The Application of Armstrong Jones Life Assurance Ltd & Anor [1997] FCA 377

EX TEMPORE REASONS FOR JUDGMENT This is an application for an order pursuant to section 194 of the Life Insurance Act 1995 (Cth) ("the Act") confirming a scheme involving the transfer by Armstrong Jones Life Assurance Limited to Mercantile Mutual Life Insurance Limited of the life insurance business of the former. I have considered the terms of the scheme which is an annexure to the joint affidavit of Simon Solomon and Dave Waples, the actuaries appointed to consider the effect of the proposed transfer on the holders of policies of both companies. I have also considered the joint report of those deponents of 14 February 1997. I am satisfied that the terms of the scheme, in the light of the contents of that report are such that the scheme should be confirmed by the court. However in the course of the hearing of the application my attention has been drawn by counsel for the applicants to several matters which arise under the regulations made pursuant to Part 9 of the Life Insurance Act 1995. I shall deal with each of the matters separately. I have in fact formed the conclusion that none of them constitutes an impediment to the making of an order under section 194. The first matter concerns compliance with regulation 9.02(2)(b). Section 191(2)(b) provides that an application for confirmation of a scheme may not be made unless notice of intention to make the application has been published by the applicant in accordance with the regulations. Regulation 9.02(2)(b) provides that a notice of intention to make an application must give the address of each place at which a copy of the scheme may be obtained. The notice in question specified a number of addresses, being one in each capital city of the Commonwealth. However, two of the addresses were incorrect for reasons into which I do not think it is necessary for me to go although I have evidence before me to indicate that there was merely an oversight involved in the wrong statement of the addresses. The scheme of regulation 9.02 involves the publication of the notice of intention in the Commonwealth Government Gazette and in one or more newspapers circulating in each state and territory in which there is a register of life policies that includes the relevant policy of an affected policy owner. The notice must state that such a policy owner may get a copy of the scheme from the place and within the times and for the period set out in subregulation (4). Subregulation (4) provides that a copy of the scheme must be open for public inspection from 9 am until 5 pm every day (except weekends and public holidays) for a period of at least 15 days at an office of the applicant or another location approved by the Commissioner in each state and territory in which there is a register of life policies that includes the relevant policy of an affected policy owner. The evidence before me indicates that the only places in which there are registers of life policies for either of the companies involved are New South Wales and Victoria. The wrong addresses were in respect of offices in Canberra and in Launceston in Tasmania. The object of regulation 9.02(2)(b) is to ensure that any policy owner is informed of a place in his or her state or territory where a copy of the scheme may be obtained. The obligation imposed on a company is not to make copies of the scheme available in every state or territory but only in those states or territories where there is a register of life policies. I do not consider that there is a failure to comply with regulation 9.02(2)(b) by reason of a failure to specify correctly an address where copies of the scheme could in fact be obtained in circumstances where there is no obligation for the company to make the scheme available at that address. I consider therefore that there has been no failure to comply with regulation 9.02(2)(b) in the circumstances. Ms Booth, solicitor for the Insurance and Superannuation Commissioner, appeared pursuant to section 193(3) of the Act. Ms Booth indicated to the court that the Commissioner took the view that there had been no failure to comply with the regulations but that it was a matter for the court to consider in deciding whether or not to confirm the scheme that a wrong address had been shown in the notice. I do not consider that the incorrect statement of addresses would affect my exercise of discretion in favour of the applicants. I should indicate that I consider that it is relevant to the exercise of discretion, that the evidence shows that, in relation to each of the addresses where the scheme was made available, not one policy owner attended to inspect a copy of the scheme. In any event, if I had come to a different conclusion as to whether there had been compliance with regulation 9.02(2)(b), my provisional view would have been that it would have been open to me to confirm the scheme notwithstanding the failure to comply. Section 191(2)(b) provides that an application for confirmation may not be made unless notice of intention has been published in accordance with the regulations and section 193(2) provides that an application for confirmation must be made in accordance with the regulations. Nevertheless, I do not regard those provisions as being conditions precedent to the existence of jurisdiction for the court to confirm a scheme. Of course, failure to comply with the regulations may well be a very significant matter for the court in deciding whether or not to confirm a scheme in the exercise of any discretion which may arise under section 194, but it would not be fatal. The second matter to which my attention was drawn concerned the operation of regulation 9.02(3) which provides that the notice of intention to make an application must be published before the scheme is released for public inspection under sub-regulation (4). The evidence showed that the scheme was open for public inspection in most places as from 4 March 1997 but that, in relation to the Northern Territory, the notice was not in fact published until 25 March 1997. However, as I said a moment ago, the only States in which there is a register of life policies are New South Wales and Victoria and there is no register in the Northern Territory. Accordingly, in my view, there was no failure to comply with regulation 9.02(3) since the notice was published on 4 March 1997 in the newspapers circulating in New South Wales and Victoria and in the Government Gazette. That publication occurred early in the day on 4 March and the documents were not available for public inspection under 9.02(4) until after 9.00 am. In any event, as I have said above, I would not have regarded the failure to comply with regulation 9.02(3) in the respect that I have identified as being fatal to the application. The next matter to which my attention was drawn relates to compliance with regulation 9.03(1) which provides that, for the purpose of section 193(2) of the Act, an application to the Court for confirmation of a scheme may be made no earlier than whichever is the later of: