1 The liquidators of HIH Insurance Ltd ("HIH") make application under s 596B of the Corporations Act 2001 (Cth) for the issue of examination summonses directed to two persons resident in London. They also seek an order under rule 11.5 of the Uniform Civil Procedure Rules 2005 granting leave to serve each summons in the United Kingdom and an order that there be issued pursuant to s 581(4) of the Corporations Act a letter of request directed to the High Court of Justice of England and Wales. I shall refer to that court as the "English court".
2 The application is thus similar to that dealt with in reasons published on 31 July 2008 concerning compulsory examination of a person resident in Hong Kong: McGrath & Anor as Liquidators of HIH Insurance Ltd [2008] NSWSC 780.
3 In this case, as in that, the persons concerned played roles in events of 1998 and 1999 central to the "takeover loss proceedings" subsequently initiated by the liquidators and referred to in the earlier reasons.
4 I am satisfied on the material before me that, because of his involvement in those events, each such person is, in terms of s 596B(1)(b), someone who "may be able to give information about examinable affairs of" HIH. The basis for this conclusion corresponds with that stated at paragraphs [9] to [11] of the 31 July 2008 reasons. It is also appropriate that an order for service out of Australia be made: see paragraphs [15] and [16] of the 31 July 2008 reasons.
5 The extraterritorial aspects of the present case are more straightforward than those of the Hong Kong case. This is because there is a United Kingdom statutory provision empowering the English court to act in aid of this court in relation to the matter that is the subject of the request that this court is now asked to make. That matter is, of course, the conduct of the examinations in London.
6 Section 426(4) of the Insolvency Act 1986 (UK) is as follows:
"The courts having jurisdiction in relation to insolvency law in any part of the United Kingdom shall assist the courts having the corresponding jurisdiction in any other part of the United Kingdom or any relevant country or territory."
7 By virtue of s 426(11) of the Insolvency Act and the Co-operation of Insolvency Courts (Designation of Relevant Countries and Territories) Order 1986 (UK), Australia is a relevant country for these purposes.
8 Section 426(5) of the Insolvency Act is in these terms:
"For the purposes of subsection (4) a request made to a court in any part of the United Kingdom by a court in any other part of the United Kingdom or in a relevant country or territory is authority for the court to which the request is made to apply, in relation to any matters specified in the request, the insolvency law which is applicable by either court in relation to comparable matters falling within its jurisdiction. In exercising its discretion under this subsection, a court shall have regard in particular to the rules of private international law."
9 It is thus made clear that the English court, in addressing and giving effect to a request of this court to render assistance in the matter of conducting examinations, may apply either the law that is applicable by that court or the law that is applicable by this court in relation to such matters. It is for the English court to decide which system of law it should apply, although it is required by s 426(5) to have regard to the rules of private international law.
10 As is made clear by the opinion from English solicitors that has been tendered on this application, the Insolvency Act creates a jurisdiction in relation to examinations which is similar to that under which this court is asked to issue an examination summons in this case. Having regard to section 426(5), the English court, if it accedes to the request in the letter of request, may elect to proceed by way of examination pursuant to the Insolvency Act itself or by way of examination in the manner provided for in the Corporations Act. In making the choice, the English court will have regard to the rules of private international law.
11 It is the preference of the liquidators that the examination be conducted in accordance with the Corporations Act and the procedures it prescribes. It is appropriate that that preference be stated in the letter of request, although ultimately, as I have said, it will be for the English court to decide how it proceeds, if indeed it accedes to the request.
12 As to that last matter, the advice from the English solicitors confirms that the English court has jurisdiction to receive and act upon the proposed letter of request. In addition the strong probability must be that, absent some compelling reason to the contrary shown to it, the English court will act upon and give affect to the request. I say this because of the clear message conveyed by Lord Hoffman in Re HIH Casualty and General Insurance Ltd; McGrath v Riddell [2008] UKHL 21; [2008] 1 WLR 852 at [30]:
"The primary rule of private international law which seems to me applicable to this case is the principle of (modified) universalism, which has been the golden thread running through English cross- border insolvency law since the 18th century. That principle requires that English courts should, so far as is consistent with justice and UK public policy, co-operate with the courts in the country of the principal liquidation to ensure that all the company's assets are distributed to its creditors under a single system of distribution."
13 This is consistent with the approach taken by his Lordship, speaking for the Privy Council, in Cambridge Gas Transport Corp v Official Committee of Unsecured Creditors of Navigator Holdings plc [2006] UKPC 26; [2006] 3 WLR 689 at [20] - [22].
14 I am satisfied that there is utility in the issue of the letter of request in that the English court is likely to accept and act upon the request: Re HIH Insurance Ltd [2004] NSWSC 454 at [8].
15 I raised with counsel for the liquidators the question whether consideration had been given to a direct approach to the English court under the UNCITRAL Model Law on Cross Border Insolvency which is now in force as part of the domestic law of the United Kingdom through the Cross-Border Insolvency Regulations 2006 (UK). If an order were made under those regulations recognising the winding up of HIH as a "foreign main proceeding", the English court would have immediate and direct jurisdiction to make orders for the obtaining of information concerning HIH's "assets, affairs, rights, obligations or liabilities" (article 21(1)(d)) of the Model Law set out in schedule 1 to the regulations). The English court would not be assisting or acting in aid of this court. It would be exercising independent jurisdiction.
16 The answer was that the possibility of resort to the regulations had been considered and that, on advice, the liquidators preferred to adopt the letter of request procedure which had been availed of by them on several earlier occasions.
17 The s 426 jurisdiction, which continues despite the United Kingdom's adoption of the Model Law, is seen by the liquidators as the more convenient route, particularly since the alternative involves the preliminary step of obtaining an order of the English court recognising the foreign insolvency proceeding. In Australia too, s 581 of the Corporations Act containing provisions similar to those of s 426 co-exists with domestic law adopting the Model Law (Cross-Border Insolvency Act 2008 (Cth)). There has been a deliberate decision in each country that the older system of cross-border assistance should be retained despite the enactment of Model Law legislation.
18 There is no reason under our law (and there appears to be none under English law) why the liquidators should not take the course they wish to take or why this court should do otherwise than assist them.
19 I will make the orders sought. There are some minor adjustments to be made following discussion with counsel. In particular, the order corresponding with the fourth order set out at paragraph [35] of the 31 July 2008 reasons should be adjusted to provide that the examination summons shall stand discharged in the stated eventuality, rather than that the person is excused from compliance. The orders will be made in chambers upon delivery of amended documents to my Associate.
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