Butterell v The Douglas Group Pty Ltd [2000] NSWSC 942

Butterell v The Douglas Group Pty Ltd [2000] NSWSC 942

Reinsurance proceeds received by the liquidator of CEASA are to be distributed on a policy-year basis among insurance creditors whose claims exceed $350,000 and were notified in that year, proportionately in accordance with s 562A(3) of the Corporations Law. The Seerys do not have standing under s 562A(4) as they are not persons to whom monies are payable under a relevant contract of insurance; their rights, if any, are under statute, not under the contract. Liquidator may deduct expenses incurred in getting in reinsurance funds, including overheads, but not general litigation costs.

Jurisdiction
Australia
Judgment Date
10 October 2000
Procedural Posture
Directions by Liquidator / Declaratory Relief / Judgment on Application for Directions and Cross Claims
Outcome
Declaratory relief and directions substantially as per reasons; parties to bring in short minutes for final orders.
Legal Topics
['winding Up' "liquidator's Directions" 'reinsurance Proceeds' 'statutory Charge Under Law Reform Act' 'declaratory Relief']
['corporations Law' 'insurance Law' 'insolvency'] ['winding Up' "liquidator's Directions" 'reinsurance Proceeds' 'statutory Charge Under Law Reform Act' 'declaratory Relief']

Case Brief

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Procedural Posture

Directions by Liquidator / Declaratory Relief / Judgment on Application for Directions and Cross Claims

Legal Issues

  1. 1 ['How reinsurance proceeds received by a liquidator should be distributed among insurance creditors of an insolvent mutual insurer under s 562A of the Corporations Law.' 'Whether the proceeds form a pool for all creditors, only those whose claims exceed $350,000, to particular claimants, or to policy year pools.' 'Whether the Seerys, as assignees of a judgment creditor, have a statutory charge or standing to make application regarding proceeds under s 562A(4).' 'Whether the liquidator may be indemnified from the proceeds for costs/expenses of administration.']

Ratio Decidendi

Reinsurance proceeds received by the liquidator of CEASA are to be distributed on a policy-year basis among insurance creditors whose claims exceed $350,000 and were notified in that year, proportionately in accordance with s 562A(3) of the Corporations Law. The Seerys do not have standing under s 562A(4) as they are not persons to whom monies are payable under a relevant contract of insurance; their rights, if any, are under statute, not under the contract. Liquidator may deduct expenses incurred in getting in reinsurance funds, including overheads, but not general litigation costs.

Court Disposition

Declaratory relief and directions substantially as per reasons; parties to bring in short minutes for final orders.

Orders

  • ['Declaration that reinsurance payments are to be distributed on a policy-year basis among claimants with claims over $350,000, notified within each relevant policy year.' 'Application by Seerys under s 562A(4) Corporations Law dismissed for lack of standing.' 'Costs of liquidator and first defendant to be paid from...