INSURANCE LEVY

Evening Post, Volume CXXVI, Issue 136, 6 December 1938, Page 7

INSURANCE LEVY

COMPANY'S CLAIM

TEST CASE CONCLUDES

(By Telegraph—Press Association.)

AUCKLAND, December 5.

The hearing of the test case brought by the Public Mutual Insurance Company of New Zealand, through its liquidator, Joyce William Hyland, for £26 5s and costs from Walter Harold Hunter, taxi proprietor, was concluded before Mr. Justice Fair in the Supreme Court.- Legal argument was heard, and at the close of the day his Honour reserved his decision. Mr. Richmond appeared for the plaintiff and Mr. A. H. Johnstone, K.C., for the defendant. ■

According to Mr. Richmond, the question at issue was whether Hunter was a member of the company. He had satisfied the requirements for membership and taken out and subsequently renewed a policy on August 11, 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.

The defendant denied all knowledge of the decision to wind up the company or that he lodged an application for membership. He also denied being engaged as a member or that he knew the levy was to be made.

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 without1 payment of the levy by the policyholders, whom the 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 if possible, for the matter was not finally decided since it might be raised again, possibly by them.

From cases quoted on Friday, his Honour continued, it would appear that there might be a distinction between the internal rights of the company as against its shareholders. That, he said, might also be a vital matter to consider.

Mr. Richmond said be had been informed that the signatories to the memorandum, though they could contribute a substantial amount, could not contribute the whole of tlfe £40,000 required to balance the assets with the liabilities.

In reserving judgment, his Honour said that this was an unusual type of company and there were very few authorities on the questions raised in the action. The case deserved careful consideration.