CLAIM BY INSURANCE COMPANY

Nelson Evening Mail, Volume LXXII, 6 December 1938, Page 6

CLAIM BY INSURANCE COMPANY

HEARING OF TEST CASE CONCLUDES | DECISION RESERVED l (limed Hrea* Association 1 AUCKLAND. sth December. | The hearing of the test case brought iby the Public Mutual Insurance Company of New Zealand, through its liquidator, Joyce William Hyland for 1 £26 5s and costs from Walter Harold i Hunter, taxi proprietor, was concluded j before Mr Justice Fair in the Supreme j Court.' Legal argument was heard and at the close of the day his Honour reserved his decision. Mr Richmond apj peared for plaintiff and Mr A. H. John- ■ stone, K.C., for defendant. I According to Mr Richmond, the quesI tion at issue was whether Hunter was J a member of the company. He had satisfied the requirements for membership and taken out and subsequently renewed a policy on 11th August, 1938. The directors made a levy upon all members of two and a half times their current annual premium. Hunter did not pay his levy. His Honour said that from the consideration he had given the case, one factor which might be important was | that the creditors were persons directly and vitally interested to the extent of £40,000, and that the company or' shareholders who signed the memorandum of association would not be in a position to meet the whole of the creditors’ claims without payment of the levy by the policyholders, whom plaintiff claimed were shareholders. If that were so, then clearly the creditors were vitally interested. The liquidator in the proceedings seemed to be representing merely the company. | All persons interested in the decision should be represented A possible or the matter was not finally decided since it might be raised again, possibly by ; them. From cases quoted on Friday, hi? Honour continued, it would appear that there might be a distinction between the internal rights of the company as against its shareholedrs. That, he said, might also be a vital matter to con-1 sider. Mr Richmond said he had been in- i formed that the signatories to the memorandum, though they could contribute a substantial amount, could not contribute the whole of the £40,000 re- 1 quired to balance the assets with the liabilities. In reserving judgment, his Honour said this was an unusual type of company and there were few authorities on the questions raised in the action. The case deserved careful con- 1 sideration.