In the matter of HIH Insurance Limited (in liq); In the matter of FAI General Insurance Company Ltd (in liquidation and subject to a scheme of arrangement); In the matter of HIH Casualty and General Insurance Limited (in liquidation and subject to schemes of arrangement) [2019] NSWSC 1873

In the matter of HIH Insurance Limited (in liq); In the matter of FAI General Insurance Company Ltd (in liquidation and subject to a scheme of arrangement); In the matter of HIH Casualty and General Insurance Limited (in liquidation and subject to schemes of arrangement) [2019] NSWSC 1873

The authority forms relied upon by the interested parties did not substantially comply with Form 550—owing to added matters outside the form’s requirements and, in later versions, provision for irrevocability rather than revocability. As a result, reg 5.6.70 of the Corporations Regulations did not oblige the liquidators to pay dividends in accordance with those directions. The liquidators were justified in effecting payment directly to shareholders recorded in the internal register and, where necessary, to ASIC as unclaimed money. Under the schemes of arrangement, scheme administrators retained discretion over the mode of payment, and the existence of directions in authority forms did not...

Jurisdiction
Australia
Judgment Date
20 December 2019
Procedural Posture
Corporations Winding Up Application for Directions / Interlocutory Application for Directions in Liquidation
Outcome
Orders made in the form sought by the liquidators. No order as to costs.
Legal Topics
['winding Up' 'directions to Liquidator' 'payment of Dividends' 'schemes of Arrangement' 'authority to Receive Payment']
['corporations Law' 'equity' 'insolvency'] ['winding Up' 'directions to Liquidator' 'payment of Dividends' 'schemes of Arrangement' 'authority to Receive Payment']

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 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Corporations Winding Up Application for Directions / Interlocutory Application for Directions in Liquidation

Legal Issues

  1. 1 ['Whether authority forms provided to liquidators by interested parties substantially comply with Form 550 and bind the liquidators under reg 5.6.70 of the Corporations Regulations 2001 (Cth)' 'Whether the liquidators are justified in making payments to shareholders directly or must pay per the directions in authority forms' 'Whether clause 39.1 of the schemes of arrangement obliges payment according to directions given in authority forms']

Ratio Decidendi

The authority forms relied upon by the interested parties did not substantially comply with Form 550—owing to added matters outside the form’s requirements and, in later versions, provision for irrevocability rather than revocability. As a result, reg 5.6.70 of the Corporations Regulations did not oblige the liquidators to pay dividends in accordance with those directions. The liquidators were justified in effecting payment directly to shareholders recorded in the internal register and, where necessary, to ASIC as unclaimed money. Under the schemes of arrangement, scheme administrators retained discretion over the mode of payment, and the existence of directions in authority forms did not...

Court Disposition

Orders made in the form sought by the liquidators. No order as to costs.

Orders

  • ['Directions granted that liquidators are justified in making payments directly to shareholders as recorded, subject to specified qualifications.' 'Directions granted to allow payment of unclaimed dividends to ASIC in specified circumstances.' 'No order as to costs for interested parties appearing under r 2.13 of...