CONFUSED STATUTE

Hawke's Bay Tribune, Volume XXV, Issue 158, 20 June 1935, Page 7

CONFUSED STATUTE

INSURANCE PROTECTION Mortgages and Life Policy IMPORTANT APPEAL CASE (By Telegraph—Press Association.! WELLINGTON, go. Questions of great iuiporuuv* to insurance companies and the financing portion of the community were raised in tho action of John Edwaid Wheeler and Aubrey Counsell Stephens, of Dunedin, against tho Bank of Australasia, Alice Alay Aingo and others, which is being heard in the Court ui Appeal to-day. Hie plaintiffs are tbe executors of the will of John Albert Ainge, nho died in March, 1932, leaving an estate which shows a deficiency oi assets of sumo £9BOl. Included iu tho assets were six policies of file insurance taken out yilh the National .Mutual Life Association which tho testator on 38 di tierent occasions had mortgaged to tbe association to secure advances, but which nevertheless showed on his death a act balance of £5726 Tch plain tills in tbe course of then administration being uncertain as to tbe extent of the protection afforded by the Life Insurance Acts, took out an originating summons asking for the decision of tho Supremo Court on the following questions: (1) AVhether the protection afforded policy moneys against debts and legacies by section 65 anu G 6 of the Life Insurance Act, 1908, as amended iu 1925, applies iu tho case of moneys payable under policies mortgaged iu this manner; (2) if such protection does exist, then in whose favour does it apply, and does it apply against debts ow*ing by the testator under mortgages; (3) with regard to the rights of election arising under these sections, who is entitled to exercise the right, and with! nwhat period must it be exercised? In view of the importance of these questions, tho summons has been moved into the Court of Appeal. Air. A. C. Stephens appeared for the plaintiflis. Air. Mowat for the Bank of Australasia, representing the general body of creditors, and Air. J. Al. Paterson for other people interested under the will. Mr Stephens submitted that the deceased was a policy-holder within the meaning of the statute at the date of his death, notwithstanding mortgages, so that the protection up to £2OOO and bonuses provided *n the sections mentioned applied, Tho Chief Justice, Sir Michael Myers, said that iu a case before the Court of Appeal last year a question which involved every soul in New Zealand, and which was one of the utmost importance, was raised. All the judges who heard thet case had thought and stated that the condition of the Life Insurance Acts necessitated further elucidation by legislation, but nothing had been done. The position was, indeed, very serious, and the Court had done’its best to bring the matter to the notice of those to whom such matters should be pointed out. Air Stevens said that a decision by the Court that protection applied against mortgages would cause incalculable effects throughout the community and would be contrary to tho view taken by insurance companies and the legal profession since the enactment was first passed. Dealing with the question of election under section 6G Air Stephens pointed out that tho section provided that election must he exercised with “the time aforesaid,” but there was no time aforeeaid fixed in the Act. The Chief Justice: This is the kind of statute where the greatest clarity is required; but instead, we find the utmost confusion. Mr Alowat submitted that by virtue of the mortgages insurance companies, and not tho deceased, were the policy, holder at the date of death. (Proceeding.)