AFG Insurances [2002] NSWSC 735

Reported Decision : (2002) 20 ACLC 1588

New South Wales Supreme Court

CITATION : AFG Insurances [2002] NSWSC 735 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4113/02 HEARING DATE(S) : 19/08/02, 20/08/02 JUDGMENT DATE : 20 August 2002

PARTIES : AFG Insurances Ltd - First Plaintiff Keiran Hutchison and John Raymond Gibbons - Second Plaintiffs JUDGMENT OF : Barrett J

COUNSEL : Mr D R Pritchard - Plaintiffs SOLICITORS : Henry Davis York - Plaintiffs CATCHWORDS : CORPORATIONS - voluntary administration - application for letter of request to English court - whether "external administration matter" - whether "insolvency" - whether approrpriate to seek orders of English Court issuing general and undirected commands Corporations Act 2001 (Cth) LEGISLATION CITED : Corporations Regulations 2001 (Cth) Insolvency Act 1986 (UK) Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270 Re Dallhold Estates (UK) Pty Ltd (1991) 6 ACSR 378 Re Dallhold Estates (UK) Pty Ltd [1992] BCLC 621 CASES CITED : Dick v McIntosh [2001] FCA 1008 Joye v Beach Petroleum NL (1996) 67 FCR 275 Re New Cap Reinsurance Corporation Holdings Ltd (1999) 32 ACSR 234 Official Trustee in Bankruptcy v Lyons (2000) 104 FCR 486 DECISION : Originating process dismissed

- 11 - IN THE SUPREME COURT REVISED OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

20 AUGUST 2002

4113/02 - AFG INSURANCES LTD

JUDGMENT

1 I heard yesterday afternoon an application by Mr Hutchison and Mr Gibbons, whom I call "the applicants", for the issue by the court of a letter of request directed to the High Court of Justice in England seeking the making of certain orders by that court. 2 The applicants are the administrators of AFG Insurances Limited ("AFG"), having been appointed pursuant to Pt 5.3A of the Corporations Act 2001 (Cth) by a resolution of directors passed on 14 August 2002. The minutes of the meeting of directors at which the resolution was passed are in evidence. They record that all directors were present at the meeting and that a statement of the financial position of the company as at 31 July 2002 was tabled. The following resolutions are then recorded as having been passed: "IT WAS RESOLVED that, after examining the most recent statement of financial position, as presented to the meeting: (a) the directors have formed the opinion that AFG is either insolvent or is likely to become insolvent at some future time; and (b) Administrators of AFG should be appointed. IT WAS RESOLVED that John R Gibbons and Keiran W Hutchison, who have consented to act as Administrators, are hereby appointed as Joint and Several Administrators of AFG." The statement of financial position as at 31 July 2002 is not in evidence. 3 Following their appointment as administrators, the applicants gave notice to creditors convening the meeting of creditors called for by s.436E of the Corporations Act. That meeting is to be held at 6pm today, Sydney time, at an address in London where it will be 9am on the same day. The decision to hold the meeting in London with a facility for persons in Sydney to participate by way of conference call was prompted by regulation 5.6.14 of the Corporations Regulations 2001 which directs attention to the convenience of the majority of persons entitled to receive notice. 4 The applicants take the view, which is consistent with the evidence before me, that most of the creditors are in London or, at any rate, better able to attend in London than in Sydney. AFG is an insurance company which ceased writing new business in the 1980's and has been in run off mode since then. Its remaining assets and liabilities are centred largely on the London market. 5 Before turning to the substance of the application, I should deal with the question of jurisdiction. 6 The application is founded mainly on s.581(4) of the Corporations Act which empowers the court to request a foreign court to act in aid of and to be auxiliary to this court in an external administration matter. The section is in the following terms: "The Court may request a court of an excluded Territory, or a country other than Australia, that has jurisdiction in external administration matters to act in aid of, and be auxiliary to, it in an external administration matter." 7 It is, therefore, necessary to decide whether there exists here an "external administration matter". That expression is defined by s.580(1) as follows: " 'external administration matter' means a matter relating to: (a) winding up, under this Chapter, a company or a Part 5.7 body; (b) winding up, outside Australia, a body corporate or a Part 5.7 body; or (c) the insolvency of a body corporate or of a Part 5.7 body;"