TGI Australia Limited, in the matter of TGI Australia Limited
[2012] FCA 987
FEDERAL COURT OF AUSTRALIA
TGI Australia Limited, in the matter of TGI Australia Limited [2012] FCA 987
Citation: TGI Australia Limited, in the matter of TGI Australia Limited [2012] FCA 987 Party: TGI AUSTRALIA LIMITED (ABN 12 000 041 458) File number: NSD 829 of 2012 Judge: JACOBSON J Date of judgment: 27 August 2012 Legislation: Insurance Act 1973 (Cth), Division 3A of Part III Date of hearing: 27 August 2012 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 6 Counsel for the Plaintiff: Mr N Owens Solicitor for the Plaintiff: HWL Ebsworth Lawyers Legal representative for APRA: Mr L Weate
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 829 of 2012
IN THE MATTER OF TGI AUSTRALIA LIMITED
PARTY: TGI AUSTRALIA LIMITED (ABN 12 000 041 458)
Plaintiff
JUDGE:
JACOBSON J
DATE OF ORDER:
27 AUGUST 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to Section 17F of the Insurance Act 1973 (Cth) (the Act), the scheme for the transfer of TGI Australia Limited's (TGI) insurance/reinsurance business to Gordian RunOff Limited (Gordian) (the Scheme), be confirmed in the form of Exhibit A in these proceedings.
2.The transfer date for the purposes of the Scheme and the Deed of Transfer of Insurance Business (the Deed) which appears at pages 3 to 68 of Exhibit marked "SOS2" referred to in the affidavit of Sandra O’Sullivan, be 5 September 2012.
3.Pursuant to Section 17F of the Act, all rights and obligations owed to TGI pursuant to any reinsurance treaties, be confirmed and transferred to Gordian and any reinsurance treaties to which TGI was a party shall be amended by replacing TGI with Gordian.
4.Gordian is to pay the costs of the proceedings of the Australian Prudential Regulation Authority (APRA) as agreed or assessed.
5.Gordian and APRA have liberty to apply on two clear days' notice.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 829 of 2012
IN THE MATTER OF TGI AUSTRALIA LIMITED
PARTY: TGI AUSTRALIA LIMITED (ABN 12 000 041 458)
Plaintiff
JUDGE:
JACOBSON J
DATE:
27 AUGUST 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is an application pursuant to Division 3A of Part III of the Insurance Act 1973 (Cth) (the Act) for confirmation of a scheme for the transfer of the insurance and reinsurance business written or assumed by TGI Australia Limited (TGI) to Gordian RunOff Limited (Gordian). The transfer is an intra group transfer because the ultimate holding company of each of TGI and Gordian is Enstar Group Limited.
For reasons that are set out in Mr Owens’ outline of submissions dated 24 August 2012, which I will mark as MFI2, as expanded and more fully explained this morning, I propose to make orders confirming the scheme.
The only issue which arose this morning that is not dealt with in the written submissions is the question of my power to confirm the scheme with certain modifications. I have power to do so under s 17F of the Act. The modifications relate to the transfer of obligations from TGI to Gordian in respect of indemnity contracts entered into between TGI and the company now known as Suncorp-Metway Limited.
Those indemnity contracts are explained in Mr Gard’s report and I do not need to set them out in detail in my reasons. It is sufficient to say that although the contracts of indemnity are not contracts of insurance, I am satisfied that they form part of the insurance business of TGI within the definition of insurance business stated in the Act. This is because the contracts of indemnity fall within business which may be described as incidental to the insurance business as so defined in the Act. Importantly, there is evidence before me that notice has been given to Suncorp-Metway Limited and also to AMP General Insurance Ltd which is affected by the indemnity contracts and there has been no opposition by either of those companies to the amendments to the scheme which will provide for the transfer of the liabilities to Gordian.
Although the amendments were, of course, not included in the scheme documents that were dispatched pursuant to my earlier orders, I am nevertheless satisfied that I should make the orders that are sought today. This is essentially because of the actuarial material contained in Mr Gard’s report. He took into account, in determining the solvency ratios and in coming to his conclusion, the fact that the indemnity contracts would be assumed by Gordian. Moreover, the assumption of those liabilities by Gordian is consistent with the underlying basis of the scheme and in those circumstances, it seems to me to be a proper exercise of my power to approve those modifications to the scheme.
In addition, APRA has appeared today and I have been informed that the Australian Prudential Regulation Authority (APRA) was told of the amendments and has had an ample opportunity to consider them. APRA does not oppose or object to the confirmation of the scheme with the amendments that are sought and that is a further reason why I consider it appropriate to exercise my powers under s 17F. Accordingly, for the reasons mentioned above, I will make orders in the terms that are proposed by Mr Owens of counsel.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate:
Dated: 27 August 2012
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