New Cap Reinsurance Corporation Ltd (in liq) v A E Grant & Ors [2008] NSWSC 1015

Reported Decision : 221 FLR 164

New South Wales Supreme Court

CITATION : New Cap Reinsurance Corporation Ltd (in liq) v A E Grant & Ors [2008] NSWSC 1015

HEARING DATE(S) : 20 and 22 February 2008 and written submissions

JUDGMENT DATE : 30 September 2008

JURISDICTION : Equity

JUDGMENT OF : White J

DECISION : Refer to para 114 of judgment.

CATCHWORDS : CORPORATIONS – insurance company – definition of insolvency – whether insurance liabilities are debts within the meaning of s 95A - whether a liability to pay unliquidated damages is a debt within the meaning of s 95A – conflict of authority – bound to hold that liability to pay unliquidated damages is not a debt within the meaning of s 95A – contingent debts within s 95A even where s 459D does not apply - CONTRACT – reinsurance policies - indemnity – nature of liability under an indemnity – whether always a liability to pay unliquidated damages for failure to protect indemnified party from loss – indemnity in respect of paid losses in respect of a quantified sum – in certain circumstances the pre-Judicature Acts remedy was on a common count for money paid rather than damages – liability lies in debt - CORPORATIONS – solvency – use of hindsight to value insurance liabilities – insurance liabilities were debts within meaning of s 95A – reinsurer insolvent

Corporations Act 2001 (Cth) Insolvency Act 1874 (Qld) LEGISLATION CITED : Bankruptcy Act 1966 (Cth) Companies Act 1961 (Cth) Life Insurance Act 1945-1950 (Cth)

CATEGORY : Principal judgment

New Cap Reinsurance Corporation Ltd (in liq) & Anor v Renaissance Reinsurance Ltd [2002] NSWSC 856; (2002) 192 ALR 601; 43 ACSR 65 Keith Smith East West Transport Pty Ltd (in liq) v Australian Taxation Office [2002] NSWCA 264; (2002) 42 ACSR 501 Bank of Australasia v Hall (1907) 4 CLR 1514 Lewis (as liquidator of Doran Constructions Pty Ltd) v Doran [2005] NSWCA 243; (2005) 219 ALR 555; 54 ACSR 410; 23 ACLC 1666 Brooks v Heritage Hotel Adelaide Pty Ltd (1996) 20 ACSR 61 Re Kolback Group Ltd (1991) 4 ACSR 165 Lewis v Doran [2004] NSWSC 608; (2004) 208 ALR 385; 184 FLR 454; 50 ACSR 175; 22 ACLC 1009 Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation [2001] NSWSC 621; (2001) 53 NSWLR 213 Re Paine; Ex parte Read [1897] 1 QB 122 In re Blackpool Motorcar Co Ltd; Hamilton v Blackpool Motorcar Co Ltd (1901) 1 Ch 77 Box Valley Pty Ltd v Kidd [2006] NSWCA 26; (2006) 24 ACLC 471 Shephard v Australia & New Zealand Banking Corporation Ltd (1996) 41 NSWLR 431; (1997) 15 ACLC 1802 Shepherd v Australia & New Zealand Banking Group (1996) 14 ACLC 987 Hawkins v Bank of China (1992) 26 NSWLR 562 Insurance Commissioner v Associate Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 In re London & Manchester Industrial Association (1875) 1 Ch D 466 Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 Miliangos v George Frank (Textiles) Ltd [1976] AC 443 Pettigrew v Commissioner of Taxation for the Commonwealth (1989) 89 ATC 4475; 20 ATR 625 Expo International Pty Ltd (in liq) v Chant [1979] 2 NSWLR 820 Community Development Pty Ltd v Engwirda Construction Co (1969) 120 CLR 455 Edwards v Attorney General [2004] NSWCA 272; (2004) 60 NSWLR 667 Chief Commissioner of State Revenue v Reliance Financial Services Pty Ltd [2006] NSWSC 1017 Commissioner of Taxation of the Commonwealth of Australia v Simionato Holdings Pty Ltd (1997) 15 ACLC 477 Re Glendale Land Development Ltd (In liq) [1982] 2 NSWLR 563 CASES CITED : Re PMC Investments Pty Ltd (1991) 9 ACLC 1559 Markisic v Commonwealth of Australia [2007] NSWCA 92; (2007) 69 NSWLR 737 Alexander v Ajax Insurance Co Ltd [1956] VLR 436 Grant v Royal Exchange Assurance Co (1816) 5 M & S 439; 105 ER 1111 Castelli v Boddington (1852) 1 El & Bl 66; 118 ER 361 Luckie v Bushby (1853) 13 CB 864; 138 ER 1443 E Pellas & Co v Neptune Marine Insurance Co (1879) 5 CPD 34 Randall v Lithgow (1884) 12 QBD 525 Swan v Maritime Insurance Company [1907] 1 KB 116 Baker v Adam (1910) 15 Com Cas 227; [1908-10] All ER Rep 632; 102 LT 248 William Pickersgill & Sons Ltd v London & Provincial Marine & General Insurance Co Ltd [1912] 3 KB 614 Israelson v Dawson [1933] 1 KB 301 Jabbour v Custodian of Absentees Property of State of Israel [1954] 1 All ER 145 Chandris v Argo Insurance Co Ltd [1963] 2 Lloyd's Rep 65 Phoenix General Insurance Co of Greece SA v Halvanon Insurance Co Ltd [1985] 2 Lloyd's Rep 599 Edmunds v Lloyd Italico e L'Ancora Cia di Assicurazioni e Riassicurazioni SpA [1986] 2 All ER 249 Hartogen Energy Ltd v Cowley (Supreme Court of NSW, Rogers CJ Comm D, 27 July 1989, unreported BC8901911) Council of the City of Penrith v Government Insurance Office (1991) 24 NSWLR 564 Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415; (2000) 23 WAR 159 Odyssey Re (Bermuda) v Reinsurance Australia [2001] NSWSC 266; (2001) 19 ACLC 987 Israelson v Dawson [1933] 1 KB 301 Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd [2007] NSWSC 103; (2007) 61 ACSR 321 Jervis v Harris [1996] Ch 195 Australian Securities and Investments Commission v Edwards [2005] NSWSC 831; (2005) 220 ALR 148; 54 ACSR 583 Firma C-Trade SA v Newcastle Protection and Indemnity Association [1991] 2 AC 1 Hutchinson v Sydney (1854) 10 Exch 438; 156 ER 508 In re Richardson [1911] 2 KB 705