Scottish Court of Session Decisions

The Assurance Companies Act 1909 (9 Edw. VII. c. 49), sec. 13, enacts—(as quoted in rubric).

The directors of the City of Glasgow Life Assurance Company, and the directors of the Scottish Union and National Insurance Company, petitioners, presented a petition to the Court under the Assurance Companies Act 1909, sec. 13, for sanction of the transfer of the whole business of the first company to the second company in terms of a provisional agreement entered into between the companies.

The petition stated, inter alia—“That the object and business of the first company is the making and effecting of assurances on lives and survivorships, the making or effecting of all other kinds of assurance connected with life, the granting and selling of annuities either for lives or otherwise, and on survivorships, and the purchasing of annuities for lives or otherwise, the granting of endowments for children and other persons, the receiving of investments of money for accumulation, and the purchasing of contingent rights, whether of reversion, remainder, annuities, life policies, or otherwise….

That the business and objects of the second company are to carry on the business of life, fire, marine, and accident assurance, to grant and sell annuities of all kinds, and to grant and affect other assurances and contracts of guarantee or indemnity against any other description of loss or damage to property or person occasioned in any manner whatsoever….

That as the result of negotiations between the boards of directors of the two companies a provisional agreement was entered into between them dated 5th and 6th March 1913, with an addendum thereto dated 9th May 1913, by which the first company agrees to sell and the second company agrees to purchase on the terms therein mentioned the entire undertaking, business, goodwill, name, rights, and all other assets of the first company, and that as at and from the 1st day of January 1913.…

That by the said provisional agreement it is provided that the contract between the said companies should be conditional on .… ( c) the shareholders of the first company confirming said provisional agreement by a majority of not less than 75 per cent. of the capital of the first company not later than the 30th day of April 1913, ( d) the transfer being approved by the shareholders of the second company and confirmed by the Court as required under section 13 (2) of the Assurance Companies Act 1909, on or before the 30th November 1913.…

That the shareholders of the first company, by a majority of over 75 per cent. of the capital of the first company, confirmed the foresaid provisional agreement prior to the 30th day of April….

That the following resolution approving of said transfer was passed at the annual general meeting of the second company on 7th May 1913, viz.—‘That the scheme for the transfer of the undertaking of the City of Glasgow Life Assurance Company to this company, on terms embodied in the provisional agreement to be submitted to the Court, dated the 5th and 6th days of March 1913, and made between the Scottish Union and National Insurance Company of the one part, and the City of Glasgow Life Assurance Company of the other part, be, and the same is, hereby approved.’

That a statement of the nature of the transfer, together with an abstract containing the material facts embodied in the said provisional agreement and addendum, copy of the report of the first company for the year ending 31st December 1912, upon which the said provisional agreement with its addendum is founded, copy of the actuarial report dated 16th April 1913 on the proposed transfer by Mr Gordon Douglas as the independent actuary required by section 13 (3) ( b) of the Assurance Companies Act 1909, and a copy of the report of the second company for the year ending 31st December 1912, have been transmitted to each policyholder of the first company, as well as to the persons claiming to be interested in any policy who have given to the first company notice in writing of such interest, all in terms of said section 13 (3) ( b) of said Act.…

That notice of the intention to make this application was published in the Edinburgh, London, and Dublin Gazettes on the 6th day of June 1913, and that the provisional agreement with its addendum remained open for the inspection of the policyholders and shareholders of both Companies at their head offices in Edinburgh and Glasgow respectively for a period of 15 days after the publication of the said Gazette notice, in terms of section 13 (3) (c) of said Assurance Companies Act 1909.

That the present application for sanction is presented under and by virtue of the Assurance Companies Act 1909, and particularly section 13 thereof. By virtue of sub-section (3) (b) of the said section, a statement of the nature of the proposed transfer, together with an abstract containing the material facts embodied in the said provisional agreement and addendum,

Page: 789↓

and copies of the said report of the first company for the year ending 31st December 1912, and of the actuarial report dated 16th April 1913 on the proposed transfer by Mr Gordon Douglas as independent actuary as aforesaid, all as hereinbefore referred to, fall to be transmitted to the policyholders of the second company unless the Court otherwise directs. As it is provided by said provisional agreement that the Life Assurance and Annuity Fund of the first company shall be kept separate and distinct, and as the Life Assurance and Annuity Funds of the second company cannot in any way become liable for nor be affected by the sums due or to become due under the policies of the first company, and as the transmission of the foresaid documents to the policyholders of the second company, about 30,000 in number, would cause considerable trouble and expense, it is humbly submitted that your Lordships should direct that the said transmission may be dispensed with.

That the petitioners having otherwise complied with the requirements of the statute, are desirous of having the proposed transfer sanctioned and confirmed by your Lordships in terms of the Assurance Companies Act 1909.

That it is the intention of the first company to proceed by way of voluntary liquidation and a sale under the Companies (Consolidation) Act 1908.”

In the petition the petitioners craved, inter alia, “to direct that any transmission to the policyholders of the Scottish Union and National Insurance Company foresaid of a statement of the nature of the transfer, together with an abstract containing the material facts embodied in the said provisional agreement and addendum thereto, and copies of said reports, may be dispensed with.”

On the petition appearing in the Single Bills on 25th June 1903, counsel for the petitioners moved the Court to dispense with the transmission of the documents mentioned in the prayer of the petition, and referred to Empire Guarantee and Insurance Corporation, Limited, Petitioners, 1911 S.C. 1296, 48 S.L.R. 1038.

The Court (consisting of Lords Dundas, Salvesen and Guthrie, the Lord Justice-Clerk being absent) without delivering opinions pronounced an interlocutor appointing the petition to be intimated and advertised, dispensing with the transmission of the documents mentioned in the prayer of the petition, and allowing all persons having interest to lodge answers within eight days after such intimation and advertisement.