MUST £10,000 BE DEPOSITED?

Dominion, Volume 5, Issue 1425, 27 April 1912, Page 13

MUST £10,000 BE DEPOSITED?

INSURANCE CASE. CONDITIONS OF OPEN POLICY. A deposit of ,£IO,OOO is tho subject of contention in a case which is at present before the Court of Appeal. It has been brought for the purpose of determining whether certain of Lloyd's underwriters were carrying on the business of insurance in Now Zealand (through the agency of Italgety and Co., Ltd.), iu such manner as to bring them within the scopo of Part 111 .of tiie l'oreign Insurance Companies' Deposits Act, WOS. por tho hearing of the appeal, tho Court comprises tho Chief Justice (Sir Robert Stout), Mr. Justice Williams, JVlr. Justico Ivcnnistun, and Air. Justice Cooper. The parties aro JJa.goty and Co., Ltd., a company incorporated in England, but carryiug on business iu New Zoauuid (appellants), and the Solicitor-General (respondent). The Original Action. In the original action heard iu tho Supreme Court before Mr. Justice Sim, the i'acts had been agreed upon ami committed to writing. In November, 1909, Dalgety and Company entered into an agreement with certain of Lloyd's underwriters with rcspcct to the insurance of motor-cars against fire, theft, and accidental damage. According to the recognised usage of Lloyd's Underwriters, on which basis tho contract was made, tho contract of insurance contemplated that tho underwriters should issue an open policy in favour of Dalgety and Co. (a) Describing the subject of tho insurance in general terms, and leaving the particular property to bo covered from time, to timo defined by subsequent declaration. (b) Containing a provision authorising Dalgety and Co. to issue certificates, agreeing that such certificates should represent the declaration on the original policy, and conveying all tho rights of the original holder of tho policy. In practico, however, no such open policy was actually issued by tho undeiwritcrs to Dalgety and Co., but there was a contract embodying the terms of tho policy. In pursuance of tlie agreement, Dalgety and Co. lias established as part of its business iu New Zealand the practice of receiving proposals for tho insurance of'motor-cars, and also declared its own properties under tho provisions of the insurance contract.

The insurance so constituted took effoct from the date of the certificates ot insurance, and before any communicatnn was luado to Lloyd's underwriters, Dalgety and Co. paid a proportion of the premium received to the underwriters and retained the residue. At regular intervals the company transmitted to the representatives of the underwriters in London copics of all proposals and certificates received and issued by the company. All claims under tho insurances clfectcd were settled by the company and reimbursed by the underwriters. It was contended by the Solicitor-General that the underwriters were carrying on the business of insurance in New Zealand, through Dalgf ty and Co. an their agents, and that a deposit of .£IO,OOO should therefore lie made by the underwriters in accordance with Part 111 of the foreign Insurance Companies' Deposits Act, 1908. No such deposit had been made. In the alternative it was contended that the business of insurance was curried on in New Zealand by Dalgety and Co., and they should therefore pay tho deposit. I'or Dalgety and Co. it was argued that any such deposit was unnecessary 011 tho ground that neither they nor the underwriters were carrying on the business of insurance in New Zealand. His Honour, in (riving judgment, said that the case depended 011 the meaning of tho agreement made by Dalgety and Co. with Hie underwriters in November, l'JO!), and on tho legal effect of what is done by Dalgetv and Co. under that agreement. Aftor referring to tho terms of the agreement and the ditfereut classes of goods covered under tho open policy, his Honour continued, "Tho question between the parties is as to the effect of the issue of such a certificate in conncction with goods for which Dalgety and Co. have orders to insure. It appears from tho case that Dalgety and Co. had established as part of its business the practice of receiving from its clients and from members of tho public proposals for the insurance, under this open policy, of motor-cars against fire, theft, and accidental damage. The acceptance of such a proposal is effected by the issue by Dalgety and Co. to the owaevs of the particular car of a certificate ef insurance in the form set out in tho case. Tho question is as to the legal effect of such n transaction. Does it, as contended by the Solicitor-General, establish a_ contractual relation between the underwriters and the owner of the motor-car? Or docs it, ns contended by Mr. Skerrelt, operate merely to transfer to such owner a part of the insurance effected by Dalgety and Co. with tho underwriters? It seems to me that the effect of the transaction is ta' establish a contractual rotation between the underwriters and tho owner of the car." His Honour did not know of any case decided in England or Now Zealand that bore directly on the. question, but according to an American case quoted in "Joyce oil' Insurance," it appeared to have been decided that the issue of a certificate under an open policy created a contract of insnranco between the company and the person to whoip it was issued. "In my opinion, therefore," concluded his Honour, "the underwriters are carrying on tho business of insurance in New Zealand,' through the agency of Dalgety and Co., and are liable to make the deposit under Part TIT of tho Foreign Insurance Companies' Deposits Act, 1908." The Solicitor-General was allowed >£10 10s. costs on tho summons.

The Appeal. It is from tliis decision that Dalgety anil Co., Ltd., are now appealing, on the ground that it is erroneous in law. Mr. C. P. Skerrett, K.C., with Mr. C. B. Morison, is appearing for tho ap-nellaut-j. and tho Solicitor-General (Mr. J. W. Salmond) is appearing in person. Lenal argument had not concluded last evening, when the Court adjourned until 10.30 a.m. on Monday. MIRAMAR, LTD. THE ARGUMENT CONCLUDED. Legal argument was concluded in the Court of Appeal yesterday, in the case in connection with the aii'airs of Miramar, Ltd., and the Miramar Athletic Park anil Wonderland Company. The Court comprised the Chief Justice (Sir Robert Stout), Mr. Justice Denniston, Mr. Justice Cooper, and Mr. Justice Chapman. The parties were lleathcote Beet ham Williams, Dudley Bruce Hill, and Arthur Spry Gwavas Carlyon, all of Uawke's Bay, appellants, and Miramar, Ltd., of Wellington, respondent. Mr. C. P. Skerrett, Iv.C., with him Mr. C. B. Morison, appeared for the appellants, anil Mr. 11. I). Bell, K.C., with him Air. C. 11. Treadwell, for the respondents. Particulars of tho original action were published on Thursday. The appeal was from a decision of Mr. Justice Kdwards, delivered ill Wellington 011 October 17 last. The Court reserved decision.