HIH Insurance Ltd - [2002] NSWSC 231

Reported Decision:
(2002) 20 ACLC 851

New South Wales

Supreme Court

CITATION: HIH Insurance Ltd [2002] NSWSC 231

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 1799/01

HEARING DATE(S): 22/03/02

JUDGMENT DATE: 25 March 2002

PARTIES :

Anthony Gregory McGrath and Alexander Robert Mackay Macintosh as Liquidators of HIH Insurance Ltd (In Liquidation) - Applicants

JUDGMENT OF: Barrett J

COUNSEL : Mr B.W. Collins QC - Applicants

SOLICITORS: Blake Dawson Waldron - Applicants

CATCHWORDS: CORPORATIONS - winding up - directions to liquidators -whether appropriate for court to give direction - PROCEDURE - legal professional privilege - liquidators' desire to deliver privileged material to Royal Commission in context of undertaking not to communicate except in certain circumstances - whether privilege waived if delivery voluntary - whether statutory compulsion exists

LEGISLATION CITED: Corporations Act 2001 (Cth)
Royal Commissions Act 1902 (Cth)

CASES CITED: Australian Competition and Consumer Commission v Daniels Corporation International Pty Ltd (2001) 182 ALR 114
Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385
Corporate Affairs Commission v Yuill (1991) 172 CLR 319
LMI Australasia Pty Ltd v Baulderstone Hornibrook Ltd [2000] NSWSC 1066
Mann v Carnell (1999) 201 CLR 1
Mercantile Credits Ltd v Dallhold Investments Pty Ltd (1994) 15 ACSR 230
Re G B Nathan & Co Pty Ltd (1991) 24 NSWLR 674
Re HIH Insurance Ltd (2001) 39 ACSR 645
Sanderson v Classic Car Insurances Pty Ltd (1985) 10 ACLR 115

DECISION: Direction sought not given

- 5 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

MONDAY 25 MARCH 2002

1799/01 - ANTHONY GREGORY McGRATH and ALEXANDER ROBERT MACKAY MACINTOSH IN THEIR CAPACITY AS PROVISIONAL LIQUIDATORS OF HIH INSURANCE LTD (IN LIQUIDATION)

JUDGMENT

1 On Friday afternoon, 22 March 2002, I heard, as a matter of urgency, this application made ex parte by Mr McGrath and Mr Macintosh as the liquidators of HIH Insurance Limited and other HIH companies. They seek a direction under s.479(3) of the Corporations Act 2001. The direction sought in relation to each company is as follows:

‘That the liquidators of the Company are justified in giving access to the HIH Royal Commission (‘Commission’) to the corporate records of the HIH Group of companies from 1 January 1995 to 15 March 2001, in response to a Notice to Produce Documents or Things issued by the Commission to the liquidators on 1 March 2002, which may include documents over which a claim for legal professional privilege may be maintained by the liquidators, pursuant to the regime set out in the letter from Simon Daley of the Commission addressed to Ray Mainsbridge of Blake Dawson Waldron dated 20 March 2002.”

(2001) 39 ACSR 645

2 The notice referred to in the form of direction now sought is dated 1 March 2002 and is…

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 HIH Insurance Ltd

Details

AGLC: HIH Insurance Ltd [2002] NSWSC 231
Case: [2002] NSWSC 231
Decision Date: 25 March 2002

CaseChat Overview and Summary

In the case before the court, HIH Insurance Ltd was the subject of a winding up order, and the liquidators sought directions regarding the delivery of certain documents to the Royal Commission. The court was tasked with determining whether it was appropriate to provide such directions and the implications of delivering privileged material under specific circumstances. The central legal issues centred on the nature of legal professional privilege and whether the privilege was waived if the delivery of documents was voluntary, as well as whether any statutory compulsion existed that would impact the liquidators' obligations.

The court examined the principles of legal professional privilege, which protect communications between lawyers and their clients. The liquidators argued that they should be allowed to deliver privileged material to the Royal Commission due to an undertaking not to communicate except in certain circumstances. The court considered whether the privilege could be waived if the delivery was voluntary and whether the existence of a statutory compulsion would influence the liquidators' obligations. The court found that the privilege could be waived if the delivery was voluntary and determined that the liquidators should not be compelled to deliver the privileged material unless required by law.

The court concluded that while the liquidators had an obligation to cooperate with the Royal Commission, they were not to be directed to deliver privileged material unless there was a statutory compulsion. The court emphasised that the privilege was not waived by the voluntary delivery of documents, and the liquidators' obligations were to be balanced with the protection of privileged communications. The court's decision provided clarity on the interplay between legal professional privilege, voluntary delivery of documents, and the obligations of liquidators in the context of a Royal Commission inquiry.

Orders