HIH Insurance Ltd [2007] NSWSC 498

LEGISLATION CITED : Civil Procedure Act 2005, s.71 Supreme Court Act 1970, s.80

CASES CITED : McGrath Re HIH Insurance Ltd [2005] NSWSC 731

FAI TRADERS INSURANCE CO PTY LTD. ANTHONY GREGORY MCGRATH - IN THEIR CAPACITY AS PROVISIONAL LIQUIDATORS OF HIH INSURANCE LTD (IN PROVISIONAL LIQUIDATION) & ANOR WORLD MARINE & GENERAL INSURANCES PTY LTD HIH UNDERWRITING & INSURANCE (AUSTRALIA) PTY LTD LANLEX NO. 65 PTY LTD FAI LEASING FINANCE PTY LTD FAI INSURANCES LTD CIC INSURANCE LTD FAI INVESTMENTS PTY LTD FAI GENERAL INSURANCE COMPANY LTD FAI OVERSEAS INVESTMENTS PTY LTD ALEXANDER ROBERT MACKAY MACINTOSH - IN THEIR CAPACITY AS PROVISIONAL LIQUIDATORS OF HIH CASUALTY & GENERAL INSURANCE LTD (PROV LIQUIDATOR APPOINTED) & ANOR HIH OVERSEAS HOLDINGS LTD FAI FINANCIAL SERVICES LTD FAI OVERSEAS HOLDINGS PTY LTD FAI REINSURANCES PTY LTD HIH UNDERWRITING & AGENCY SERVICES LTD CIC INSURANCE LTD (PROVISIONAL LIQUIDATOR APPOINTED) v HANNAN & CO PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v NOTESTIR PTY LTD FAI INSURANCES LTD (IN LIQ) v FIRST MENTOR GROUP PTY LTD HIH UNDERWRITING & AGENCY SERVICES LTD (IN LIQ) v WORLDWIDE WEATHER UNDERWRITING AGENCIES (AUS) PTY LTD HIH INSURANCE LTD (IN LIQ) v HIH INVESTMENT HOLDINGS LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH COMPANY LTD HIH UNDERWRITING & AGENCY SERVICES LTD (IN LIQ) v ACN 006 495 987 PTY LTD (FORMERLY "INDUSTRIAL REHABILITATION SERVICES PTY LTD") CIC INSURANCE LTD (IN LIQ) v CIC GENERAL INSURANCE HOLDINGS LTD FAI INSURANCES LTD (IN LIQ) v FAI HOME SECURITY HOLDING PTY LTD HIH UNDERWRITING & AGENCY SERVICES LTD (IN LIQ) v ACN 005 312 345 PTY LTD (FORMERLY READY PLAN ASIA PACIFIC PTY LTD) HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v FAI FILM DISTRIBUTION PTY LTD FAI GENERAL INSURANCE COMPANY LTD (LIQUIDATION) v FAI WORKERS' COMPENSATION (VIC) PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH (REAL ESTATE) PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v INTEGRATED COMMERCIAL FINANCE PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v INNES OWENS PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v RISKCORP AUSTRALIA PTY LTD HIH TRAVEL (AUSTRALIA) PTY LTD v ACN 006 584 103 LTD (FORMERLY READY PLAN GROUP LTD) HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v MARINE AND AVIATION MANAGEMENT SERVICES LTD ACN 006 385 584 HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v CIC WORKERS' COMPENSATION (NSW) LTD ACN 005 312 345 PTY LTD (IN LIQ) v CIC INVESTMENTS LTD ACN 004 766 081 FAI INSURANCES LTD (IN LIQ) ACN 004 304 545 v PEMBROKE SECURITIES LTD ACN 002 799 546 HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v LAKE CRACKENBACK RESORT PTY LTD ACN 003 379 708 PARTIES : HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v 422 COLLINS STREET PTY LTD ACN 005 807 036 HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v FAI FINANCE CORPORATION PTY LTD ACN 053 262 561 FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v UNITED BODY WORKS (QLD) PTY LTD FAI GENERAL INSURANCE COMPANY (IN LIQ) v FAI PROPERTY SERVICES PTY LTD HIH UNDERWRITING AND AGENCY SERVICES PTY LTD (IN LIQ) v HIH UNDERWRITING HOLDINGS PTY LTD HIH UNDERWRITING HOLDINGS PTY LTD v HIH MANAGEMENT PTY LTD HIH UNDERWRITING AND INSURANCE (AUST) PTY LTD (IN LIQ) v HIH SERVICES PTY LTD HIH UNDERWRITING AND AGENCY SERVICES LTD (IN LIQ) v M W PAYNE (ASSESSORS) PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH LEGAL SERVICES PTY LTD HIH UNDERWRITING AND AGENCY SERVICES LTD (IN LIQ) v HIH TRAVEL (AUSTRALIA) PTY LTD HIH UNDERWRITING AND AGENCY SERVICES LTD (IN LIQ) v BERZOT PTY LTD HIH INSURANCE LTD (IN LIQ) v HIH HOLDINGS PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH (NSW) PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH (VIC) PTY LTD HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v UTILITIES INSURANCE UNDERWRITING AGENCIES PTY LTD HIH OVERSEAS HOLDINGS PTY LTD (IN LIQ) v HIH NEW ZEALAND PTY LTD CIC INSURANCE LTD (IN LIQ) v INDUSTRIAL MUTUAL COMPENSATION PTY LTD CIC INSURANCE LTD (IN LIQ) v REHABILITATION AND PREVENTIVE SERVICES PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI CAR OWNERS MUTUAL INSURANCE COMPANY PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI PACIFIC PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI WORKERS COMPENSATION (SA) PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v MOWETE PTY LTD FAI PROPERTIES PTY LTD v MARINERS ON THE WATER PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI PROPERTIES (QLD) PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v GLENEAGLES PROPERTIES PTY LTD GLENEAGLES PROPERTIES PTY LTD v FAI SUNSHINE COAST PTY LTD FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v TANGLEBERRY PTY LTD FAI INSURANCE LTD (IN LIQ) v BINGATION PTY LTD FAI INSURANCE LTD (IN LIQ) v FAI FILMS PTY LTD FAI LEASING FINANCE PTY LTD (IN LIQ) v SAILPORT PTY LTD FAI FILMS PTY LTD v FAI FILM PRODUCTIONS PTY LTD FAI INVESTMENTS PTY LTD (IN LIQ) v LANLEX NO.45 PTY LTD LANLEX NO. 45 PTY LTD v RHONDDA COLLIERIES (QLD) PTY LTD LANLEX NO. 45 PTY LTD v FAI PORTFOLIO MANAGEMENT PTY LTD FAI PORTFOLIO MANAGEMENT PTY LTD v FAI INVESTMENT SERVICES PTY LTD FAI INSURANCE LTD (IN LIQ) v RADBATH HOLDINGS PTY LTD HIH CASUALTY AND GENERAL INSURANCE LTD (IN LIQ) v TALFLAT INVESTMENTS PTY LTD RADBATH HOLDINGS PTY LTD v VANHALL PTY LTD FAI INSURANCE LTD (IN LIQ) v FAI INVESTMENTS PTY LTD HIH UNDERWRITING HOLDINGS PTY LTD v FAI (CTP) PTY LTD HIH INSURANCE HOLDINGS (NZ) LTD v HIH (AUSTRALIA) PTY LTD

FILE NUMBER(S) : SC 1798/01; 1799/01; 1800/01; 1801/01; 1803/01; 1804/01/1805/01; 1806/01; 1807/01; 1808/01; 1809/01; 1810/01; 1811/01; 1812/01; 1813/01; 1814/01; 1815/01; 2650/01; 4727/01; 4913/01; 2601/02; 3753/02; 4096/02; 4098/02; 4472/02; 1348/03; 2419/03; 2421/03; 2422/03; 2423/03; 2424/03; 2425/03; 2426/03; 4227/03; 4229/03; 4231/02; 4232/03; 4233/03; 4235/03; 4236/03; 4237/03; 3949/04; 3950/04; 6363/04; 6379/04; 6393/04; 6365/04; 6383/04; 6364/04; 6366/04; 6377/04; 6375/04; 6381/04; 6394/04; 6370/04; 6395/04; 6388/04; 6367/04; 6369/04; 6380/04; 6391/04; 6386/04; 6396/04; 6372/04; 6368/04; 6389/04; 6385/04; 6373/04; 6378/04; 6371/04; 6397/04; 6374/04; 6382/04; 6376/04; 6387/04; 6392/04; 6390/04; 6398/04; 1323/05; 5970/06

COUNSEL : Mr M.B. Oakes SC/Mr J. Scarcella, Solicitor - Applicants Mr J.W. Stevenson SC/Ms V.E. Whittaker - Additional applicant in 1805/01 and 1808/01

SOLICITORS : Blake Dawson Waldron - Applicants Corrs Chambers Westgarth - Additional applicant in 1805/01 and 1808/01

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

1798/01 - FAI TRADERS INSURANCE CO PTY LTD. 1799/01 - ANTHONY GREGORY MCGRATH - IN THEIR CAPACITY AS PROVISIONAL LIQUIDATORS OF HIH INSURANCE LTD (IN PROVISIONAL LIQUIDATION) & ANOR 1800/01 - WORLD MARINE & GENERAL INSURANCES PTY LTD 1801/01 - HIH UNDERWRITING & INSURANCE (AUSTRALIA) PTY LTD 1803/01 - LANLEX NO. 65 PTY LTD 1804/01 - FAI LEASING FINANCE PTY LTD 1805/01 - FAI INSURANCES LTD 1806/01 - CIC INSURANCE LTD 1807/01 - FAI INVESTMENTS PTY LTD 1808/01 - FAI GENERAL INSURANCE COMPANY LTD 1809/01 - FAI OVERSEAS INVESTMENTS PTY LTD 1810/01 - ALEXANDER ROBERT MACKAY MACINTOSH - IN THEIR CAPACITY AS PROVISIONAL LIQUIDATORS OF HIH CASUALTY & GENERAL INSURANCE LTD (PROV LIQUIDATOR APPOINTED) & ANOR 1811/01 - HIH OVERSEAS HOLDINGS LTD 1812/01 - FAI FINANCIAL SERVICES LTD 1813/01 - FAI OVERSEAS HOLDINGS PTY LTD 1814/01 - FAI REINSURANCES PTY LTD 1815/01 - HIH UNDERWRITING & AGENCY SERVICES LTD 2650/01 - CIC INSURANCE LTD (PROVISIONAL LIQUIDATOR APPOINTED) v HANNAN & CO PTY LTD 4727/01 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v NOTESTIR PTY LTD 4913/01 - FAI INSURANCES LTD (IN LIQ) v FIRST MENTOR GROUP PTY LTD 2601/02 - HIH UNDERWRITING & AGENCY SERVICES LTD (IN LIQ) v WORLDWIDE WEATHER UNDERWRITING AGENCIES (AUS) PTY LTD 3753/02 - HIH INSURANCE LTD (IN LIQ) v HIH INVESTMENT HOLDINGS LTD 4096/02 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH COMPANY LTD 4098/02 - HIH UNDERWRITING & AGENCY SERVICES LTD (IN LIQ) v ACN 006 495 987 PTY LTD (FORMERLY "INDUSTRIAL REHABILITATION SERVICES PTY LTD") 4472/02 - CIC INSURANCE LTD (IN LIQ) v CIC GENERAL INSURANCE HOLDINGS LTD 1348/03 - FAI INSURANCES LTD (IN LIQ) v FAI HOME SECURITY HOLDING PTY LTD 2419/03 - HIH UNDERWRITING & AGENCY SERVICES LTD (IN LIQ) v ACN 005 312 345 PTY LTD (FORMERLY READY PLAN ASIA PACIFIC PTY LTD) 2421/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v FAI FILM DISTRIBUTION PTY LTD 2422/03 - FAI GENERAL INSURANCE COMPANY LTD (LIQUIDATION) v FAI WORKERS' COMPENSATION (VIC) PTY LTD 2423/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH (REAL ESTATE) PTY LTD 2424/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v INTEGRATED COMMERCIAL FINANCE PTY LTD 2425/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v INNES OWENS PTY LTD 2426/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v RISKCORP AUSTRALIA PTY LTD 4227/03 - HIH TRAVEL (AUSTRALIA) PTY LTD v ACN 006 584 103 LTD (FORMERLY READY PLAN GROUP LTD) 4229/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v MARINE AND AVIATION MANAGEMENT SERVICES LTD ACN 006 385 584 4231/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v CIC WORKERS' COMPENSATION (NSW) LTD 4232/03 - ACN 005 312 345 PTY LTD (IN LIQ) v CIC INVESTMENTS LTD ACN 004 766 081 4233/03 - FAI INSURANCES LTD (IN LIQ) ACN 004 304 545 v PEMBROKE SECURITIES LTD ACN 002 799 546 4235/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v LAKE CRACKENBACK RESORT PTY LTD ACN 003 379 708 4236/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v 422 COLLINS STREET PTY LTD ACN 005 807 036 4237/03 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) ACN 008 482 291 v FAI FINANCE CORPORATION PTY LTD ACN 053 262 561 3949/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v UNITED BODY WORKS (QLD) PTY LTD 3950/04 - FAI GENERAL INSURANCE COMPANY (IN LIQ) v FAI PROPERTY SERVICES PTY LTD 6363/04 - HIH UNDERWRITING AND AGENCY SERVICES PTY LTD (IN LIQ) v HIH UNDERWRITING HOLDINGS PTY LTD 6379/04 - HIH UNDERWRITING HOLDINGS PTY LTD v HIH MANAGEMENT PTY LTD 6393/04 - HIH UNDERWRITING AND INSURANCE (AUST) PTY LTD (IN LIQ) v HIH SERVICES PTY LTD 6365/04 - HIH UNDERWRITING AND AGENCY SERVICES LTD (IN LIQ) v M W PAYNE (ASSESSORS) PTY LTD 6383/04 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH LEGAL SERVICES PTY LTD 6364/04 - HIH UNDERWRITING AND AGENCY SERVICES LTD (IN LIQ) v HIH TRAVEL (AUSTRALIA) PTY LTD 6366/04 - HIH UNDERWRITING AND AGENCY SERVICES LTD (IN LIQ) v BERZOT PTY LTD 6377/04 - HIH INSURANCE LTD (IN LIQ) v HIH HOLDINGS PTY LTD 6375/04 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH (NSW) PTY LTD 6381/04 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v HIH (VIC) PTY LTD 6394/04 - HIH CASUALTY & GENERAL INSURANCE LTD (IN LIQ) v UTILITIES INSURANCE UNDERWRITING AGENCIES PTY LTD 6370/04 - HIH OVERSEAS HOLDINGS PTY LTD (IN LIQ) v HIH NEW ZEALAND PTY LTD 6395/04 - CIC INSURANCE LTD (IN LIQ) v INDUSTRIAL MUTUAL COMPENSATION PTY LTD 6388/04 - CIC INSURANCE LTD (IN LIQ) v REHABILITATION AND PREVENTIVE SERVICES PTY LTD 6367/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI CAR OWNERS MUTUAL INSURANCE COMPANY PTY LTD 6369/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI PACIFIC PTY LTD 6380/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI WORKERS COMPENSATION (SA) PTY LTD 6391/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v MOWETE PTY LTD 6386/04 - FAI PROPERTIES PTY LTD v MARINERS ON THE WATER PTY LTD 6396/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v FAI PROPERTIES (QLD) PTY LTD 6372/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v GLENEAGLES PROPERTIES PTY LTD 6368/04 - GLENEAGLES PROPERTIES PTY LTD v FAI SUNSHINE COAST PTY LTD 6389/04 - FAI GENERAL INSURANCE COMPANY LTD (IN LIQ) v TANGLEBERRY PTY LTD 6385/04 - FAI INSURANCE LTD (IN LIQ) v BINGATION PTY LTD 6373/04 - FAI INSURANCE LTD (IN LIQ) v FAI FILMS PTY LTD 6378/04 - FAI LEASING FINANCE PTY LTD (IN LIQ) v SAILPORT PTY LTD 6371/04 - FAI FILMS PTY LTD v FAI FILM PRODUCTIONS PTY LTD 6397/04 - FAI INVESTMENTS PTY LTD (IN LIQ) v LANLEX NO.45 PTY LTD 6374/04 - LANLEX NO. 45 PTY LTD v RHONDDA COLLIERIES (QLD) PTY LTD 6382/04 - LANLEX NO. 45 PTY LTD v FAI PORTFOLIO MANAGEMENT PTY LTD 6376/04 - FAI PORTFOLIO MANAGEMENT PTY LTD v FAI INVESTMENT SERVICES PTY LTD 6387/04 - FAI INSURANCE LTD (IN LIQ) v RADBATH HOLDINGS PTY LTD 6392/04 - HIH CASUALTY AND GENERAL INSURANCE LTD (IN LIQ) v TALFLAT INVESTMENTS PTY LTD 6390/04 - RADBATH HOLDINGS PTY LTD v VANHALL PTY LTD 6398/04 - FAI INSURANCE LTD (IN LIQ) v FAI INVESTMENTS PTY LTD 1323/05 - HIH UNDERWRITING HOLDINGS PTY LTD v FAI (CTP) PTY LTD 5970/06 - HIH INSURANCE HOLDINGS (NZ) LTD v HIH (AUSTRALIA) PTY LTD

JUDGMENT - On application for a closed court hearing. See p5 of transcript.

1 I have before me an application under s.71 of the Civil Procedure Act 2005 for an order that the applications in the HIH matters listed for hearing this morning be dealt with in the absence of the public. The application is made on the basis of s.71(b) which permits such an order to be made "if the presence of the public would defeat the ends of justice". 2 The substantive applications involve directions to liquidators and other relief concerned with the progress of and steps to be taken in litigation, in which the companies in liquidation are involved. Both Mr McGrath and Mr Honey, as the liquidators of all the companies, and Mr Parbery as the special purpose liquidator of the two FAI companies, have formed and conveyed to the court a view that if the evidence intended to be adduced by them was made available to any of the defendants to the litigation concerned, the ability of the liquidators to advantageously pursue or conclude the claims for the benefit of the creditors of the relevant companies would be likely to be significantly prejudiced. 3 The circumstances accordingly continue to be as described in my judgment of the 20 July 2005, McGrath Re HIH Insurance Ltd [2005] NSWSC 731, where the principles applicable to this kind of application were discussed. The application then was under s.80 of the Supreme Court Act 1970 but for all relevant purposes the same principles apply to s.71 of the Civil Procedure Act. 4 Again, as there, the liquidators accept that there is a strong and clear public interest in open justice and that except in exceptional circumstances, proceedings should take place in public. 5 Today, as on the previous occasions, there are two other public interests competing with the public interest in open justice. The first is the public interest in the due and beneficial administration of the estates of insolvent companies by liquidators appointed by and answerable to the court, that administration being for the benefit of creditors. I previously observed that the public interest in the due administration of the insolvent estates of the HIH companies is particularly pronounced when there are many thousands of creditors from all walks of life. 6 The second competing or countervailing public interest arises from the fact that applications before me relate to the pursuit of litigation. There is a clear public interest in the due administration of justice, in that in litigation in the normal course an ordinary litigant would keep close to the chest, as it were, the matters that the liquidators, because of their position, see fit to bring to court. The liquidators, because of their position, should not be set aside from other litigants and be placed to a disadvantage when, as I say, they are acting for the benefit of many thousands of creditors whose interests are very much to the fore. 7 As I have said, the position now before me is the same as that which was before me on 20 July 2005. In each of the proceedings in the list today therefore I make an order, pursuant to s.71 of the Civil Procedure Act 2005, that the hearing of the interlocutory process listed for hearing be conducted in the absence of the public. **********

17/05/2007 - File No 2423/03 inserted in cover sheet File No 3494/04 replaced by 3949/04 in cover sheet - Paragraph(s) Not applicable

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