In the matter of Banksia Securities Limited (in liquidation) (receivers and managers appointed) [2018] NSWSC 629

In the matter of Banksia Securities Limited (in liquidation) (receivers and managers appointed) [2018] NSWSC 629

The Special Purpose Receivers are justified in settling BSL's claims against the Channel Syndicate and AmTrust Syndicates Ltd because their view, based on comprehensive legal advice and analysis, is that the Policy does not respond to the relevant claims, the claims against the Underwriters would likely fail, and settlement avoids significant exposure to adverse costs. The Court has jurisdiction under s 283HB of the Corporations Act 2001 (Cth) to give directions approving the settlement and the reasonableness of their decision.

Parties
Plaintiff: The Trust Company (Nominees) Limited; Special Purpose Receiver (applicant): John Ross Lindholm; Special Purpose Receiver (applicant): Peter Damien McCluskey
Jurisdiction
Australia
Judgment Date
08 May 2018
Procedural Posture
Interlocutory Application / Application for Directions Regarding Power to Settle Claims
Outcome
Application granted; directions given
Legal Topics
Receiver's Powers and Duties, Directions to Court Appointed Receivers, Settlement Approvals, Insurance Coverage, Debenture Holders' Interests
Corporations Law Equity Receiver's Powers and Duties Directions to Court Appointed Receivers Settlement Approvals Insurance Coverage Debenture Holders' Interests

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Parties

The Trust Company (Nominees) Limited

Plaintiff

John Ross Lindholm

Special Purpose Receiver (applicant)

Peter Damien McCluskey

Special Purpose Receiver (applicant)

Procedural Posture

Interlocutory Application / Application for Directions Regarding Power to Settle Claims

Legal Issues

  1. 1 Whether the Special Purpose Receivers have the power to settle claims made by BSL against the Underwriters in the Bolitho proceedings
  2. 2 Whether the Court has jurisdiction under s 283HB of the Corporations Act 2001 (Cth) or s 67 of the Supreme Court Act 1970 (NSW) to give such directions
  3. 3 Whether the proposed settlement is within the class of questions on which receivers may seek directions

Ratio Decidendi

The Special Purpose Receivers are justified in settling BSL's claims against the Channel Syndicate and AmTrust Syndicates Ltd because their view, based on comprehensive legal advice and analysis, is that the Policy does not respond to the relevant claims, the claims against the Underwriters would likely fail, and settlement avoids significant exposure to adverse costs. The Court has jurisdiction under s 283HB of the Corporations Act 2001 (Cth) to give directions approving the settlement and the reasonableness of their decision.

Court Disposition

Application granted; directions given

Orders

  • The Special Purpose Receivers have the power to settle the claims made by BSL against The Channel Syndicate and AmTrust Syndicates Ltd for and on behalf of Syndicate 1206 at Lloyd's of London in Supreme Court of Victoria proceedings No S Cl 2012 7185 on the terms set out in the Settlement Deed.
  • The Special Purpose Receivers are justified in causing BSL to settle its claims against Channel and AmTrust in the Bolitho proceedings on the terms set out in the Settlement Deed.