HIH Casualty & General Insurance Ltd v Building Insurers' Guarantee Corporation [2003] NSWSC 1083

Reported Decision : (2004) 13 ANZ Insurance Cases 61-597 (2004) 22 ACLC 345

New South Wales Supreme Court

CITATION : HIH Casualty & General Insurance Ltd v Building Insurers' Guarantee Corporation [2003] NSWSC 1083 HEARING DATE(S) : 19/08/03, 20/8/03 JUDGMENT DATE : 26 November 2003

JURISDICTION: Equity Division Corporations List JUDGMENT OF : Barrett J DECISION : Originating process stood over for formulation of directions

CATCHWORDS : STATUTES - operation and effect of statutes - provisions of State and Territory Acts purporting to alter incidents of company winding up under Commonwealth Act - interpretation of provisions of Commonwealth Act as to interaction with State and Territory Acts - INSURANCE - reinsurance - application of proceeds of reinsurance - statutory regulation of insurers - CORPORATIONS - winding up - application of property and priority of claims - territorial quality of winding up process under Commonwealth law - impact of State and Territory laws - EQUITY - subrogation - whether third party compelled by law to meet insured loss upon reinsured risk is subrogated to insurer's right under reinsurance - whether equitable right to subrogation displaced by statutory right Australian Capital Territory (Self-Government) Act 1988 (Cth) Companies Act 1961 (Vic) Companies (Western Australia) Code Constitution of the Commonwealth of Australia Corporations Act 1989 (Cth) Corporations Act 2001 (Cth) Corporations (Consequential Amendments) Act (No 2) 2003 (WA) Corporations Law Corporations (New South Wales) Act 1990 (NSW) Corporations (Western Australia) Act 1990 (WA) Employers' Indemnity Supplementation Fund Act 1980 (WA) LEGISLATION CITED : General Insurance Reform Act 2001 (Cth) Home Building Act 1989 (NSW) Insurance Act 1973 (Cth) Insurance Protection Act 2001 (NSW) Insurance (Policyholders Protection) Legislation Amendment Act 2001 (NSW) Motor Accident Insurance Act 1994 (Qld) Motor Accidents Compensation Act 1999 (NSW) Work Health Act (NT) Workers Compensation Act 1987 (NSW) Workers Compensation Act 1958 (Vic) Workers Rehabilitation and Compensation Act 1988 (Tas) Workers Compensation Supplementation Fund Act 1980 (ACT) Workers Compensation (Acts of Terrorism) Amendment Act 2002 (ACT) Australian Securities and Investments Commission v Rowena Nominees Pty Ltd (2003) 45 ACSR 419 Butterell v Douglas Group Pty Ltd (2000) 35 ACSR 398 Director of Public Prosecutions v Loo (2002) 42 ACSR 459 Re Dominion Insurance Co of Australia Ltd [1980] 1 NSWLR 271 Re Crust 'n' Crumbs Bakers (Wholesale) Pty Ltd [1992] 2 QdR 76 In re Law Guarantee Trust and Accident Society [1915] 1 Ch 341 In re Harrington Motor Co Ltd; ex parte Chaplin [1928] 1 Ch 105 N A Kratzmann Pty Ltd v Tucker (No 2) (1968) 123 CLR 295 New Cap Reinsurance Corporation Ltd v Faraday Underwriting Ltd [2003] NSWSC 842 Nepean v Martin (1895) 11 TLR 256 New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469 CASES CITED : Northern Territory v GPAO (1999) 196 CLR 553 Omaha Indemnity Co v Carpenter and Australian Transport Insurance Pty Ltd (1987) 5 ANZ Ins Cas 60-831 Re Palmdale Insurance Ltd (No 3) [1986] VR 439 Public Service Association of New South Wales v Industrial Commission of New South Wales (1985) 1 NSWLR 627 R v Credit Tribunal; ex parte General Motors Acceptance Corporation Australia (1977) 137 CLR 545 Rose v Hvric (1963) 108 CLR 353 Skandia American Reinsurance Corporation v Schenk 441 F Supp 715 (1977) Tariff Reinsurances Ltd v Commissioner of Taxes (Victoria) (1938) 59 CLR 194 Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 University of Wollongong v Metwally (1984) 158 CLR 447 In re Usines de Melle and Firmin Boinot's Patent (1954) 91 CLR 42 Victoria v Commonwealth (1937) 58 CLR 618 HIH Casualty & General Insurance Limited (In Liquidation), FAI General Insurance Company Limited (In Liquidation), CIC Insurance Limited (In Liquidation), World Marine & General Insurances Pty Limited (In Liquidation), FAI Traders Insurance Company Pty Limited (In Liquidation), FAI Reinsurances Pty Limited (In Liquidation), HIH Underwriting & Insurance (Australia) Pty Limited (In Liquidation), HIH Underwriting & Agency Services Limited (In Liquidation), HIH Insurance Limited (In Liquidation), Lanlex No 65 Pty Limited (In Liquidation), FAI Leasing Finance Pty Limited (In Liquidation), FAI Insurances Limited (In Liquidation), FAI Investments Pty Ltd (In Liquidation), FAI Overseas Investments Pty Limited (In Liquidation), HIH Overseas Holdings Limited (In Liquidation), FAI Financial Services Limited (In Liquidation), FAI Overseas Holdings Pty Limited (In Liquidation), Hannan & Company Pty Limited (In Liquidation), Notestir Pty Limited (In Liquidation), First Mentor Group Pty Limited (In Liquidation), World Wide Weather Underwriting Agencies (Australia) Pty Limited (In Liquidation), HIH Investment Holdings Limited (In Liquidation), HIH Company Limited (In Liquidation), ACN 006 495 987 Pty Limited (In Liquidation) (formerly "Industrial Rehabilitation Services Pty Limited"), CIC General Insurance Holdings Ltd (In Liquidation), FAI Home Security Holdings Limited (In Liquidation), ACN 005 312 345 Pty Limited (In Liquidation) (formerly "Ready Plan Asia Pacific Pty Limited), FAI Film Distribution Pty Limited (In Liquidation), FAI Workers Compensation (Vic) Pty Limited (In Liquidation), HIH (Real Estate) Pty Limited (In Liquidation), Integrated Commercial Finance Pty Limited (In Liquidation), Innes Owens Pty Limited (In Liquidation), RiskCorp Australia Pty Limited (In Liquidation) - First Plaintiffs PARTIES : Anthony Gregory McGrath and Alexander Robert Mackay Macintosh - Second Plaintiffs Building Insurers' Guarantee Corporation - First Defendant Motor Accident Insurance Commission - Second Defendant FILE NUMBER(S) : SC 5353/02 Mr B A J Coles QC/Mr G Scarcella, Solicitor - Plaintiffs Mr S W Gibb SC/Mr C L Lonergan - First Defendant and Motor Accidents Authority of NSW COUNSEL : Mr A J L Ogborne - Second Defendant Mr A Robertson SC/Mr G B Carolan - Interested parties, ACT, NT, Vic and NSW WorkCover Mr M B Oakes SC/Mr M J Dawson - Amicus Curiae Blake Dawson Waldron - Plaintiffs SOLICITORS : I V Knight, Crown Solicitor - First Defendant Bain Gasteen by their City Agents Hicksons - Second Defendant