LIFE INSURANCE MONIES

Taranaki Daily News, 27 March 1934, Page 9

LIFE INSURANCE MONIES

POLICIES OUTSIDE DOMINION PROTECTION FROM CREDITORS. CASE BEFORE COURT OF APPEAL. WIDOW VERSUS PUBLIC TRUSTEE. By Telegraph—Press Association. Wellington, Last Night By his will George Douglas Lyon, late of Murchison, bequeathed to his wife and four of his children in equal shares the proceeds, amounting to approximately £BOO, of a life insurance policy taken out in Scotland in the Scottish Widows’ Fund and the Life Assurance Society. The estate proved insolvent and is being administered by the Public Trustee. A question arose as to whether, the policy moneys were protected from the creditors of the estate by section 65 of the Life Insurance Act of 1908 (N.Z.). On an originating summons being issued for determination of this question Mr. Justice Ostler held that section 65 had no application to policies issued outside New Zealand, by life insurance societies not carrying on business in New Zealand. Sarah Charlotte Lyon, widow of deceased, is appealing from this decision, and the appeal is being heard to-day by the Court of Appeal. The respondent is the Public Trustee, the administrator of the estate. The court reserved its decision. For appellant Mr. W. V. Rout (Nelson) submitted that literally interpreted part 11 of the Life Insurance Act of 1908 was not territorial in its application and applied to the policy in the present case. The history of New Zealand life assurance legislation showed that the intention of the legislature had been to grant progressively' wider protection to life insurance policies. Counsel for the Public Trustee stated that the latter submitted to the judgment of the court. For the creditors, Mr. H. F. O’Leary submitted that section 65 of the Act had no application to policy moneys payable under this policy, and that the judgment appealed from was correct. AH legislation was presumed to be territorial in application, and consideration of part 11 of the Act did not weaken this presumption but on the contrary strengthened it ," • ■

When the Court resumed in the afternoon Mr. W.-V. Fletcher (Nelson), who with Mr. O’Leary appeared for the creditors, submitted that if the’.court held that the New Zealand Life Insurance Act could apply to this policy then the question arose as to whether the law of New Zealand or the law of, Scotland should be applied. He submitted that policy moneys should be governed by the “lex fori,” the Scottish law under which they were not protected from creditors.

Mr. Rout in reply dealt vith the arguments for the creditors. He contended that Scottish law did not in any way affect the question, which must be disposed of in accordance with the law of domicile, New Zealand law. With regard to the New Zealand Life Insurance Act he submitted that the creditors’ interpretation of that statute would lead to absurd results and could not be supported. Each'section of the Act must be construed separately.