New Cap Reinsurance Corporation Ltd & Anor v Grant & Ors

A money judgment made by a recognised court in insolvency proceedings can fall within Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933. The expression “civil or commercial matter” in the 1994 Australian Order does not exclude insolvency proceedings. Registration cannot be avoided merely because the defendants did not submit to the foreign court where the relevant insolvency jurisdiction is recognised under Rubin v Eurofinance SA [2010] EWCA Civ 895. Section 426 of the Insolvency Act 1986 also permits assistance directed to enforcing such a judgment and is not displaced by section 6 of the 1933 Act. The appeal was dismissed.

New Cap, an Australian reinsurance company in liquidation, obtained an order in New South Wales declaring payments to Lloyd’s syndicate members voidable preferences and ordering repayment with interest and costs. The syndicate had not accepted service, submitted to the New South Wales jurisdiction, or participated formally in the proceedings.

The liquidator sought assistance in England under section 426 of the Insolvency Act 1986 and, alternatively, enforcement at common law. Lewison J granted the requested relief, holding that section 426 and the common-law jurisdiction were available, but that the Foreign Judgments (Reciprocal Enforcement) Act 1933 did not apply to insolvency orders: [2011] EWHC 677 (Ch). The appeal concerned the interaction between the 1933 Act, the 1994 Australian Order, section 426 and the common law.

Outcome. Lloyd LJ delivered the judgment of the court. McFarlane and Mummery LJJ agreed. The syndicate’s appeal was dismissed and the order made under section 426 of the Insolvency Act 1986 was upheld.

1. The Foreign Judgments (Reciprocal Enforcement) Act 1933 applies to a money judgment made by a recognised court in insolvency proceedings, including an order setting aside a preference. Nothing in the Act, the Greer Report or the draft reciprocal conventions excluded such judgments.
2. The 1994 Australian Order applied the Act to judgments in civil or commercial matters. That expression did not exclude insolvency proceedings. The exclusion of insolvency from the Brussels Convention did not establish that proceedings connected with insolvency were inherently outside civil or commercial matters. Lord Goff’s reasoning in Re State of Norway’s Application (Nos. 1 and 2) [1990] 1 AC 723 supported a broad, context-sensitive construction.
3. Because the New South Wales order was registrable, the relevant jurisdictional ground for setting aside registration was section 4(1)(a)(ii) of the 1933 Act. The court was bound by Rubin v Eurofinance SA [2010] EWCA Civ 895, which recognised the insolvency jurisdiction of the court conducting the unitary foreign insolvency. Registration therefore could not be set aside on the ground that the syndicate had not submitted to the New South Wales court.
4. Section 426 could be used to request assistance directed to enforcement of a money judgment made in foreign insolvency proceedings. Section 6 of the 1933 Act barred an action at common law for recovery of a sum payable under a registrable foreign judgment, but did not bar the distinct, discretionary jurisdiction under section 426.
5. Where both statutory regimes apply, the section 426 discretion should take account of the availability and use of registration and should not be used to circumvent the 1933 Act. The judge’s exercise of the discretion was not erroneous. It was unnecessary to decide whether the common-law power to assist a foreign liquidator remained available where section 426 applied.

• Court of Appeal (Civil Division). The syndicate’s appeal was dismissed. The court upheld the order made under section 426 of the Insolvency Act 1986, while reaching partly different conclusions from the judge on the scope of the 1933 Act.
• High Court of Justice, Chancery Division, Companies Court. Lewison J granted the liquidator’s request for relief under section 426 and held alternatively that equivalent relief could be granted at common law: [2011] EWHC 677 (Ch).