HIH Insurance Ltd

[2007] NSWSC 498

CITATION:	HIH Insurance Ltd [2007] NSWSC 498 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	27/04/07
JUDGMENT DATE :	27 April 2007
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	27 April 2007
DECISION:	Order that hearing be conducted in the absence of the public.
CATCHWORDS:	PROCEDURE - hearing in open court - where applications relate to conduct of litigation by liquidators for benefit of large body of creditors - where hearing in open court might prejudice beneficial conduct of that litigation - public interest in open justice outweighed by public interest in due progress of insolvent administration and due conduct of liquidators' litigation
LEGISLATION CITED:	Civil Procedure Act 2005, s.71 Supreme Court Act 1970, s.80
CASES CITED:	McGrath Re HIH Insurance Ltd [2005] NSWSC 731
PARTIES:	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 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

BARRETT J

THURSDAY 27 APRIL 2007

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.

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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