In the matter of HIH Insurance Limited (in liquidation);; In the matter of HIH Underwriting & Agency Services Limited (in liquidation);; In the matter of CIC Insurance Limited;; In the matter of FAI General Insurance Company Limited;; In the matter of Christopher John Honey and Anthony Gregory McGrath – in their capacity as liquidators of HIH Underwriting and Insurance (Australia) Pty Limited (in liquidation);; In the matter of HIH Underwriting & Insurance (Australia) Pty Limited;; In the matter of FAI Insurances Limited;; In the matter of HIH Insurance Limited (in liquidation);; In the matter of HIH Holdings Pty Limited [2020] NSWSC 803
Upon the retirement of one of two co-liquidators in ongoing court-appointed liquidations commenced before 1 September 2017, but where the vacancy arises after that date, the Court has jurisdiction and power under the current Corporations Act provisions—sections 473A, 90-15 of the Insolvency Practice Schedule, and related transitional provisions—to appoint a replacement liquidator. The Court may also grant leave for liquidators to act as scheme administrators and dispense with otherwise mandatory statutory reporting where it serves no practical purpose and would simply waste expense in long-running, mature liquidations in the interests of an efficient and economic winding up.
- Parties
- First Applicant: Anthony Gregory McGrath; First Applicant: Jason Preston; Second Applicant: HIH Insurance Limited (in liquidation); Second Applicant: HIH Underwriting and Agency Services Limited (in liquidation); Second Applicant: HIH Holdings Pty Limited (in liquidation); Second Applicant: HIH Investment Holdings Limited (in liquidation); Second Applicant: FAI Insurances Limited (in liquidation); Second Applicant: HIH Underwriting and Insurance (Australia) Pty Limited (in liquidation); Second Applicant: CIC Insurance Limited (in liquidation and subject to a scheme of arrangement); Second Applicant: FAI General Insurance Company Ltd (in liquidation and subject to a scheme of arrangement); Second Applicant: HIH Casualty and General Insurance Limited (in liquidation and subject to a scheme of arrangement)
- Jurisdiction
- Australia
- Judgment Date
- 26 June 2020
- Procedural Posture
- Application / Final Orders on Applications in a Long Running Liquidation
- Outcome
- Orders made for appointment of replacement liquidator (Katherine Sozou) upon retirement of Anthony Gregory McGrath, dispensation of statutory reporting requirement, granting of leave for dual role appointments, and for costs to be paid as an expense of winding up.
- Legal Topics
- Liquidator Replacement, Schemes of Arrangement, Dispensation of Statutory Reporting, Transitional Provisions, Leave for Dual Roles
Case Brief
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Parties
Anthony Gregory McGrath
First Applicant
Jason Preston
First Applicant
HIH Insurance Limited (in liquidation)
Second Applicant
HIH Underwriting and Agency Services Limited (in liquidation)
Second Applicant
HIH Holdings Pty Limited (in liquidation)
Second Applicant
HIH Investment Holdings Limited (in liquidation)
Second Applicant
FAI Insurances Limited (in liquidation)
Second Applicant
HIH Underwriting and Insurance (Australia) Pty Limited (in liquidation)
Second Applicant
CIC Insurance Limited (in liquidation and subject to a scheme of arrangement)
Second Applicant
FAI General Insurance Company Ltd (in liquidation and subject to a scheme of arrangement)
Second Applicant
HIH Casualty and General Insurance Limited (in liquidation and subject to a scheme of arrangement)
Second Applicant
Procedural Posture
Application / Final Orders on Applications in a Long Running Liquidation
Legal Issues
- 1 Whether the Court has power to appoint a replacement liquidator when one co-liquidator retires under the current and former Corporations Act regime
- 2 Whether statutory reporting requirements should be dispensed with for replacement liquidator appointments in long-running liquidations
- 3 Whether leave should be granted for liquidators to also act as scheme administrators under s 411(7) and s 532(2)(c)(i) of the Corporations Act
Ratio Decidendi
Upon the retirement of one of two co-liquidators in ongoing court-appointed liquidations commenced before 1 September 2017, but where the vacancy arises after that date, the Court has jurisdiction and power under the current Corporations Act provisions—sections 473A, 90-15 of the Insolvency Practice Schedule, and related transitional provisions—to appoint a replacement liquidator. The Court may also grant leave for liquidators to act as scheme administrators and dispense with otherwise mandatory statutory reporting where it serves no practical purpose and would simply waste expense in long-running, mature liquidations in the interests of an efficient and economic winding up.
Court Disposition
Orders made for appointment of replacement liquidator (Katherine Sozou) upon retirement of Anthony Gregory McGrath, dispensation of statutory reporting requirement, granting of leave for dual role appointments, and for costs to be paid as an expense of winding up.
Orders
- Upon the resignation of Anthony Gregory McGrath taking effect on 1 July 2020, Katherine Sozou be appointed as liquidator of all relevant HIH companies together with Jason Preston.
- Leave granted to Katherine Sozou to hold both positions of liquidator and scheme administrator.
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