HIH Casualty & General Insurance Ltd & Ors v McMahon & Ors [2006] EWCA Civ 732 (09 June 2006)

HIH Casualty & General Insurance Ltd & Ors v McMahon & Ors [2006] EWCA Civ 732 (09 June 2006)

The English court has jurisdiction under Section 426 to assist a foreign court in insolvency matters, including the remission of assets, but will not direct the transfer of assets to a foreign liquidation if this would prejudice the rights of creditors under the English statutory scheme and there is no sufficient...

Source-derived case information.

Citation
[2006] EWCA Civ 732
Parties
Appellants: Anthony McGrath and Christopher Honey (as the joint liquidators appointed by the Supreme Court of New South Wales); Appellants: Amaca Pty Limited; Appellants: Amaba Pty Limited; Respondents: Anthony McMahon, Thomas Riddell and John Wardrop (as the joint provisional liquidators appointed by the High Court of Justice of England and Wales)
Jurisdiction
England and Wales
Judgment Date
09 June 2006
Procedural Posture
Appeal From High Court (chancery Division, Companies Court) / Court of Appeal (civil Division) Judgment
Outcome
Appeal dismissed
Legal Topics
Cross Border Insolvency, Schemes of Arrangement, Ancillary Liquidation, Distribution of Assets, Section 426 Insolvency Act 1986, Priority of Creditors, Remission of Assets, Insurance Company Insolvency
Insolvency Company Law Private International Law Cross Border Insolvency Schemes of Arrangement Ancillary Liquidation Distribution of Assets Section 426 Insolvency Act 1986 +3 more

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Parties

Anthony McGrath and Christopher Honey (as the joint liquidators appointed by the Supreme Court of New South Wales)

Appellants

Amaca Pty Limited

Appellants

Amaba Pty Limited

Appellants

Anthony McMahon, Thomas Riddell and John Wardrop (as the joint provisional liquidators appointed by the High Court of Justice of England and Wales)

Respondents

Procedural Posture

Appeal From High Court (chancery Division, Companies Court) / Court of Appeal (civil Division) Judgment

Legal Issues

  1. 1 Whether the English court can direct English provisional liquidators to remit assets to Australian liquidators for distribution under Australian law where the distribution regime differs from English law.
  2. 2 Whether Section 426 of the Insolvency Act 1986 authorises such a transfer in response to a letter of request from the Australian court.
  3. 3 Whether the existence of only provisional liquidation in England (not full winding up) affects the court's power or discretion.

Ratio Decidendi

The English court has jurisdiction under Section 426 to assist a foreign court in insolvency matters, including the remission of assets, but will not direct the transfer of assets to a foreign liquidation if this would prejudice the rights of creditors under the English statutory scheme and there is no sufficient countervailing advantage. The existence of only provisional liquidation in England does not alter this principle. The court must exercise its discretion, and the mere fact of a foreign request is not conclusive. In this case, remission of the English assets to Australia would materially prejudice certain classes of creditors and is not justified.

Court Disposition

Appeal dismissed

Orders

  • The English provisional liquidators are not to pay over to the Australian liquidators any sums collected or to be collected by them.
  • No extension of the powers of the English provisional liquidators to enable such payment.