SUPREME COURT.

Lyttelton Times, Volume CXVII, Issue 17329, 18 November 1916, Page 5

SUPREME COURT.

INSURANCE COMPANY'S ACTION. CLAIM FOR £231. His Honor Mr Justice Sim held a oivil session of the Supremo Court yesterday. 1 The New Zealand Insurance Company! Mr Alpers) claimed from Derek E. Thornton- (Mr Twyneham) and tho Tyueside Proprietary Ltd. (Mr Wright) the sum of £231 17s lid, excess .premiums duo under an insurance contract made to cover accidents to workers in tho Brunner coal mines, in tho control of defendants. Mr Alpers, in opening tho case for the plaintiff,, stated that there were two coal mines on the West Coast, one known as the Brunner mine and tho other as the NoTth Brunner mine. It •sraa the North Brunner mine that was concerned in the present proceedings. The North Brunner mine was at one time the property of tho North Brunner Coal Company, Ltd., which went into liquidation and was merged into the Brunner Oollieries, Ltd., an English company. Mr Derek Thornton arrived from England with power of attorney for the Brunner Collieries, Ltd. He niado arrangements with the Tyneside Company, vendors under a purchasing option, to work tho Brunner mine until the English company exercised its option of purchase. Brunner Collieries, Ltd., having exhausted its capital, and at tho time there being a strong demand for coal, it was agreed to reopen the mine at Stillwater, which the company had shut down in 1911. Arrangements were made for the Tyneside Company to find the capital for working the mine on a 5 per cent basis. The wages sheets for the Brunner arid North Brunner mines were made out every fortnight aud were sent to Wellington to the Tyneside Company, ufhich returned a cheque for the amount. The management of tho two mines by the Tyneside Company was the same, but Mr Thornton, as attorney of the English company, exercised certain rights as to direction of policy and watched tho interests of his principals. Mr Thornton, realising thatindemnity for workers in T he company’s employ was necessary, made representation to the New Zealand Insurance Company for a contract policy on behalf of his principals. The proEisal was submitted to Mr •>. D. vnoh, local director of the Tyueside Company, and received his approval. The policy was granted in due course and sent to Mr Thornton, and was sent on to tho head office of the Tyneside Company in 'Wellington. The policy provided for a premium according to wages paid, a certain sum being named. Tf the annual amount paid was less than that mentioned f he insurance company was to make a. refund of the amount, and on the other side, if the wages were in excess of the sum mentioned, tho company was to pay the excess. The wages paid during the year. June 5. 1012-13. amounted to £B7BI 18s 7d, and the excess insurance due by the mineowr.ers was £231 1< s lid. ‘The amount named for purposes of premium was £3OO and a cheque was sent to the plaintiff company for £l4. being a premium at the rate of 50s per centum. During the year the insurance company paid £72 Os 9d a.s compensation on thirteen accident claims.’ Tho money was in some cases paid directly to the men and in others to the Tyneside Company. The .position was that at- the close of the year, June 5, 1912-13. the mine companies concerned had paid £B7BI 18s 7d in wages, had paid, to the Now Zealand Insurance Company £l4 a.s on a £SOO wages basis, but no excess premium was paid as arranged, and the plaintiff company had also paid out £72 9s 9d for accident claims. After nine months’ work the arrangements as between the unine companies broke down and in April. 1913, a “ washing up” took place. The parties appeared to have overlooked the contingency of the New Zealand Insurance Company’s claim and no notice of it was taken in the washing up. Mr Alpers submitted, however, that the defendants were well aware of the contingency and the question really was as to which was liable for the amount claimed by the. insurance company. William Tsaac Boland, manager in Christchurch for the New Zealand Insurance Company, gave evidence verifying amounts claimed under policy No. 50,342 and paid on account of workers’ accidents to the representatives, of the Tyneside Company.

Fnsbery Maunse.il Nancarrdw said that in 1912 ho was secretary for the Brunner Collieries, Ltd., in Greymouth. The company had an option to purchase coal mines from the Tyneside Proprietary. He met Mr D. K. Thornton, attorney of the Brunner Collieries, Ltd., in May, 1912, and shortly after the Stillwater mine, which had been closed, was re-opened. Witness was the servant of the Brunner' Collieries, Ltd., and therefore watched the interests of that company. He did clerical work for the company, including the making up of pay sheets. The stationery and pay sheets were headed Brunner Collieries. Ltd. Witness sent- a copy of the pay shoets and also receipts signed by the mon to the Tyneside Company in Wellington. The operations were, carried on until late in 1913. Mr Thornton and he were the only two who derived their salaries from the English company. Witness gave details concerning general .arrangermen ts.

Mr Alpers stated that that was the ca.se for plaintiff. His Honor said he was not satisfied that, a prinm facie case had been made out and suggested that further evidence should be submitted. As the case stood he would on the evidence he justified in granting a nonsuit in the case of. one defendant and giving judgment for the second defendant. , Derek F,. Thornton, mining engineer by profession, but now a teacher of French at Christ's College Grammar School, stated that he was a. director of a London company which made arrangements to. purchase the Brunuer Mines. Witness arrived in New Zealand in 1912 with power of attorney on behalf of the company known as Brunner Collieries, Limited. The company's capital had become exhausted in making progress payments for purchase of the. North Brunner mine, and arrangements were made with the Tynosido Proprietary concerning the working of the mine. The Brunner Collieries—that, is, the Brunner and North Brunner mines—were to be worked by the Brunner Collieries, Limited, and the Tyneside Company was to finance the venture on the basis of being made selling agents for the coal and receiving 5 per cent on the gross output. He had seen Mr Pilcher, manager of the Tyneside Company, in Wellington, who bod agreed to and sanctioned the proposals and arrangements made. The Tyneside Company then financed the mine as arranged. He. had seen .Mr Pilcher also on the question of insurance of •he workers at the mines, and the policy was prepared. "Witness was clear that the Tyneside Proprietary was well aware that the policy was taken out on behalf of the Tynesicle Company, to " Inch the policy was sent Witness at no time paid* any moneys in respect to that policy. The Tyneside Company never repudiated his authority to sign the insurance proposal. Witness watched the working of the mines on behalf of his principals and gave directions as to general policy. Witness was -cross-examined at length by Mr Wright. Ernest Gregory Pilcher, managing director of the Tyneside Proprietary, gave evidence at length and was crossexamined by Mr Alpers. He repudiated the statement that there was any verbal arrangement that bis company was-to finance the working; of the

North Brunner mine. All that was done was to advance money for coal, which was to bo sold by the Tyneside Company, the company to recoup itself out of sales. Though tho insurance policy was kept in the office of the Tyneside Company and was made <rot in the name of the company, the Brunner Colleries, Ltd.’s representative, D. I). Thornton, had no authority from the Tyneside Proprietary to sign the policy. The policy was taken out by Thornton on behalf of Brunner Collieries, Ltd. The Tyneside Proprietary had never recognised the insurance policy as being connected with that company. Thornton had authorised payments not for the Tyneside Company, which paid the nccounts, but on behalf of Brunner Collieries. Ltd. Tho ultimate squaring would bo made through coal sales against advances for the coal. The advances were made for the purposes of mining tho coal. In answer to questions by his Honor, Pilcher stated that though certain matters were afterwards dealt with in an agreement, no verbal arrangements had previously boon made in regard to financing the working of ,tho North Brunner mine. The money was supplied as Thornton asked for it on behalf of the Brunner Collieries, Ltd., as advances for coal to bo won and suppliod. Evidence on behalf of the Tyneside Company was also given by Robert Allison, mining manager for the company, and by .Tames Daniel Lynch, of Greymouth, trading as Mark Sprqtt and Co., and a director of the Tyneside Proprietary. This closed tho defence for the Tyneside Company. His Honor agreed to continue the hearing of the case on the following day.'