HIH Group was the second-largest insurance group in Australia when it collapsed in 2001. This case, the House of Lords hearing McGrath and another and others v Riddell and others [2008], concerns four companies within the group, which were authorised to carry on insurance in the UK.
The majority of the companies’ assets and liabilities were in Australia, but a significant proportion was also located in England. Winding-up orders were made in Australia in 2001 and provisional liquidators were appointed in England around the same time. In July 2005, the Supreme Court of New South Wales issued a letter of request (which facilitates co-operation between courts exercising jurisdiction in relation to insolvency) to the High Court in London under section 426 of the Insolvency Act 1986, asking that the provisional liquidators be directed, after payment of expenses, to remit the assets under their control to the Australian liquidators for distribution. The assets would be distributed in a different priority in Australia than that prescribed by English rules, and would result in insurance creditors being better off than non-insurance creditors.
