HIH Casualty & General Insurance Ltd & Ors v McMahon & Ors

HIH Casualty & General Insurance Ltd & Ors v McMahon & Ors

The English court has jurisdiction under s.426 Insolvency Act 1986 to consider a request to remit assets to foreign liquidators, but should not exercise its discretion to do so where such remission would prejudice the interests of creditors in England, except where there is a sufficient countervailing advantage or requirement of private international law. In this case, remission would prejudice all creditors except certain Australian insurance creditors, and no sufficient countervailing benefit was demonstrated. The absence of winding up orders in England does not alter this conclusion, as winding up is likely if schemes are not approved. The costs order was a matter of discretion and no...

Parties
Appellants (joint Liquidators Appointed by the Supreme Court of New South Wales): Anthony McGrath and Christopher Honey; Appellants (australian Insurance Creditors): Amaca Pty Limited and Amaba Pty Limited; Respondents (joint Provisional Liquidators Appointed by the High Court of Justice of England and Wales): Anthony McMahon, Thomas Riddell and John Wardrop
Jurisdiction
England and Wales
Judgment Date
09 June 2006
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division, Companies Court) to Court of Appeal
Outcome
All appeals dismissed
Legal Topics
Cross Border Insolvency, Schemes of Arrangement, Ancillary Liquidation, Distribution of Assets, Creditors' Rights, Comity, Statutory Interpretation
Insolvency Law Private International Law Company Law Cross Border Insolvency Schemes of Arrangement Ancillary Liquidation Distribution of Assets Creditors' Rights +2 more

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Parties

Anthony McGrath and Christopher Honey

Appellants (joint Liquidators Appointed by the Supreme Court of New South Wales)

Amaca Pty Limited and Amaba Pty Limited

Appellants (australian Insurance Creditors)

Anthony McMahon, Thomas Riddell and John Wardrop

Respondents (joint Provisional Liquidators Appointed by the High Court of Justice of England and Wales)

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division, Companies Court) to Court of Appeal

Legal Issues

  1. 1 Whether the English court can direct English provisional liquidators to remit assets to Australian liquidators under s.426 Insolvency Act 1986 when the distribution regime in Australia differs from England
  2. 2 Whether the absence of winding up orders in England affects the court's discretion to remit assets
  3. 3 Whether the interests of creditors in England would be prejudiced by such remission

Ratio Decidendi

The English court has jurisdiction under s.426 Insolvency Act 1986 to consider a request to remit assets to foreign liquidators, but should not exercise its discretion to do so where such remission would prejudice the interests of creditors in England, except where there is a sufficient countervailing advantage or requirement of private international law. In this case, remission would prejudice all creditors except certain Australian insurance creditors, and no sufficient countervailing benefit was demonstrated. The absence of winding up orders in England does not alter this conclusion, as winding up is likely if schemes are not approved. The costs order was a matter of discretion and no...

Court Disposition

All appeals dismissed

Orders

  • Appeal against refusal to remit assets to Australian liquidators dismissed
  • Appeal against refusal to award costs to Australian Insurance Creditors dismissed