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Re HIH Insurance Ltd (in liq)

Re HIH Insurance Ltd (in liq)

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Case Copied 24 February 2015 49 min read

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of HIH Insurance Limited (In Liquidation); In the matter of HIH Insurance Limited (In Liquidation); In the matter of HIH Insurance Limited (In Liquidation); Cuong Ly v HIH Insurance Limited (In Liquidation) [2015] NSWSC 790
Hearing dates: 24, 25, 27 February 2015
Date of orders: 24 February 2015
Decision date: 24 February 2015
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision:
Various evidentiary rulings

Catchwords:
EVIDENCE – expert evidence – admissibility – supplementary report served late – where supplementary report responds to prospective failure of party to prove underlying assumptions by limiting assumptions – where within scope of existing expert evidence – admitted

EVIDENCE – documentary evidence – admissibility – apparently generally accepted analysis of data of financial statements of listed companies – where not bona fide in dispute and strict proof would cause undue delay and expense - admitted

EVIDENCE – relevance – document tendered to prove knowledge of incorrect accounting treatment of transactions – where document addressed taxation not accounting treatment of transactions – rejected

EVIDENCE – prior convictions – whether conviction admissible if person convicted is not party to civil proceedings in which it is tendered – admissions in previous criminal proceedings – exceptions to inadmissibility – rule in Hollington v Hewthorn - (Cth) Evidence Act 1995, s 92(2) – rejected
EVIDENCE – expert evidence – late service – where evidence proceeds by ongoing expert discourse – where evidence refines and clarifies issues and is within general scope defined by evidence already served – admitted
Legislation Cited: (Cth) Corporations Act 2001
(Cth) Trade Practices Act 1976, s 83
(Qld) Evidence Act 1977, s 79
(NSW) Evidence Act 1995, s 66A, s 91, s 92, s 93
(NT) Evidence Act 1939
(SA) Evidence Act 1929, s 34A
(UK) Civil Evidence Act 1968
Cases Cited: Ainsworth v Burden [2005] NSWCA 174
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301
Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 3) [1970] Ch 506; [1969] 3 All ER 897
Castrique v The Imrie (1870) LR 4 HL 414
Dawson v Great Central Railway (1919) 88 LJKB 1177
Giorgianni v The Queen (1985) 156 CLR 473
Hollington v F Hewthorn & Co Ltd [1943] KB 587; [1943] 2 All ER 35
In re Crippen (deceased) [1911] P 108
In the matter of HIH Insurance Limited (in liquidation); De Bortoli Wines (Superannuation) Pty Ltd v McGrath [2014] NSWSC 774
Ishac v David Securities Pty Ltd (unreported, NSWSC, Young J, 13 December 1991)
Mobil Oil Corporation v Registrar of Trade Marks [1984] VR 25
National Mutual Life Association of Australasia Ltd v Grosvenor Hill (Qld) (2001) 183 ALR 700
Rakay v MacFarlane (1961) 78 WN (NSW) 488
Ramsay v Pigram (1968) 118 CLR 271
R v Fodera [2007] NSWSC 1194; (2007) 65 ACSR 109
R v Jacobs (No 5) [2013] NSWSC 946
R v Kay (1887) 16 Cox CC 292
R v…

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.

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Details

Case: [2015] NSWSC 790
Decision Date: 24 February 2015

CaseChat Overview and Summary

The liquidators of HIH Insurance Ltd brought an application in the Federal Court of Australia seeking directions in relation to the admissibility of evidence. The primary dispute was over the admissibility of various types of evidence including expert evidence, documentary evidence, evidence concerning knowledge of incorrect accounting treatment of transactions, and prior convictions. The court had to determine whether the supplementary expert report served late was admissible, whether the documentary evidence concerning the analysis of financial statements was admissible, whether the document regarding taxation was relevant and admissible, whether the prior convictions were admissible under the Hollington v Hewthorn exception, and whether the late service of expert evidence was acceptable.

The court first addressed the issue of the late supplementary expert report. The supplementary report was deemed admissible as it responded to a prospective failure of a party to prove underlying assumptions by limiting those assumptions and was within the scope of the existing expert evidence. The court then considered the admissibility of the documentary evidence, which was an apparently generally accepted analysis of data of financial statements of listed companies. Given that this evidence was not in bona fide dispute and its strict proof would cause undue delay and expense, it was admitted. However, a document tendered to prove knowledge of incorrect accounting treatment of transactions was rejected as it addressed taxation rather than accounting treatment. The court also examined the admissibility of prior convictions under the Hollington v Hewthorn exception and found them inadmissible as the person convicted was not a party to the civil proceedings. Finally, the court ruled that the late service of expert evidence was acceptable because it refined and clarified issues within the general scope defined by the already served evidence.

The court concluded that the supplementary expert report, the documentary evidence concerning financial statements, and the late service of expert evidence were admissible. However, the document regarding taxation was rejected as irrelevant, and the prior convictions were deemed inadmissible. These findings were integral to the directions sought by the liquidators regarding the admissibility of evidence in the ongoing proceedings.

Orders