Re HIH Casualty and General Insurance Limited & Ors [2006] NSWSC 191

Re HIH Casualty and General Insurance Limited & Ors [2006] NSWSC 191

The effect of regulation 5.6.33 would be to prevent the chairman, who will also be the prospective scheme administrator and thus have an interest in remuneration, from voting proxies lodged by creditors. This would frustrate creditors' intentions and is unnecessary where the court will ultimately approve the scheme, and there is a history of no such constraint in prior schemes. The regulation should be disapplied in these circumstances.

Jurisdiction
Australia
Judgment Date
23 March 2006
Procedural Posture
Scheme of Arrangement, Corporations / Order Concerning Creditors' Meeting Procedures
Outcome
Order made disapplying regulations 5.6.33(1) and 5.6.34(e) for the meetings of 29 March 2006.
Legal Topics
['scheme of Arrangement' "creditors' Meetings" 'proxy Voting' "liquidators' Remuneration"]
['corporations Law' 'insolvency'] ['scheme of Arrangement' "creditors' Meetings" 'proxy Voting' "liquidators' Remuneration"]

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Procedural Posture

Scheme of Arrangement, Corporations / Order Concerning Creditors' Meeting Procedures

Legal Issues

  1. 1 ['Whether the court should disapply regulation 5.6.33(1) and 5.6.34(e) of the Corporations Regulations 2001 (Cth) for meetings convened under s.411(1) of the Corporations Act 2001 (Cth) so that the liquidators may vote proxies as chairman despite an interest in remuneration as scheme administrators.']

Ratio Decidendi

The effect of regulation 5.6.33 would be to prevent the chairman, who will also be the prospective scheme administrator and thus have an interest in remuneration, from voting proxies lodged by creditors. This would frustrate creditors' intentions and is unnecessary where the court will ultimately approve the scheme, and there is a history of no such constraint in prior schemes. The regulation should be disapplied in these circumstances.

Court Disposition

Order made disapplying regulations 5.6.33(1) and 5.6.34(e) for the meetings of 29 March 2006.

Orders

  • ['Subregulations 5.6.33(1) and 5.6.34(e) of the Corporations Regulations 2001 do not apply to the meetings referred to in Order 1 of the orders made herein on 22 November 2005.']