FAI GENERAL INSURANCE COMPANY LIMITED (IN LIQUIDATION) [2014] NZHC 2405

FAI GENERAL INSURANCE COMPANY LIMITED (IN LIQUIDATION) [2014] NZHC 2405

The Court approved the proposed transfer because it was initiated by the liquidators, would not alter shareholders' rights or obligations, benefited FAI (NZ) and those interested in its assets by simplifying and making the group wind ups more efficient, and was supported by the Australian court's approval; courts should not unduly second-guess liquidators in such circumstances.

Citation
[2014] NZHC 2405
Parties
Liquidator (applicant): Kerryn Mark Downey; Liquidator (applicant): William Guy Black; Company (in Liquidation): FAI (NZ) General Insurance Company Limited (in liquidation); Shareholder/transferor: United Body Works (Qld) Pty Ltd (in liquidation); Creditor: HIH Casualty & General Insurance Ltd (in liquidation); Creditor: FAI Insurances Ltd (in liquidation and subject to schemes of arrangement); Creditor: FAI General Insurance Co Ltd (in liquidation and subject to schemes of arrangement); Shareholder: FAI Holdings (NZ No 2) Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
2 October 2014
Procedural Posture
Originating Application Under the Companies Act 1993 (ss 248(1)(d) and 284(1)) / Hearing on the Papers; Application Made Without Notice
Outcome
Order made approving transfer of 67,594 shares held by United Body Works (Qld) Pty Ltd in FAI (NZ) General Insurance Company Limited (in liquidation).
Legal Topics
Share Transfer After Liquidation, Court Approval of Register Changes, Distribution to Creditors, Group Winding Up
Company Law Insolvency Corporate Liquidation Share Transfer After Liquidation Court Approval of Register Changes Distribution to Creditors Group Winding Up

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Parties

Kerryn Mark Downey

Liquidator (applicant)

William Guy Black

Liquidator (applicant)

FAI (NZ) General Insurance Company Limited (in liquidation)

Company (in Liquidation)

United Body Works (Qld) Pty Ltd (in liquidation)

Shareholder/transferor

HIH Casualty & General Insurance Ltd (in liquidation)

Creditor

FAI Insurances Ltd (in liquidation and subject to schemes of arrangement)

Creditor

FAI General Insurance Co Ltd (in liquidation and subject to schemes of arrangement)

Creditor

FAI Holdings (NZ No 2) Ltd

Shareholder

Procedural Posture

Originating Application Under the Companies Act 1993 (ss 248(1)(d) and 284(1)) / Hearing on the Papers; Application Made Without Notice

Legal Issues

  1. 1 Whether court should approve transfer of shares after commencement of liquidation under s 248(1)(d) Companies Act 1993
  2. 2 Whether the proposed transfers benefit the company and those interested in its assets
  3. 3 Whether a heavy evidential burden is required to permit post-liquidation share transfers

Ratio Decidendi

The Court approved the proposed transfer because it was initiated by the liquidators, would not alter shareholders' rights or obligations, benefited FAI (NZ) and those interested in its assets by simplifying and making the group wind ups more efficient, and was supported by the Australian court's approval; courts should not unduly second-guess liquidators in such circumstances.

Court Disposition

Order made approving transfer of 67,594 shares held by United Body Works (Qld) Pty Ltd in FAI (NZ) General Insurance Company Limited (in liquidation).

Orders

  • Approved transfer of 67,594 shares held by United Body Works (Qld) Pty Ltd to creditors in accordance with the application: HIH Casualty & General Insurance Ltd 4,468 shares; FAI Insurances Ltd 13,048 shares; FAI General Insurance Co Ltd 50,078 shares.