New Cap Reinsurance Corp Ltd & Anor v Somerset Marine & Ors [2003] NSWSC 540

New South Wales Supreme Court

CITATION : New Cap Reinsurance Corp Ltd & Anor v Somerset Marine & Ors [2003] NSWSC 540 HEARING DATE(S) : 12/06/03 JUDGMENT DATE : 1 July 2003

JUDGMENT OF : Gzell J DECISION : Interlocutory process dismissed with costs

CATCHWORDS : CORPORATIONS - Winding Up - Unfair preferences - Reinsurance Treaties with non-resident reinsureds providing for payment by cash, escrow accounts or letters of credit - Letter of credit agreement between reinsurers and banks providing for reimbursement of payments under letters of credit - Collateral agreement between reinsurers and banks providing for lodgement of securities in advance of establishment of letters of credit and charge over securities - Letters of credit in favour of reinsureds by non-resident bank - Payment by non-resident bank to non-resident reinsureds - Application to set aside originating process by liquidator of reinsurer as disclosing no cause of action - Whether non-resident reinsureds were parties to a transaction resulting in payment under the letters of credit - Whether non-resident reinsureds recieved payment under the letters of credit from the reinsurer Corporations Act 2001 (Cth) LEGISLATION CITED : Supreme Court Rules 1970 Companies Code Bankruptcy Act 1966 (Cth) News Corporation Ltd v Lenfest Communications Inc (1996) 40 NSWLR 250 Dey v Victorian Railway Commissioners (1948-1949) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Agar v Hyde (2000) 201 CLR 552 Penthouse Publications Ltd v McWilliam (unreported 14 March 1991 CA(NSW)) Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628 Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1985) 1 NSWLR 545 Re Emanuel (No 14) Pty Ltd (in liquidation) (1997) 147 ALR 281 V R Dye & Co v Peninsula Hotels Pty Ltd (in liq) [1999] 3 VR 201 at 209 Re Lanpac International Pty Ltd (in liq) [1998] VSC 9 Mann v Sangria Pty Ltd (2001) 38 ACSR 307 Re Ruwaldt (1931) 3 ABC 245 CASES CITED : Re Smith (1933) 6 ABC 49 Re Lynch (1937) 9 ABC 210 Ramsay v National Australia Bank Ltd [1989] VR 59 Richardson v The Commercial Banking Co of Sydney Ltd (1951) 85 CLR 110 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 Sheahan v Carrier Air Conditioning Pty Ltd (1996-1997) 189 CLR 407 Wily v Bartercard Ltd (2000) 34 ACSR 186 Bartercard Ltd v Wily (2001) 39 ACSR 94 Burns v Stapleton (1959) 102 CLR 97 Re C G Monkhouse Pty Ltd (in liq) (1968) 69 SR (NSW) 429 Norfolk Plumbing Supplies Pty Ltd v Commonwealth Bank of Australia (1992) 6 ACSR 601 Walsh v Terranova Pty Ltd (1994) 14 ACSR 432 Macquarie Health Corporation Ltd v Federal Commissioner of Taxation (1999) 96 FCR 238 PARTIES : Somerset Marine Incorporated & Ors - Applicants/Defendants New Cap Reinsurance Corporation Limited (In Liquidation) & Anor - Respondent/Plaintiff FILE NUMBER(S) : SC 2372/02 COUNSEL : Mr N Hutley SC/Mr M Leeming-Applicants/Defendants Mr B Coles QC/Mr P Dowdy-Respondent/Plaintiff SOLICITORS : Henry Davis York Lawyers Hunt & Hunt Lawyers