof of membership. Defendant had on June 7, 1937, satisfied both those requirements. A policy was granted to him and subsequently renewed for the period expiring on June 7, 1035. On August 11, 1938, the directors made a levy on all members of two and a half times their current annual premiums to be paid on September 10 last. Hunter's levy was not paid. The statement of defence denied all knowledge of the decision of September 28, 1938, to wind up the company, or that the defendant lodged an application for membership. It 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 decision to make a levy upon members, It was denied that Hunter was lawfully liable for the levy of £20 5/ made upon him. Mr. Johnstone said that the name of a member should be on the register before he was properly constituted a member. The right of a ]>erson to vote would depend on whether his name was on the register, and the books submitted were the ordinary books of an insurance company. Card indexes were not a book. Mr. Johnstone went on to quote from a large number of legal authorities in support of his contention. Mr. Goldstine submitted that if defendant was not a member of the company then any claim based on contract must fail, because such contract was outside the powers of the company, and ultra vires. It was primarily a cooperative venture, and its name gave a clue to its business. The company was formed for mutual or co-operative insurance. Legal argument will be continued on Monday morning.