Re HIH Casualty and General Insurance Limited & Ors [2006] NSWSC 6

Re HIH Casualty and General Insurance Limited & Ors [2006] NSWSC 6

The creditors Amaca/Amaba and Hazelwood/Latrobe, though not parties, played a materially significant and independent role as contradictors in reformulating the scheme of arrangement and providing essential submissions on complex statutory issues. The exceptional circumstances and their meaningful contribution justify, in this case, the Court's exercise of discretion to award them their costs on a shared basis, despite the default expectation that non-parties do not receive costs orders.

Parties
First Plaintiffs: HIH Casualty & General Insurance Limited, FAI General Insurance Company Limited, CIC Insurance Limited, World Marine & General Insurances Pty Limited, FAI Traders Insurance Company Pty Limited, FAI Reinsurances Pty Limited, FAI Insurances Limited, HIH Underwriting and Insurance (Australia) Pty Limited; Second Plaintiffs (liquidators): Anthony Gregory McGrath and Alexander Robert Mackay Macintosh; Amicus Curiae: Australian Securities and Investments Commission; Entities Granted Leave Under Rule 2.13 to Be Heard (creditors): Amaca Pty Limited and Amaba Pty Limited; Entities Granted Leave Under Rule 2.13 to Be Heard (creditors): Hazelwood Power Partnership and La Trobe Power Partnership
Jurisdiction
Australia
Judgment Date
31 January 2006
Procedural Posture
Corporations Proceedings (applications by Liquidators for Scheme of Arrangement) / Post Convening Orders; Determination of Costs Following Order for Meetings of Creditors
Outcome
Plaintiffs ordered to pay one-half of the costs of Amaca Pty Ltd and Amaba Pty Ltd, and one-half of the costs of Hazelwood Power Partnership and La Trobe Power Partnership, such costs to be assessed and payable forthwith and to be an expense of the windings up of the first plaintiffs.
Legal Topics
Schemes of Arrangement, Leave for Creditors to Be Heard, Costs in Corporate Insolvency, Powers of Non Party Appearance
Corporations Law Insolvency Law Civil Procedure Schemes of Arrangement Leave for Creditors to Be Heard Costs in Corporate Insolvency Powers of Non Party Appearance

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 13 Party arguments 2
Sign in to unlock

Parties

HIH Casualty & General Insurance Limited, FAI General Insurance Company Limited, CIC Insurance Limited, World Marine & General Insurances Pty Limited, FAI Traders Insurance Company Pty Limited, FAI Reinsurances Pty Limited, FAI Insurances Limited, HIH Underwriting and Insurance (Australia) Pty Limited

First Plaintiffs

Anthony Gregory McGrath and Alexander Robert Mackay Macintosh

Second Plaintiffs (liquidators)

Australian Securities and Investments Commission

Amicus Curiae

Amaca Pty Limited and Amaba Pty Limited

Entities Granted Leave Under Rule 2.13 to Be Heard (creditors)

Hazelwood Power Partnership and La Trobe Power Partnership

Entities Granted Leave Under Rule 2.13 to Be Heard (creditors)

Procedural Posture

Corporations Proceedings (applications by Liquidators for Scheme of Arrangement) / Post Convening Orders; Determination of Costs Following Order for Meetings of Creditors

Legal Issues

  1. 1 Whether non-party creditors granted leave to be heard are entitled to a costs order against the applicant companies in a scheme of arrangement application when their submissions materially contributed to the result;
  2. 2 The extent of the Court's power to grant costs to non-parties under the Supreme Court (Corporations) Rules and the Civil Procedure Act 2005.

Ratio Decidendi

The creditors Amaca/Amaba and Hazelwood/Latrobe, though not parties, played a materially significant and independent role as contradictors in reformulating the scheme of arrangement and providing essential submissions on complex statutory issues. The exceptional circumstances and their meaningful contribution justify, in this case, the Court's exercise of discretion to award them their costs on a shared basis, despite the default expectation that non-parties do not receive costs orders.

Court Disposition

Plaintiffs ordered to pay one-half of the costs of Amaca Pty Ltd and Amaba Pty Ltd, and one-half of the costs of Hazelwood Power Partnership and La Trobe Power Partnership, such costs to be assessed and payable forthwith and to be an expense of the windings up of the first plaintiffs.

Orders

  • The first plaintiffs to pay one-half of the costs of Amaca Pty Ltd and Amaba Pty Ltd as if they had together been a single defendant, such costs to be assessed and payable forthwith and to be an expense of the windings up of the first plaintiffs.
  • The first plaintiffs to pay one-half of the costs of Hazelwood Power Partnership and Latrobe Power Partnership as if they had together been a single defendant, such costs to be assessed and payable forthwith and to be an expense of the windings up of the first plaintiffs.