SUPREME COURT.

Star (Christchurch), Issue 10870, 10 September 1913, Page 5

SUPREME COURT.

CIVIL SITTINGS. Wed»:sday, September 10. (Before his Honor Mr Justice Den-

niston.) The Civil sittings of the Supreme Court were continued this morning before his Honor Mr JusticoDcnniston. JOHHNSTONEv. OCEAN ACCIDENT AND GUARANTEE COHPOKATION, LTD.

T. S. Johnstone (Mr'Gresson).claimed from tho Ocean Accident and Guarantee Corporation, Ltd. (Mr Myers) £4OO under an insurance policy. Mr Gresson submitted that the defence should begin and •Mr Myers agreed to that course. Mr Myers opened tho case for the defence. He dealt at iirst with_ the Workers' Compensation Act, explaining that at present the Act passed in 1908, repealing the Act in the Consolidated Statutes, was in force. It made substantial amendments' to the original Act, unci brought within the' purview of tho Act people working in various employments who previously were not definitely held to be within the scope of the Act. Previously there had been some doubt. There had since been many decisions, both in Britain and New Zealand, and tho law on that point was fairly well settled The Act of 19t>3" went further than tho original measure, passed in 1900, in its amendments up to 1908, and there was no doubt that many people, not previously within the Act, were now entitled to compensation for injuries sustained in accidents arising out of the course of employment. In 1903 Dalgety' and Co. approached the Ocean Accident and Guarantee Corporation to take out soirae sort of general cover under the Workers' Compensation Act. He would call tho then manager of the Wellington branch of the company as to tho arrangement entered into in Wellington; and Edward Richardson, the then manager- of the Christehurch branch of tho corporation, as to the arrangement in Christehurch. There was, he knew, a view taken by some Christehurch officers of the company that was different fi-om the one held in Wellington and advanced by him. It was claimed in Wellington that the policy was merely a, protective policy, and in Christehurch it was claimed that tho policies were given to tho servants of the company as gifts; but the dominion superintendent of tho company had replied to that opinion: "By what right? . The Christehurch branch had no right to give away the money of the shareholders when tho original contracts between tho company and its servants do not mention it." The servant's name was mentioned in the policy, said Mr Myers, but the servant had no interest in it at all. Dalgety and Co. held the policy as a protective measure. If the view put forward by the Christehurch branch were correct, a servant might before death bequeath his interest in the iiir surance to a stranger, and his relatives would then be. able to claim compensation under tho Act. • Dalgety's then would have no protection at all. Mr Gresson said that ,he intended to siibmit that the policy covered Johnstono and protected Dalgety and Co. also.

Continuing, Mr Myers said that on June 10, 1912, a letter was written by the general manager of the corporation to the Wellington manager asking if the arrangement was to protect the company and extended to accidents arising in the course of employment. Johnstone's policy was renewed on August 3, 1910. The premiums were paid by .Dalgety and Co. The view in tho letter of Juno 10, 1912, was confirmed by the superintendent of Dalgety and Co. shortly after it was received. Mr Myers went on to say that it had been held that where a person took out a policy over the life of another and paid the premiums the policy was the property of tho person who paid the premiums excepting in the case of a son and daughter where it was held to bo an advancement. The premium for £4OO on a personal insurance was £2 16s 6d, but Dalgety's paid £1 16s Bd, which was the amount under the Workers' Compensation Acb. In answer to a question by his Honor, Mr Myers said that the corporation in the event of an accident paid out to Dalgety and Co. only the amount of the liability of the company. Under the Workers' Compensation Act the amount in the case of death was now £SOO. The death occurred in October, 1912. According t<* the statement of claim the policy was dated August 3, 1910, and in it tho defendant company assured Douglas Graham Johnstone for £4OO against accident and death. On October 21, 1912, Douglas Johnstone died as tho result of an injury by accident within the meaning of the policy, and his father claimed the full amount of the policy. Tho statement of the defence denied that the policy had been issued personally to Douglas Johnstone and denied that the accident which caused his death was covered by the policy. The policy protected Dalgety and Co. only with respect to claims for accidents to servant:; arising out of the course of employment, it was submitted that the accident had not arisen out of tho course, of employment and that the defendant corporation was not liable for the amount of the policy. Mr Myers said that it was owing to tho doubt as to whether the employees were within the scope of the Act that the policies were taken out in the form of a personal accident insurance instead or' in the form under the Workers' Compensation Act. Edward Richardson, manager of the Christchurch branch of tho corporation in 1903, stated that the insurance was intended to cover the employees during twenty-four hours in each day. His impression was that U 5 an accident happened at any tiino in tho day the corporation should pay. The policy wf.nt ■ further that the Workers' Compensation Act policies. Auctioneers might tiansact deals at any tunc in the day. W. S. manager of the Wel-

branch of Dalgety and Co., said thai).in 1908 tho pergonal accident insurance was taken, out to cover ' auctioneers receiving over £5 a week, and therefore not within the Act at that timo, because- it was thought that the auctioneers had claims in common law. The Wellington office of Dalgety and Co. had no authority over the Christchurch office, but the superintendent had authority over all brandies in the dominion.

James M'lntosh, manager of the Wellington branch of Dalgety and-Co. from 1002 to 1010, said that he arranged with tho corporation for the original policies, and I)is fvolo object was to protect the company. The arrangement had no relation to the employees, who werenot coiibulted and paid no premiums. Harry Norman Lftlrdet, general manager of the defendant corporation, said that in 1012 lie discovered tho policies issued to'lnftuchcfc of Dalgety and Co. all over New Zealand. Thore was no documentary evidence as to tho arrangement in connection with the policies, and ho wrote, on July 10, 1912, to tho manager of Dalgety and Co., Wellington, thinking that ho was addressing the head man of tho company in New Zealand. The letter was intended to refer to all tho policies in tho dominion, and not merely those held over the 'staff in Wellington. Tn the following month Johnstone's policy .was renewed. Ho produced the claim made by Dalgety and Co. in respect of the death of a stock agent in 1910, who was accidentally killed. The policy, ho said, was the same as that held in connection with tho plaintiff. In 1908 a claim was paid to Dalgety and Co. on a similar policy, and the full amount was paid, although the servant covered was not entitled to claim under the Workers' Compensation Act. In cases of employees not entitled to-claim tho policies were clean outside tho Act. 11l opening his easo Mr Grcsson submitted that Dalgety and Co. .were in fact protected under tho policy. He would lead evidence to show that each employee in the Christchurch branch had been advised that the firm had insured him. Johnstone could have sued for the amount of the policy, but the Court would ha've*prosumed that tho policy protected Dalgety and Co. and the policy moneys . would be saddled with the amount of Dalgety'and Co.'s liability under tho Workers' Compensation Act. The point to be considered was whether the policy covered Dalgety and Co- alone under the Act or whether the policy benefited Dalgety and Co. to the extent of tho firm's liability under tho Act and also the servant outside the Act. That'view was supported by the fact that u policy under the Act was different, in form from those taken out by Dalgety and Co., and by the fact that similar policies' .were" taken out at the same time to cover-em-ployees ,wlio did not come within the Act. Dalgety and Co. were really in the position of being Johnstone's agent. His Honor remarked that Dalgety and Co. probably believed that there was a liability. Mr Gresson said that the actingmanager would say that tho policies were taken out deliberately to provide a provident fund for the employees. He would lead evidence of representatives of other insurance offices to show that there was little difference between the premiums under the Workers' Compenj sation Act and under a personal accident insurance.

Ernest George Rawnsley, sub-mana-ge!' of Dalgety and Co., Christehurch, said that he had taken out policies subsequent to 1904, paid annual premiums, and had added to the list of assured employees the company desired to cover. He discussed tho policies with Mr Archer, the manager, who had since died, and in tho discussions Mr Archer said that whatever happened to an employee there was a policy in the employee's favour representing £4OO or £SOO. When an employee was insured under, the personal insurance he signed the proposal, and the witness explained the effect of the policy, stating that if the employee was killed his executors would receive the face value of the policv. Mr Stewart, the manager of the Christehurch office, was insured-on a personal accident policy for which Dalgety and Co. paid the premiums. Mr Lawrence, the head auctioneer, was similarly insured. All tho stock agents and auctioneers,"irrespective of salary, were so insured, and also the shipping agent and land salesman. , To Mr Myers: Ho did not know that tho directors in London had a benevolent fund. Moneys had been set aside for tho purpose, but tho fund had not been constituted. It was purely at the discretion of the directors. •

Mr Myers: 'Will yon please tell me who authorised the Christchurch branch to grant this benevolent aid? Witness: I don't admit that it was' benevolence.

After a discussion with his Honor the witness said that the scheme was started by Mr Archer., who had power of attorney from the London Board of Directors. The Loudon Board was aware of the position, because in/'iie case, in addition to paying £4OO to an employee's relatives, the London Board made an additional grant. Mr Myers: Quite so—from the benevolent fund. ' To Mr Myers: The plaintiff had been a good client to the Christchurch branch, but witness had not taken any more interest in the case than he had been forced to take. He knew that Mr Liardet had arrived in Christchurch, and ho rang up his office last night at the instance of Mr Gresson referring to a telegram, and stating that he was sorry the case was coming on. Mr Myers: Did you not 6ay, "If you don't pay this claim, the name of your company will stink in Christchurch " ? Witness: I did not. I said, "It is a pity you cannot settle this claim. If you don't, the name of your company will probably stink,in Canterbury." I said that because I believed it. Mr Myers: Then you see we are not afraid of your thi-eat.

Continuing.the witness said that the proposals for insurance did not contain any mention of the salary of the various employees, but the Ocean Accident Corporation could draw an inference as to the salaries from the positions held by the men. Salaries were fixed by the manager, but confirmed by the superintendent. All increases to salaries were confirmed by the superintendent. Mr Myers: Do you think you , can make this benevolent grant without the permission of your superintendent P To his Honor the witness said that prior to the present action he would havo thought so. The branches had absolute independence with reference to details in connection with the staff. His Honor: This is more than a matter of detail.

Mr Myers put in a letter claiming on behalf of the company insurance money in connection with Knowles's death. The letter tvritten by tho witness claimed tinder. " our policy." Tho witness said that the policy was handed over to the plaintiff because it was thought that ho wa,s entitled to it.

Mr Myers: Was it not because you had received a letter expressing the opinion in the strongest manner possible that the policy was the property of Dalgety and Co."? Mr Myers then put in correspondence between the dominion superintendent and the Christchurch branch relative to the handing over of tho policy to the plaintiff. Reginald Arthur Ridley, insurance clerk"for Dalgety and Co., said that when obtaining the signatures of stock agents he explained that tho insurance was under a personal accident policy. For a man receiving £2OO per year the premiums would be about tho same for a policy under the Workers' Compensation Act and a personal accident policy. (Left sitting.)

[Per Pkkss Association*.] GREYMOUTH, September 10. The Supreme Court was opened today before his Honor Mr Justice Chapman. There was only one criminal case, a charge of manslaughter against Samuel Godfrey in connection with tho death of Ronald Adamson. South Westland,. during a fight. The jury returned a no bill. i >.