New Cap Reinsurance v Faraday Underwriting [2003] NSWSC 842

47 ACSR 306 Reported Decision : (2003) 12 ANZ Insurance Cases 61-581 (2003) 21 ACLC 1626

New South Wales Supreme Court

CITATION : New Cap Reinsurance v Faraday Underwriting [2003] NSWSC 842 revised - 03/10/2003 HEARING DATE(S) : 17, 18, 19, 20 June 2003 and 4 September 2003 JUDGMENT DATE : 12 September 2003 JURISDICTION: Equity Division JUDGMENT OF : Windeyer J at 1 DECISION : Declarations and directions to be made in accordance with judgment.

CATCHWORDS : CORPORATIONS - Liquidators - winding up of reinsurance company - priority of claims under Insurance Act 1973 and Corporations Law and Corporations Act - whether s116(3) of Insurance Act subject to direct or implied repeal by Corporations Act - whether priority rights under Insurance Act rights or obligations under s8 of Acts Interpretation Act 1901 (Cth) - whether rights to be determined at commencement of winding up CORPORATIONS - rights of creditors - application of and construction of s562A of the Corporations Act - interaction between that section and s116(3) of the Insurance Act - CORPORATIONS - Liquidators - costs and expenses of liquidation - out of which funds payable - INSURANCE - insurance companies insolvent insurance company subject to winding up - priorities under s 116(3) of Insurance Act 1973 - whether repeal and renactment of s116 operated to bear on existing rights and obligations - whether contrary intention expressed by amending Act - meaning of liabilities in Australia under s116(3) and s31 of the Insurance Act Acts Interpretation Act 1901 (Cth) s8, s8A, s15AA Commonwealth of Australia Constitution Act, s109 Companies Act 1928 (Vic) s448 Corporate Law Reform Bill LEGISLATION CITED : Corporate Law Reform Act 1992 Corporations Act 2001 (Cth) s562A Corporations Law s447, s513, s554, s555, s556, s562, s562A, s588 General Insurance Reform Act 2001 Sch 2 Insurance Act 1973 s 31, s116 Lugano Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1988, s3 Agnew v Länsförsäkringsbolagens AB [2001] 1 AC 223 Banco de Portugal v Waddell (1880) 5 App Cas 161 Butterell v The Douglas Group Pty Limited (2000) 35 ACSR 398 Cambridge Credit Corporation Limited v Lissenden (1987) 8 NSWLR 411 Cleaver v Delta American Reinsurance Co [2001] 2 AC 328 Ex Parte Coote (1949) 48 SR(NSW) 179 Fisher v Madden (2002) 54 NSWLR 179 Fleet Motor & General Insurance Co (Australia) Pty Limited v Tickle [1984] 2 ACLC 282 Hague v Hague (No 2) (1965) 114 CLR 98 In Re Federal Building Assurance Co Limited [1932] VLR 301 In re E J Morel (1934) Limited [1962] 1 Ch 21 In re Northern Counties of England Fire Insurance Co (1880) 17 Ch D 337 In Re Oriental Steam Co (1874) LR 9 Ch App 557 In Re Russo - Asiatic Bank [1934] Ch 720 Jabbour v The Custodian of Israeli Absentee Property [1954] 1 WLR 139 Mathieson v Burton (1971) 124 CLR 1 CASES CITED : McCaughey v Commissioner of Stamp Duties (1945) 46 SR(NSW) 192 N A Kratzmann Pty Limited (in liquidation) v Tucker (No 2) (1968) 123 CLR 295 New York Life Insurance Company v The Public Trustee [1924] 2 Ch 101 Pace Tasmania Pty Ltd (in liquidation) v FAI General Insurance Company Ltd (Prov Liq Apptd) [2001] TASSC 112 Palmdale Insurance Limited (in liq) (No. 3) [1986] VR 439 Re Dominion Insurance Co of Australia Limited [1980] 1 NSWLR 271 Re Helbert Wagg & Co Limited [1956] Ch 323 Re National Employers Mutual General Insurance Association Limited (1995) 15 ACSR 624 Re NC Capital Limited (1999) 32 ACSR 418 Re Standard Insurance Company Limited [1968] QdR 118 Re Unit 2 Windows [1985] 1 WLR 1383 Re Universal Distributing Co Ltd (In Liquidation) (1933) 48 CLR 171 Saltergate Insurance Co Limited (No. 2) [1984] 3 NSWLR 389 SJP Formwork (Aust) Pty Limited (in liq) v Deputy Commissioner of Taxation (2000) 34 ACSR 604 Steinberg v Herbert (1988) 14 ACLR 80 Tolcher v National Australia Bank (2003) 44 ACSR 727 Wight & Ors v Eckhardt Marine GmBH [2003] UKPC 37 New Cap Reinsurance Corporation Limited (In Liquidation) (First Plaintiff) John Raymond Gibbons (As liquidator of the first plaintiff) (Second Plaintiff) PARTIES : Faraday Underwriting Limited (former "DP Mann Limited") (First Defendant) Gerling Global Reinsurance Company of Australia Pty Limited (Second Defendant) NC Re Capital Limited (In Liquidation) (Third Defendant) FILE NUMBER(S) : SC 6094 of 2001 Mr B Coles QC with him Mr D Robertson (Plaintiffs) Mr M Walton SC with him Mr P Whitford and Mr J Hogan-Doran (First Defendant) COUNSEL : Mr R B S Macfarlan QC with him Mr S A Goodman (Second Defendant) Mr S Epstein SC (Third Defendant) Mr M Aldridge SC - by leave to make submissions on behalf of Australian Prudential Regulatory Authority Henry Davis York (Plaintiffs) SOLICITORS : PricewaterhouseCoopers Legal (First Defendant) Clayton Utz (Second Defendant) Deacons (Third Defendant)