Scottish Court of Session Decisions

The Assurance Companies Act 1909 (9 Edw. VII, cap. 49) provides—Section 13—“(1) Where it is intended … to transfer the assurance business of any class from one assurance company to another company, the directors of any one or more of such companies may apply to the Court by petition to sanction the proposed arrangement. (2) The Court, after hearing the directors and other persons whom it considers entitled to be heard upon the petition, may sanction the arrangement if it is satisfied that no sufficient objection to the arrangement has been established. (3) Before any such application is made to the Court—( a) Notice of the intention to make the application shall be published in the Gazette. ( b) A statement of the nature … of the transfer … together with an abstract containing [certain particulars] shall, unless the Court otherwise directs, be transmitted to each policy-holder of each company [in certain specified manner]: Provided that it shall not be necessary to transmit such statement and other documents to policy-holders other than life, endowment, sinking fund, or bond investment policy-holders, nor in the case of a transfer to such policy-holders if the business transferred is not life assurance business or bond investment business. And ( c) The agreement or deed under which the … transfer is effected shall be open for the inspection of the policy-holders and shareholders at the offices of the companies for a period of fifteen days after the publication of the notice in the Gazette.”

Sir Thomas Sidney Lea, Bart., and others, directors of the United Sickness and Accident General Insurance Company, Limited, incorporated under the Companies Acts 1862 to 1900, and having its registered office at 42 Melville Street, Edinburgh, petitioners, with the consent and concurrence of their company and of the United General Commercial Insurance Corporation, Limited, incorporated under the Companies Acts 1908 to 1917, and having its registered office at 37 Old Jewry, London, presented a petition to the Court under the Assurance Companies Act 1909, section 13, to sanction the transfer by the former company of its business to the latter company.

The petition, after setting forth the powers of the two companies as to the transfer and acquisition of the business, stated that by an agreement in writing between the respective parties, dated 11th December 1919, the company agreed to sell and transfer to the corporation, and the corporation agreed to purchase and accept the transfer of, the undertaking, property, and assets of the vendor company, including the benefit of all contracts in connection therewith as on 1st December 1919, and all book debts owing to the vendor company as on that date, and the benefit of the securities for the same, and all cash in hand or at the bank, subject to the terms and conditions and for the consideration stated in the agreement, and that the agreement in question had been approved by a special resolution of the company duly passed and confirmed.

The petition further set forth—“The present arrangement is one for a transfer of assurance business. The assurance business proposed to be transferred from the company is not life assurance business or bond investment business. Accordingly no transmission of any statement and abstract or particulars to any policyholders is required.

“Both the transferring and the undertaking limited companies are consenters to this application. Conform to the practice in these matters the petitioners have prepared, and will insert in the Edinburgh Gazette immediately upon the issue of the first order hereon, a notice of the intention to make application to the Court for sanction as aforesaid. The agreement will thereafter lie open to policy-holders and shareholders for fifteen days at the offices of the company and of the corporation as specified in said notice, and it is proposed that the date for lodging answers hereto should be fixed by your Lordships after the expiry of said fifteen days.”

The petitioners craved the Court, inter alia, “to appoint this petition to be intimated on the walls and in the minute book in common form, and to ordain answers, if any, to be lodged within eighteen days of such intimation,” and thereafter to approve of the agreement and to sanction the arrangement by way of transfer proposed.

At the calling of the petition in Single Bills counsel for the petitioners stated that the practice of the courts, both in England and Ireland, in relation to such transfers

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and amalgamations, was to allow the Gazette notice of intention to make application to run concurrently with notice or intimation of the petition and with the time for lodging answers. Counsel submitted that it was expedient that the practice of all courts in the United Kingdom should be uniform, and that the practice referred to was justified by construing the expression “before application” as applying to the ultimate motion to the Court to approve of the agreement, and that the requirements of the statute were satisfied by publication of the intention to make the application in the Gazette after the issue of the first order for intimation and answers. Counsel exhibited to the Court an application to the High Court of Justice in Ireland in a similar petition in which the practice above stated was followed.