Div 8Judicial Management and Winding-up.

Division 8.—Judicial Management and Winding-up. Application for judicial management or winding-up. S. Africa, s. 30. 59.—(1.) If the Commissioner, by reason of the conclusions arrived at by him as a result of an investigation under Division 7 of this Part in respect of any company is of opinion that it is necessary or proper so to do, he may apply to the Court for— (a) an order that the company or any part of the business of the company be placed under judicial management; or (b) an order that the company or any part of the business of the company be wound up. (2.) A company may, in respect of itself, after giving the Commissioner one month’s notice in writing of its intention so to do apply to the Court for any order specified in the last preceding sub\-section. (3.) Both the company and the Commissioner shall be entitled to be heard on any application made to the Court under this section. (4.) A company or any part of the business of a company shall not be judicially managed or wound up except under the provisions of this Act. (5.) Where an application is made under this section for an order in respect of any company, all actions and the execution of all writs, summonses and other processes against the company shall, by virtue of this section, be stayed and shall not be proceeded with without the leave of the Court first obtained or unless the Court otherwise directs. Judicial management. S. Africa, s. 31. 60.—(1.) An order for the judicial management of a company or of part of the business of a company made after the hearing of an application under the last preceding section shall be subject to the provisions of this section and of the next six succeeding sections. (2.) The Court shall appoint a judicial manager who shall receive such remuneration as the Court directs, and the Court may at any time cancel the appointment and appoint some other person as judicial manager. (3.) The Court may direct how and by whom the remuneration, charges and expenses of the judicial manager shall be borne, and may, if it thinks fit, charge that remuneration and those charges and expenses on the property of the company in such order of priority in relation to any existing charges on that property as it thinks fit. (4.) The management of the company, or of such part of the business of the company as the order of the Court directs shall, as on and after a date specified in the order, vest in the judicial manager appointed by the” Court, but, except with the leave of the Court, the judicial manager shall not issue any further policies (other than paid-up policies as required by this Act). (5.) As on and after the date so specified, any person vested with any such management immediately prior to that date shall be divested of that management. (6.) The Court shall issue such directions to the judicial manager as to his powers and duties as it deems desirable in the circumstances of the case. (7.) The judicial manager shall act under the control of the Court, and may apply to the Court at any time for instructions as to the manner in which he shall conduct the judicial management or in relation to any matter arising in the course of the judicial management. (8.) The judicial manager shall give the Commissioner such information as the Commissioner requires from time to time, and shall report to the Commissioner whenever he intends to apply to the Court for instructions and shall, at the same time, furnish to the Commissioner particulars of the application. (9.) The Commissioner shall be entitled to be heard on any such application, and may himself make application to the Court with reference to the conduct of the judicial management. Cancellation of judicial management order. 61. If at any time, on the application, of the judicial manager or of any person interested, it appears to the Court that the purpose of the order for the judicial management of the company or of part of the business of the company has been fulfilled, or that for any reason it is undesirable that the order should remain in force, the Court may cancel the order and thereupon the judicial manager shall be divested of the management which shall again vest in the board of directors or other governing body of the company. Report by Judicial manager. 62.—(1.) The judicial manager shall conduct the management with the greatest economy compatible with efficiency, and shall, as soon as possible, file with the Court a report stating which of the following courses, is in the circumstances, in his opinion, most advantageous to the general interests of the owners of the policies of the company:— (a) The transfer of the business of the company to some other company or to the Commonwealth Government Insurance Office, in pursuance of a scheme to be prepared in accordance with Division 9 of this Part (whether the policies of the business continue for the original sums insured, with the addition of bonuses that attach to the policies, or for reduced amounts); (b) The carrying on of its business by the company (whether the policies of the business continue for the original sums insured, with the addition of bonuses that attach to the policies, or for reduced amounts); (c) The winding-up of the company or of any part of the business of the company; (d) The dealing with part of the business of the company in one way, and with part of that business in another way; or (e) Such other course as he deems advisable. (2.) The judicial manager shall forthwith after filing the report furnish a copy of the report to the Commissioner and make an application in writing to the Court for an order to give effect to the course stated in the report. (3.) The report or a copy of the report shall be open for inspection by any person during official hours, at the Registry of the Court in which the report is filed or at such place as the Commissioner determines. Indemnity. 63. The judicial manager shall not be subject to any action, claim or demand by, or liability to, any person in respect of anything done or omitted to be done in good faith in the exercise, or in connexion with the exercise, of the powers conferred on the judicial manager under this Division. Decision of Court on report of judicial manager. 64.—(1.) The Court shall on the hearing of an application made under sub-section (2.) of section sixty-two of this Act— (a) after hearing the Commissioner, the judicial manager and any other person who in the opinion of the Court is entitled to be heard; and (b) after considering the report of the judicial manager, make an order giving effect to the course which it considers in the circumstances to be most advantageous to the general interests of the owners of the policies of the company. (2.) The order of the Court shall be binding on all persons, and shall have effect notwithstanding anything in the instruments constituting the company, or in the articles of association or other rules of the company. Transfer of business to another company. 65. Where an order is made by the Court for the transfer of the business of a company to some other company or to- the Commonwealth Government Insurance Office the judicial manager shall prepare a scheme for the transfer in accordance with Division 9 of this Part and until the scheme is confirmed by the Court under that Division the management of the company shall continue to be vested in the judicial manager. Cancellation of contracts or agreements. 66. The Court may, either of its own motion or on the application of the judicial manager, at any time while an order under section sixty of this Act is in force with respect to a company, after hearing all persons who, in the opinion of the Court, are entitled to be heard, cancel or vary (either unconditionally or subject to such conditions as the Court thinks just) any contract or agreement (other than a policy) between the company and any other person which the Court is satisfied is detrimental to the interests of the policy owners. Winding-up. S. Africa, s. 32. 67.—(1.) An order of the Court for the winding-up of a company made after the hearing of an application under section fifty-nine of this Act or made in pursuance of section sixty-four of this Act, shall be subject to the provisions of this section and of the next four succeeding sections. (2.) The company shall be wound up by the Court which shall appoint a liquidator, who shall receive such remuneration as the Court directs, and the Court may at any time cancel the appointment and appoint some other person as liquidator. (3.) The Court shall give such directions to the liquidator as appear to the Court to be necessary or desirable with respect to the winding-up. (4.) The liquidator shall act under the control of the Court and may apply to the Court at any time for instructions as to the manner in which he shall conduct the winding-up or in relation to any matter arising in the course of the winding-up. (5.) The liquidator shall give the Commissioner such information as the Commissioner requires from time to time, and shall report to the Commissioner whenever he intends to apply to the Court for instructions and shall at the same time furnish to the Commissioner particulars of the application. (6.) The Commissioner shall be entitled to be heard on any such application, and may himself make an application to the Court with reference to the conduct of the winding-up. (7.) Subject to this Act, and to any direction of the Court, the winding-up of a company incorporated within Australia shall be carried out in accordance with the law in force in the State or Territory in which the head office of the company is situated with respect to the winding-up of a company by a court and that law shall apply accordingly, with such modifications and adaptations as are necessary. Ascertainment of value of liability under policies. Imp. Act 1909, 7th Schedule. Eng. Bill 1927, 7th Schedule, Pt. II. 68. The liquidator shall ascertain, in such manner and upon such basis as the Court approves, the value of the liability of the company to every person appearing by the books of the company to be entitled to or interested in policies of the business of the company, and shall in such manner as he thinks proper give notice to every such person of the value so ascertained, and every person to whom notice is so given shall be bound by the value so ascertained, unless he disputes the valuation in such manner and within such time as is prescribed by the Rules of Court, or as the Court in any particular case by order directs. Application of certain assets. Eng. Bill 1927, Cl. 17. 69.—(1.) In the winding-up of a company, the value of the liabilities and the value of the assets of a statutory fund of the company shall be ascertained separately from the value of any other liabilities or from the value of any other assets of the company, and no assets of the statutory fund shall be applied to the discharge of any liabilities other than those in respect of that statutory fund except in so far as those assets exceed the liabilities of that statutory fund. (2.) In the winding-up of a company, if, when the liabilities and assets of any statutory fund of the company have been ascertained, there is found to be a surplus of those assets over those liabilities, there shall be added to the liabilities of that statutory fund an amount equal to that proportion of the surplus so found as is equivalent to the proportion, if any, of the profits in the class or classes of life insurance business to which the statutory fund relates, allocated to shareholders and policy owners, which was allocated to policy owners during the ten years immediately preceding the commencement of the winding-up, and the assets of that statutory fund shall be deemed to exceed the liabilities of that statutory fund only in so far as those assets exceed those liabilities after that addition: Provided that, if it appears to the Court that, by reason of special circumstances, it would be inequitable that the amount specified should be added to the liabilities of any statutory fund, the amount to be added shall lie such amount as the Court directs. Liability of directors and officers. Eng. Bill 1927, Cl. 20. 70. If, in the course of the winding-up of a company, the Count is satisfied that the amount of any statutory fund has been diminished by reason of any contravention of the provisions of this Act, every person who at the time of the contravention was a director, the principal officer or an officer of the company, shall be deemed in respect of the contravention to have been guilty of misfeasance in relation to the company unless he proves that the contravention occurred without his knowledge and that he used all due diligence to prevent the contravention; and the Court may assess the sum by which the amount of the statutory fund has been diminished by reason of the misfeasance, and may order any person guilty of the misfeasance to contribute to the statutory fund the whole or any part of that sum by way of compensation. Application of deposits. No. 4, 1932, s. 22 (2). 71. Upon the winding-up of a company, all money and securities for the time being held by the Treasurer as a deposit in respect of that company shall be paid to the liquidator and shall be applied by him in accordance with the provisions of this Act in the discharge of the liabilities of the statutory fund of the company in respect of policies. Winding-up of part of business of company. Eng. Bill 1927, Cl. 18. 72.—(1.) If an order of the Court for the winding-up of part of the business of a company is made after the hearing of an application under section fifty-nine of this Act, or in pursuance of section sixty-four of this Act, a scheme for the purposes of that winding-up shall be prepared and submitted for the confirmation of the Court— (a) if the order is made after the hearing of an application under section fifty-nine of this Act—by the person who made the application; or (b) if the order is made in pursuance of section sixty-four of this Act—by the judicial manager appointed in respect of the company. (2.) Any scheme prepared under this section shall provide for the allocation and distribution of the assets and liabilities of the company between any classes of business affected (including the allocation of any surplus assets which may arise on the proposed winding-up), for any future rights of every class of policy owners in respect of their policies, and for the manner of winding-up any of the business of the company which is proposed to be wound up, and may contain such provisions as are expedient for giving effect to the scheme. (3.) The provisions of sections sixty-seven, sixty-eight, sixty-nine, seventy and seventy-one of this Act shall apply, with such alterations as are necessary, in a winding-up in accordance with a scheme under this section.