McGrath & Ors re HIH Insurance Ltd (In Liq) [2004] NSWSC 143

New South Wales Supreme Court

CITATION : McGrath & Ors re HIH Insurance Ltd (In Liq) [2004] NSWSC 143 HEARING DATE(S) : 05/03/04 JUDGMENT DATE : 5 March 2004

JURISDICTION: Equity Division Corporations List JUDGMENT OF : Barrett J DECISION : Limitation period extended

CATCHWORDS : CORPORATIONS - proceedings challenging voidable transactions - extension of limitation period - ex parte application but with consent of person affected LEGISLATION CITED : Corporations Act 2001 (Cth), s.588FF(3)(b) CASES CITED : BP Australia Ltd v Brown (2003) 46 ACSR 667 PARTIES : Anthony Gregory McGrath and Alexander Robert Mackay Macintosh as the joint liquidators of the HIH Companies - First to Nineteenth Plaintiffs HIH Insurance Limited (In Liquidation) & Ors - Second Plaintiffs FILE NUMBER(S) : SC 1790/04 COUNSEL : Mr M B Oakes SC - Plaintiffs Mr M J O'Meara, Solicitor - Hannover Ruckversicherungs AG SOLICITORS : Blake Dawson Waldron - Plaintiffs Minter Ellison - Hannover Ruckversicherungs AG

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

FRIDAY, 5 MARCH 2004

1790/04 – ANTHONY GREGORY McGRATH & ANOR re HIH INSURANCE LIMITED (IN LIQUIDATION) & ORS JUDGMENT 1 Leave is given to the plaintiffs to file in court an originating process in the form which I initial and date and the affidavit of Anthony Gregory McGrath sworn today. 2 By that originating process, the plaintiffs seek an order under s.588FF(3)(b) of the Corporations Act 2001 (Cth) extending the period of three years within which an application under s.588FF(1) may be made against Hannover Ruckversicherungs AG ("Hannover"). The application is confined to possible proceedings against that company and does not seek any form of general extension. I have said that it is the plaintiffs who make the application but technically, of course, it is only the first plaintiffs, Mr McGrath and Mr Macintosh, who are the applicants for such an order. They are the liquidators of each of the second to nineteenth plaintiffs and it is they, as such liquidators, who have standing under s.588FF(3)(b). 3 The period of three years referred to in s.588FF(3) will in each case expire on or about 15 March 2004. The application is made ex parte in the sense that no person is named as a defendant. In particular, Hannover is not named as a defendant. However the affidavit of Mr McGrath refers to a conversation between the solicitor for the liquidators and the solicitor for Hannover confirming Hannover's consent to making of the extension order now sought. To confirm that, Mr O'Meara of Minter Ellison, the solicitors for Hannover, has attended court this afternoon and has formally conveyed to the court Hannover's consent to the making of the order. 4 In BP Australia Ltd v Brown (2003) 46 ACSR 667, at paragraph 134, Spigelman CJ, with whom Mason P and Handley JA agreed, emphasised the great importance to be attached to a procedure which offers to a person likely to be adversely affected by an order for extension of time under s.588FF(3)(b) an opportunity of making submissions to the court before any such order is made. That matter was emphasised in a context where fundamental rules of procedural fairness were under discussion. Although the present application is framed in the way I have described, it is clear that the matter to which the Chief Justice attached such weight has been amply and adequately dealt with by the contact between the solicitors deposed to by Mr McGrath and, most significantly, by the presence in court this afternoon of Mr O'Meara for the express purpose of conveying the consent of Hannover. I should add, however, that Hannover's consent is limited to this particular application for an extension of time and is given entirely without any form of admission as to the validity of any claim that the liquidators may in due course see fit to pursue on the strength of the extension of the limitation period. 5 The extension sought is for a period of eight months from the filing of the application in court, that is to say, for eight months from today. In view of the consent of Hannover and the comprehensive explanation in Mr McGrath's affidavit of matters that have occupied the attention of the liquidators and have made it impracticable to act on the particular perceived or potential claims within the three year period, I am satisfied that the eight months extension should be granted. 6 I therefore make order 1 in the form of order which I now initial and date. 7 For the sake of good order, I also make nunc pro tunc an order under rule 2.13 of the Supreme Court (Corporations) Rules 1999 granting leave to Hannover to be heard on this application without becoming a party, thus clarifying the basis on which Hannover has been represented by Mr O'Meara before me today. **********