Wijeratne V. The China Mutual Life Insurance Company

Present : Bertram C.J. and Schneider A.J.    1920

WIJERATNE v. THE CHINA MUTUAL LIFE
INSURANCE COMPANY.

31-D. C. (Inty.) Colombo, 53,890

Interrogatories-Action for "profits" by a policy holder against insurance company-Application that insurance company should disclose profits-Liability of insurance company to pay profits should be established before the company is called upon to disclose profits.

By an insurance policy the defendant company undertook to give to the plaintiff, a policy holder, a share of the profits in addition to the amount for which he was insured. The policy expired in 1919, and, no profits having been declared for that year, the plaintiff was paid only the amount for which he was insured. The plaintiff sued the defendant company for a share of profits. The defendant company denied their liability to pay anything for profits. The plaintiff moved the Court to call upon the defendant company to disclose the amount of their profits.

Held, that the information sought for by the plaintiff was premature before the question of liability to pay was decided.

The Court cited, with approval, the dictum of Cotton L.J.: "The Court is always unwilling, before the right to relief is established, to make an order for discovery which may be injurious to the defendant, and will only be useful to the plaintiff if he succeeds in establishing his title to relief."

THE plaintiff sued the defendant company for the recovery of profits alleged to be due to him on a policy of insurance issued to him by the defendant company. The plaintiff estimated the profits due at Rs. 2,500 and prayed for judgment for that sum, or in the alternative for an accounting.

The defendant company pleaded in defence that no profits had been declared on the said policy and no sum was due to the plaintiff. The plaintiff administered the following interrogatories to the defendant:-

(1) What are the profits made by you during the years 1904-1919 inclusive ? Give each year's profits separately. Attach to your answer copies of the balance sheets and profit and loss account for each year.

(2) Is it the fact that your deed of settlement provides that at least 90 per cent of the profits of the company shall be distributed among policy holders ?

(3) Did you represent to the plaintiff that the profits on his policy would not be less than Rs. 2,500 ?

(4) What profits have you paid since 1904 to policy holders in Ceylon ? Attach to your answer a list of such payments.

(5) Is the following a correct statement of the method adopted by you for the distribution of profits: " The method of distribution provides for the allocation of the profits equitably as between policy holders under different plans and at varying ages. Profits are distributed on the deferred bonus plan, by which bonuses vest at the end of the deferred bonus period chosen, and, subsequently, at the expiry of periods of five years. In the case of endowment assurance policies, the deferred bonus period is taken as the full term of the policy in the absence of any expressed wish on the part of the policy holder for some other term. In the case of whole life policies, the deferred bonus period may be either five, ten, or twenty years, as desired by the assured."

(6) Did you adopt this method in the case of policy No. 21,040, which was held by Mr. Peter de Almeida ?

(7) What was paid by way of profits on the said policy No. 21,040 ?

(8) Did you in 1904 represent to Mr. C. M. Leitan of Negombo that the profits on his policy for Rs. 1,000 maturing in twenty years would amount to Rs. 800 ?

(9) Are the premiums in the case of policies with profits higher than those without profits ?

(10) Do you say that it is within your discretion to declare or refrain from declaring profits on a policy issued by you on the footing that it is payable on maturity with profits ?

(11) When did you receive in Colombo the

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