INSURANCE LEVY

Poverty Bay Herald, Volume LXV, Issue 19803, 3 December 1938, Page 18

INSURANCE LEVY

TEST CLAIM HEARD PUBLIC MUTUAL COMPANY i TAXI-OWN HR SUED MEMBERSHIP DENIED (Pur Press Association.) AUCKLAND, this day. What was described by counsel as a test case in which many people were interested, was brought before Mr. justice fair in the Supreme Court yesterday, when the Public Mutual Insurance Company of New Zealand, • turougn its liquidator, Joyce William Hyland, claimed .t2G os and costs from Walter Harold Hunter, a taxi-pro-prietor, Auckland. The statement of claim stated that every person desirous of becoming a mernoer ot the company had to sign an apphcac.on to mm eilecc or tor a policy of insurance. The granting of a policy was suliicient proof of membership. The defendant had, on June 7, 1937, satisfied both those requirements. A policy was granted to him and subsequently renewed for a period expiring on June 7, 1939. On August 11, 1938, the directors made a levy upon all members of two and a hah times their current annual premiums, to be paid on September 1U last. Hunter’s levy was not paid. Statement of Defence The statement of defence denied all knowledge of the decision on September 23, 1938, to wind up the company or that the defendant lodged an application for membership, ft was admitted that he took out an insurance cover with the company last year ana 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 £2G 5s made upon him. Mr. .Richmond, for the plaintilf, said the action had been taken as a test case. Tne real matter at issue was whether the defendant was a member or had been a member of the plaintiff company. The action hua arisen because the defendant argued mat there never w'as, in effect, any register of memoers and mat ne neve.. was entered upon any register of me company. Large Sum Involved "That matter, ot course, affects ail other persons who are alleged to be members of the company, excepting tnose persons who signed the memorandum of association,” Mr. Richmond continued, "and those who may be still members. if the defendant is not ana never has been a mernoer oi the company, the result would be that at the meeting on September 23, 1938, at which the members or those who purported to be members passed a resolution to go into liquidation, there would not be a quorum. If that is the position, the company is not in liquidation, and the gentleman who purports to be the liquidator would not be the liquidator.”

There was a very large amount involved, counsel said. The liability ol all persons who were proved to be members was, oi course, unlimited. There was a debenture ol 1123,700. There were claims against the company in respect of policies and other creditors. The levy made by the directors before the company went into liquidation was sullicient to produce iOu.uuO, assuming that all members paid or were capable of paying. The net amount required lrom members was £40,000.

Douglas Arthur Young said that at the beginning of August, 1938, he was appointed general manager of the company. Witness said he had not been able to find any book labelled or titled “Register of Members.” He said the defendant had signed a proposal form and an entry was made in the x jro P osa l book. The form was bound with others and a card was included in the system of indices which gave particulars relating to the insured persons who claimed to be members.

No Register of Members

Cross-examined by Mr. A. H. Johnstone, K.C., for the defendant, witness admitted that at no time would .the renewals register show a full list oi members of the company. There was no book to show membership, when persons became members or when they ceased to be members of tiie company. That concluded the evidence for the plaintiff, whereupon Mr. Johnstone opened for the defence. He said it was submitted that the defendant was not liable for the sum claimed because he was not and never had been a member of the company. According to section 38 of Tne Companies Act, 1933, it was laid down that a member was one who had agreed io membership and whose name was entered on tiie company’s register of members. The second condition ot membership never was fulfilled m Hunter’s case because, it was submitted, there never was a register.

The hearing was adjourned till Monday.