HIH Casualty [2007] NSWSC 741

New South Wales Supreme Court

CITATION : HIH Casualty [2007] NSWSC 741 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 2nd July 2007 JUDGMENT OF : Hammerschlag J

EX TEMPORE JUDGMENT DATE : 2 July 2007

DECISION : Approval granted

CATCHWORDS : WINDING UP - Liquidator's powers - approval sought to enter into new lease and fit-out agreement - where terms will be discharged by performance more than 3 months after agreements entered into - s477(2B) Corporations Act 2001

LEGISLATION CITED : Corporations Act 2001

CASES CITED : Re HIH Insurance Limited and related matters (2004) NSWSC 5

PARTIES : HIH Casualty and General Insurance Limited (in liquidation) ACN 008 482 291

FILE NUMBER(S) : SC 01810/2001

COUNSEL : G. Scarcella (Solicitor)

SOLICITORS : Blake Dawson Waldron

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

HAMMERSCHLAG J

2 JULY 2007

01810/2001 HIH CASUALTY AND GENERAL INSURANCE LIMITED (IN LIQUIDATION) ACN 008 482 291 JUDGMENT 1 HIS HONOUR: By interlocutory application dated 20 June 2007 the applicants, being the liquidators of HIH Casualty & General Insurance Company (In Liquidation), seek leave pursuant to section 477(2B) of the Corporations Act 2001 to enter into new leases over levels 1 and 2, 117 Clarence Street, Sydney and, to enter into a related fit-out agreement. The counterparty to the proposed transaction is AMP. The liquidators require leave because the obligations they will incur will according to the terms of the proposed agreements be discharged by performance more than three months after they are entered into. Under the section a liquidator may not enter into an agreement with that attribute, except with leave of the Court. 2 On the application the affidavit of Christopher John Honey of 20 June 2007 was read. 3 In Re HIH Insurance Limited and related matters (2004), NSWSC 5 at paragraph 15, Barrett J held that the Court's assessment of whether approval should be granted pursuant to section 477(2B) is to be made in light of the purpose for which a liquidator's powers exist. One overriding purpose is to serve the interests of those concerned in the winding up. The other is to do whatever needs to be done for the proper realisation of the assets of the company or to assist its winding up. As his Honour said, the Court does not concern itself with the commercial desirability of a transaction. 4 In his affidavit, Mr Honey details the course of dealings with respect to the proposed agreements. The premises are to be used to house teams involved in and occupied with the administration of the winding up of the HIH group of companies. Their functions are essential to the ongoing and orderly conduct of the winding up of the HIH group for the benefit of its creditors. The liquidators have formed the view that the terms of the agreements which have been offered by AMP are acceptable and that the entry into the transactions is for the benefit of the creditors. 5 In the circumstances I am satisfied that it is appropriate that approval be granted, as sought in the interlocutory process, and I accordingly make the orders set out in the document entitled "Order" which is initialled by me, dated today's date and placed with the papers. 6 The orders may be entered forthwith. **********