AFG Insurances Ltd - [2002] NSWSC 844

Reported Decision:
43 ACSR 60
(2002) 20 ACLC 1747

New South Wales

Supreme Court

CITATION: AFG Insurances Ltd [2002] NSWSC 844

CURRENT JURISDICTION: Equity Division
Corporations List

FILE NUMBER(S): SC 4559/02

HEARING DATE(S): 11/09/02

JUDGMENT DATE: 11 September 2002

PARTIES :

AFG Insurances Limited (Administrators Appointed) - First Plaintiff
Keiran Hutchison and John Raymond Gibbons - Second Plaintiffs

JUDGMENT OF: Barrett J

COUNSEL : Mr B A J Coles QC/Mr D R Pritchard - Plaintiffs

SOLICITORS: Henry Davis York - Plaintiffs

CATCHWORDS: CORPORATIONS - voluntary administration - application for letter of request to English court - request to be based on declarations of this court as to status of administrators and company - request that English court make such orders as this court may make

LEGISLATION CITED: Corporations Act 2001 (Cth)

DECISION: Declarations made; letter of request issued

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

BARRETT J

WEDNESDAY 11 SEPTEMBER 2002

4559/02 - AFG INSURANCES LIMITED

JUDGMENT

1 Before the court is an application by AFG Insurances Limited and its administrators, Mr Hutchison and Mr Gibbons, who were appointed under Pt. 5.3A of the Corporations Act 2001 (Cth) on 14 August 2002. They seek the issue of a letter of request directed to the High Court of Justice in England. The application is made under s. 581(4) of the Corporations Act.

2 An application for similar relief was refused on 20 August 2002: [2002] NSWSC 735. There were essentially two reasons for that result in relation to the earlier application: first, it was not sufficiently shown that there was a situation of “insolvency” (see paragraph (c) of the definition of “external administration matter” in s. 580) and, second, the orders that the English court would have been asked by the letter of request to make could not, as I saw matters, be regarded as orders in the making of which that court would “act in aid of, and be auxiliary to” this court in relation to an “external administration matter”. I shall not repeat here the terms of the relevant statutory provisions or the detail of the reservations that caused me to decline the relief sought on the previous occasion.

3 As to the existence of an “external administration matter”, there is now before the court much more comprehensive evidence about the financial position of AFG. There is, in particular, an assessment of the position by one of the administrators, Mr Gibbons, which contains significantly more information than it was possible to put before the court on 19 and 20 August which was less than a week after the administrators were appointed. They have now had an opportunity to take further steps to assess the situation, including by obtaining a report (which is dated 6 September 2002) from Ernst & Young Actuarial Services as to the matter of claims provisioning which, for a company engaged in insurance and reinsurance activities, as is AFG, is a matter of crucial importance to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading AFG Insurances Ltd

Details

AGLC: AFG Insurances Ltd [2002] NSWSC 844
Case: [2002] NSWSC 844
Decision Date: 11 September 2002

CaseChat Overview and Summary

AFG Insurances Ltd was a subject of voluntary administration, with the Australian company, AFG Insurances Ltd, at the centre of the dispute. The case was heard in the Supreme Court of Victoria, where the administrators of AFG sought to have the court issue a letter of request to the High Court of England and Wales. The administrators aimed to have the English court recognise their status and the status of the company, as well as to make orders that the English court could make.

The primary legal issues before the court were whether the Supreme Court of Victoria had the jurisdiction to issue a letter of request to the High Court of England and Wales, and if so, what should be the scope of such a letter. The administrators argued that the court should include in the letter of request declarations as to their status and the status of the company, as well as a request that the English court make orders that the Victorian court could make.

The court found that it did have the jurisdiction to issue a letter of request to the High Court of England and Wales. In reaching this conclusion, the court considered the relevant legislation and case law, as well as the principles of comity and mutual respect between courts of different jurisdictions. The court also held that the requested declarations and orders were appropriate, given the circumstances of the case. The court therefore issued a letter of request to the English court, as sought by the administrators.

The court made an order that a letter of request be sent to the High Court of England and Wales, with the requested declarations and orders. This decision was significant, as it confirmed the power of the Supreme Court of Victoria to issue letters of request to foreign courts in cases of voluntary administration, and set out the scope of such letters. The outcome of this case may have implications for future cases involving cross-border insolvency proceedings.

Orders