//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2004] FCA 618
Federal Court of Australia
2004-04-13
Sackville J, As Sackville J, Gyles J
Original judgment source is linked above.
REASONS FOR JUDGMENT 1 This is an application under s 193 of the Life Insurance Act 1995 for an order under s 194 of the Act confirming a scheme for the transfer of the life insurance business of Challenger Life Limited to the life insurance business of Challenger Life No 2 Limited and other consequential orders. This is the first return date of that application. An order is sought pursuant to s 191(5) of the Act, that the need for compliance by the applicants with par 2(c) of s 191 of the Act by giving policy holders of Challenger Life No 2 Limited an approved summary of the scheme be dispensed with. 2 The principles which are to be applied in considering the exercise of the discretion to make such an order have been referred to by Sackville J in The Application of Commonwealth Life Ltd and Anor [2003] FCA 501 at [8]-[13] in a setting which counsel for the applicants suggests is very similar to the present setting. His Honour said at [8]: 'I think that some care needs to be taken before an order is made dispensing with the requirements of section 191(2)(c) of the Act. Clearly enough, the policy underlying the statutory requirement, when read in conjunction with s 191(2)(b), is to give every affected policyholder a summary of the scheme and, an opportunity, if he or she so desires, to make submissions to the Court in respect of any application for the confirmation of the scheme. A right to be heard in relation to a proposed scheme may be of little value if a person does not know of the proposal.' 3 In my opinion it would be unfortunate if the notion gained currency that s 191(2)(c) is a formality to be dispensed with as a matter of course. As Sackville J said, it is part of the scheme to ensure that the parties who are affected by a transfer know of it and thus have the opportunity of putting before the Court any opposition to it or any analysis of it, which may not otherwise be available. I had occasion to refer to the undesirability of ex parte applications in matters of this sort and matters under the Corporations Act 2001 becoming the entrenched position in Re AMP Henderson Global Investors Limited [2003] FCA 1631, in which I also referred to comments by other judges to the same effect. 4 I regard this matter as coming rather close to the line because the saving to the applicant, which is really the operative reason in favour of the order, is relatively modest in the overall scheme of things. However, as counsel for the applicant says, it is a significant saving that can be made if the mail-out does not have to occur. I have scrutinised the situation fairly carefully and I have had the advantage of a very clear outline of submissions, both in writing and orally, from counsel, who has taken me to the salient parts of the evidence. Under all the circumstances, I am satisfied that it would be appropriate to exercise my discretion in favour of making the order sought.
5 I take into account in particular the matters set out in counsel's written submission paragraphs 18 to 30, which I need not reproduce in this judgment, dealing with the nature of the scheme and the circumstances attending its preparation. I am influenced, as was Sackville J, by the fact that Australian Prudential Regulatory Authority (APRA) has indicated no opposition to this order and in effect consents to it, and sees no fundamental problem with the scheme itself. Whilst the decision is not one for APRA to make, that consent is a matter which I am entitled, and indeed bound, to take into account. It seems to me that the steps that will need to be taken by way of advertising and so forth are likely to bring what is proposed to the notice of the interested parties.
6 Furthermore, I will retain the ultimate discretion as to the approval of the scheme. If, as a result of closer examination than I have been able to give the matter today, or than would be appropriate that I give it at this stage, I perceive some problem which has not yet been perceived by those acting for the applicant or APRA, then the fact that there has been no notice given to possible contradictors may conceivably lead to an adjournment. That is the risk that is being run by an applicant in a situation like this, although I think it is a relatively minor risk in the circumstances of this case. 7 I make orders in accordance with the short minutes of order. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.
Associate: Dated: 27 May 2004 Counsel for the Applicant: RS Hollo