770 required by 33 & 34 Vict. c. 61, s. 10. Winding up company to be ancillary to winding up of prin cipal company. OTHER ACTS RELATING TO COMPANIES. "statement so deposited after the next investigation "shall be accompanied by a printed copy of the "abstract required to be made by section seven," be it therefore enacted that the words "next investigation" shall be construed to mean the first investigation after the passing of the said Act. The Board of Trade shall lay before Parliament any statement or abstract of report which is deposited with them by any company, and purports to be in pursuance of the Life Assurance Companies Act, 1870, although the board are of opinion that it is not such a statement or abstract as is required to be prepared by that Act. 4. Where the business or any part of the business of subsidiary of a life assurance company has, either before or after the passing of this Act, been transferred to another company under an arrangement in pursuance of which such first-mentioned company (in this Act called the subsidiary company) or the creditors thereof has or have claims against the company to which such transfer was made (in this Act called the principal company), then, if such principal company is being wound up by or under the supervision of the court, either at or after the passing of this Act, the court shall (subject as herein-after mentioned) order the subsidiary company to be wound up in conjunction with the principal company, and may by the same or any subsequent order appoint the same person to be liquidator for the two companies, and make provision for such other matters as may seem to the court necessary, with a view to such company being wound up as if they were one company; and the commencement of the winding up of the principal company shall, save as otherwise ordered by the court, be the commencement of the winding up of the subsidiary company; the court nevertheless shall have regard, in adjusting the rights and liabilities of the members of manner Life Assurance Companies Act 1872. the several companies between themselves, to the constitution of such companies, and to the arrangements entered into between the said companies, in the same liabilities of different classes of contributories in the as the court has regard to the rights and case of the winding up of a single company, or as near thereto as circumstances admit. Where any subsidiary company or company allege to be subsidiary is not in process of being wound up at the same time as the principal company to which it is subsidiary, the court shall not direct such subsidiary company to be wound up unless after hearing all objections (if any) that may be urged by or on behalf of such company against its being wound up, the court is of opinion that such company is subsidiary to the principal company, and that the winding up of such company in conjunction with the principal company is just and equitable. Where any subsidiary company and principal company are being wound up by different branches of the court, the court to which appeals from such branches lie shall make an order directing in which branch the winding up of such companies is to be carried on, and the necessary proceedings shall be taken for carrying such order into effect. An application may be made in relation to the winding up of any subsidiary company in conjunction with a principal company by any creditor of, or person interested in, such principal or subsidiary com pany. a re 771 Where a company stands in the relation of principal company to one company, and in the lation of a subsidiary company to some other company, or where there are several companies standing in the relation of subsidiary companies to one principal company, the court may deal with any number of such companies together or in separate groups, as it thinks 772 annuities OTHER ACTS RELATING TO COMPANIES. most expedient, upon the principles laid down in this section. This section facilitates the process of winding up in cases where one company has absorbed several other companies. The discretion vested in the court would seem sufficient to meet the objections which have been urged against this section. Valuation of 5. Where a life assurance company is being wound and policies, up by the court, or subject to the supervision of the court, or voluntarily, the value of every life annuity and life policy requiring to be valued in such winding up shall be estimated in manner provided by the first schedule to this Act, but this section shall not apply to any company the winding up of which has commenced before the passing of this Act, unless the court having cognizance of the winding up so order, which order that court is hereby empowered to make, if it think it expedient so to do, on the application of any person interested in the winding up of such company. In Bell's case, 9 Eq. 706 (followed by Lord Romilly in Holdich's case, 14 Eq. 72), V.-C. James adopted the following method of valuing a policy. He held that, selectting an office resembling as near as possible the Albert (the office in which Mr. Bell was insured) in the amount of its capital or guarantee fund and its rates of premium, and finding at what premium such office would insure the life, and capitalizing the difference between that premium and the premium payable for the same amount by the insured to the Albert, you would have the sum payable to the insured to place him in as good a position as he would have been in if the Albert had not been wound up. The objections to this method were in the course of the Albert Arbitration forcibly pointed out by Lord Cairns in Lancaster's case, Reilly's Rep. p. 90; and in that case Lord Life Assurance Companies Act 1872. 773 Cairns laid down the rule which has been adopted by this First and be rules of 6. The rules in the first and second schedules to Rules in this Act shall be of the same force as if they were Second rules made in pursuance of the one hundred and Schedules to seventieth, one hundred and seventy-first, and one court. hundred and seventy-third sections of "The Companies Act, 1862," as the case may be, and may be altered in manner provided by the said sections, and rules may be made under the said sections for the purpose of carrying into effect the provisions of this Act with respect to the winding up of companies. as to nova holders. 7. Where a company, either before or after the Regulation passing of this Act, has transferred its business to or tions by been amalgamated with another company, no policy policy holder in the first-mentioned company who shall pay to the other company the premiums accruing due in respect of his policy shall by reason of any such payment made after the passing of this Act, or by reason of any other act done after the passing of this Act, be deemed to have abandoned any claim which he would have had against the first-mentioned company on due payment of premiums to such company, or to have accepted in lieu thereof the liability of the other company, unless such abandonment and acceptance have been signified by some writing signed by him or by his agent lawfully authorized. In winding up companies which had absorbed numerous other companies, a question soon arose as to the position and rights of a policy holder or annuitant in an absorbed company. Had he accepted in substitution for the liability of his old company the liability of the new company in which his old company was absorbed, or did he in spite of the absorption retain his hold on the assets of his old company? Or, as 774 OTHER ACTS RELATING TO COMPANIES. by the revival of a term from the Civil Law (a) it was expressed--had he or had he not effected a novation, or agreed to substitute for his old contract a new contract with a third party? (b) The Court of Chancery, as well as Lord Cairns and Lord Westbury, in the Albert and European Arbitrations respectively, agreed that novation is a question of intention, and that the intention is a question of fact, but great difference of opinion has existed as to the evidence of the fact. From the Chancery decisions it may be collected that where on an amalgamation a policy holder has in substance notice that he has his election whether or not he will accept the liability of the new company in substitution for that of his old company, and then (even without any express contract) pays premiums to and takes benefits from the new company, as if he had assented to the substitution, the Court will (in the absence of the proof of the contrary) find that he has so assented. Spencer's case, 6 Ch. 362, and especially p. 370; Times Life Assurance Co., 5 Ch. 381; Anchor Assurance Co., 5 Ch. 632. In Expte. Blood, 9 Eq. 316, and in Merchant's Assurance Society, 9 Eq. 694, novation was clearly effected by the action of the holder: while in Manchester and London Association, 5 Ch. 640, and in Griffith's case, 6 Ch. 374, it was held that there was no novation. As to annuitants, it seems that nothing short of an express contract between the annuitant and the new company in discharge of his rights against his old company, can extinguish those rights, Family Endowment Society, 5 Ch. 118; India and London Life Assur. Co., 7 Ch. 651. The Chancery decisions left undetermined the point how far and under what circumstances mere standing by and (a) Just. III. Inst. tit. 29 (30). Sandars, p. 485. (b) On the subject of novation and the liquidation of amalgamated assurance companies, an article by C. J. Bunyon in the Law Magazine (N.S.) No. V, for June, 1872, may be consulted. |