Jersey Unreported Judgments

Companies - application relating to proposed scheme to transfer long term business of Tunbridge Wells to Forester Life.

[2013]JRC003

Royal Court

(Samedi)

4 January 2013

Before     :

Sir Michael Birt, Kt., Bailiff, and Jurats Kerley and Olsen.

 

IN THE MATTER OF THE REPRESENTATION OF TUNBRIDGE WELLS EQUITABLE FRIENDLY SOCIETY LIMITED AND FORESTER LIFE LIMITED

AND IN THE MATTER OF AN APPLICATION PURSUANT TO ARTICLE 27 OF AND SCHEDULE 2 TO THE INSURANCE BUSINESS (JERSEY) LAW 1996.

Advocate S. M. Huelin for the First and Second Representors.

judgment

the bailiff:

1.        This is an preliminary application by Tunbridge Wells Equitable Friendly Society Limited, to whom we shall refer as Tunbridge Wells, and Forester Life Limited, whom we shall refer to as Forester Life, under Article 27 of the Insurance Business (Jersey) Law 1996 ("the 1996 Law") in connection with a scheme for the transfer of the whole of the long-term insurance business carried on in or from within Jersey by Tunbridge Wells to Forester Life.  It is part of a much larger scheme involving the business in the United Kingdom as well. 

2.        Schedule 2 of the 1996 Law contains certain procedural requirements which have to be satisfied before the Court may sanction a scheme for the transfer of business under Article 27.  The relevant paragraphs are paragraphs 3 and 4b and they read as follows:-

"3. The Court shall not determine an application under this Schedule unless the Representation to the Court is accompanied by a report on the terms of the scheme by an independent actuary and the Court is satisfied that the requirements of paragraph 4 have been complied with."

Paragraph 4 then sets out the requirements and the relevant one for us today is 4(b) which reads as follows:-

"4. The said requirements are:-

...

b) except where the Court has otherwise directed, that a statement:-

(i) setting out the terms of the scheme, and

(ii) containing a summary of the report mentioned in paragraph 3 sufficient to indicate the opinion of the actuary on the likely effects of the scheme on the policy holders of the companies concerned, has been sent to each of those policy holders and to every member of those companies."

3.        The Court has dealt with many applications for transfers of insurance business under Article 27 and almost invariably the representors ask the Court to 'otherwise direct' under paragraph 4(b) because it is usually either impracticable or completely unnecessary for all the details of the scheme and the full actuary's report to be sent to all the policy holders and members of both the transferor and the transferee company.  The Court is usually asked to accept that the company will send broad details of the scheme and a summary of the report to those policy holders who are likely to be affected by the Jersey scheme. 

4.        Such an application has been brought in this case and the Court has agreed to dispense with the full requirements at paragraph 4(b) against the representors undertaking to use their best endeavours to circulate the information pack, as defined in the representation, to the notified policy holders, also as defined in the representation. 

5.        The Court would not normally give reasons for a procedural decision of this nature but we have identified an issue of some general significance.  As normal, this matter has been listed before the Court consisting of a presiding judge and two jurats.  However it seems to us that a decision as to whether service of the information referred to in paragraph 4(b) on every policyholder and member is necessary, is a matter of procedure.  It is akin, for example, to issues of who should be convened to a trust application brought by a trustee.  Under Article 15(1) and (1A) of the Royal Court (Jersey) Law 1948 the Bailiff is the sole judge of matters of procedure.  Accordingly it seems to us that in future these preliminary applications to dispense with all of the requirements of paragraph 4(b) of Schedule 2 should be brought before a Court consisting of a judge sitting alone, i.e. without jurats. 

6.        In saying that we are of course making no criticism whatsoever of Advocate Huelin in this case because the Court has invariably sat fully constituted with jurats to consider these matters and it is a point which has only just occurred to us, perhaps belatedly.  It goes without saying, of course, that the substantive application, when the transfer itself is considered by the Court, must still be listed before the Court consisting of judge and jurats because that is a decision which requires the jurats. 

7.        So, as we say, in future these preliminary applications under the 1996 Law should be listed before a judge alone and we are therefore giving this judgment so that the profession is aware of the position. 

Authorities

Insurance Business (Jersey) Law 1996.

Royal Court (Jersey) Law 1948.