HIH Casualty & General and related matters [2001] NSWSC 1186

HIH Casualty & General and related matters [2001] NSWSC 1186

Approval of agreements with second application brokers is granted, as they entail payment and retention of moneys by insurers and do not breach Insurance (Agents and Brokers) Act 1984. Approval of agreements with first application brokers is refused, as retention of moneys by brokers would contravene s.27 of the Act, an offence which the court cannot disregard irrespective of perceived commercial advantages or public interest.

Parties
Applicant: World Marine & General Insurances Pty Ltd; Applicant: HIH Underwriting & Insurance (Australia) Pty Ltd; Applicant: CIC Insurance Ltd; Applicant: FAI General Insurance Company Ltd; Applicant: HIH Casualty & General Insurance Ltd; Applicant: FAI Reinsurances Pty Ltd; Applicant: HIH Underwriting & Agency Services Ltd; Interested Party: Marsh Pty Ltd; Interested Party: Heath Lambert Australia Pty Ltd; Interested Party: Jardine Lloyd Thompson Australia Pty Ltd
Jurisdiction
Australia
Judgment Date
19 December 2001
Procedural Posture
Interlocutory Application / Judgment on Approval of Agreements
Outcome
Orders: Approval of agreements with second application brokers granted; approval of agreements with first application brokers refused.
Legal Topics
Liquidators' Contracts, Statutory Compliance, Approval of Agreements, Duties of Brokers, Winding Up Procedures
Corporations Insurance Equity Liquidators' Contracts Statutory Compliance Approval of Agreements Duties of Brokers Winding Up Procedures

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Parties

World Marine & General Insurances Pty Ltd

Applicant

HIH Underwriting & Insurance (Australia) Pty Ltd

Applicant

CIC Insurance Ltd

Applicant

FAI General Insurance Company Ltd

Applicant

HIH Casualty & General Insurance Ltd

Applicant

FAI Reinsurances Pty Ltd

Applicant

HIH Underwriting & Agency Services Ltd

Applicant

Marsh Pty Ltd

Interested Party

Heath Lambert Australia Pty Ltd

Interested Party

Jardine Lloyd Thompson Australia Pty Ltd

Interested Party

Procedural Posture

Interlocutory Application / Judgment on Approval of Agreements

Legal Issues

  1. 1 Whether court can approve proposed agreements between liquidators and insurance brokers under s.477(2B) of the Corporations Act 2001
  2. 2 Whether performance of such agreements would entail statutory non-compliance under Insurance (Agents and Brokers) Act 1984
  3. 3 Whether brokers can retain premium moneys instead of paying to insurer under s.27 Insurance (Agents and Brokers) Act 1984

Ratio Decidendi

Approval of agreements with second application brokers is granted, as they entail payment and retention of moneys by insurers and do not breach Insurance (Agents and Brokers) Act 1984. Approval of agreements with first application brokers is refused, as retention of moneys by brokers would contravene s.27 of the Act, an offence which the court cannot disregard irrespective of perceived commercial advantages or public interest.

Court Disposition

Orders: Approval of agreements with second application brokers granted; approval of agreements with first application brokers refused.

Orders

  • Order, pursuant to s.477(2B) Corporations Act 2001, approving liquidators to enter agreements with 304 second application brokers named in annexure A.
  • Order dismissing amended interlocutory processes for agreements with Marsh Pty Ltd, Heath Lambert Australia Pty Ltd, Jardine Lloyd Thompson Pty Ltd.