The latest attempt by Equity Insurance Company Limited to overturn the Financial Services Commission’s move to wind up the insurer suffered a setback on Monday, as procedural issues delayed the start of a key appeal hearing.
The matter, scheduled to begin before the three-member Financial Services Appeals Tribunal (FSAT), was instead dominated by preliminary concerns that will now be addressed at a case management conference in July. The substantive hearing is not expected to take place until October.
With guidance from the tribunal chairman, retired High Court Justice Christopher Blackman, both sides agreed that the period October 12–16 would be suitable for setting a final hearing date.
The tribunal also ruled on three procedural matters, stating that the substantive hearing would be deferred until October; an application by Equity Insurance to amend its grounds of appeal was postponed after the supporting affidavit was deemed incorrect; and a “statement of protest and reservation of rights” submitted by the company was dismissed as inappropriate.
Explaining the decision, Justice Blackman said: “One of the things that was alleged in one of their statements is that they were obliged to be working on that matter, plus, the winding up matter, when in fact, the order made by Justice Dr H. Patrick Wells on April 10 expressly said everything had been stayed until the tribunal functioned. So, there was really no proper basis for the application.
Equity Insurance, represented by senior counsel Alrick Scott and Larry Smith, rejected the tribunal’s position that its amendment application was defective.
Counsel for Equity Insurance Alrick Scott KC (left) and Larry Smith, KC following today’s FSC Appeals Tribunal proceedings in the High Court (EJ)
Scott said: “[Justice Blackman said] application to amend was defective because a paragraph in the affidavit did not mention all three grounds that were sought to be amended. We are saying that the two paragraphs which deal specifically and completely with Ground 7 was not pleaded; and in the notice of application, we dealt specifically and extensively with Ground 7. So, that is why we rejected his suggestion, that it was defective, because it dealt specifically with the specific grounds.”
Scott also defended the company’s attempt to file the protest statement. “Our position is that we are entitled to place the statement of protest on the record, and that we stand by the statement of protest. It has to do with two things: the tribunal did not provide for disclosure of documents; and we placed on record our protest and reservation of rights.”
He further criticised the tribunal’s timetable, describing it as unrealistic: “The tribunal was appointed on February 23. The tribunal set down for hearing the substantial matter, within four months of the tribunal’s appointment, which we have always said, is an unrealistic time table for a substantial matter. We placed on record, too, our protest, the timetable set by the tribunal for hearing of the matter.”
Scott also pointed to a late affidavit filed on Sunday by the FSC on behalf of restructuring manager Craig Waterman, saying this contributed to the need to reschedule the substantive hearing.
Restructuring manager for the beleaguered Equity insurance, Craig Waterman attended Monday’s Appeals Tribunal case (EJ)
Appearing for the FSC, Senior Counsel Garth Patterson objected to the inclusion of the protest statement in the tribunal’s record, describing it as unusual.
Senior Counsel Garth Patterson is representing the Financial Services Commission (EJ)
He said he was surprised to see such a document filed before a tribunal and agreed with the chairman that it was redundant, noting that in 40 years of legal practice he had never encountered such a filing.
The dispute follows earlier proceedings in March, when the tribunal declined the FSC’s request to suspend Equity Insurance’s appeal. Attorney for the commission, Amanda Best, had sought a stay pending the outcome of a separate High Court application to wind up the insurer.
That application was subsequently dismissed by Justice Dr H. Patrick Wells in a 77-page ruling, in which he found that the FSC had not established a clear case and warned that proceeding with liquidation at that stage would undermine an ongoing statutory appeals process.
Justice Wells stated that the FSC could renew its application in future, “at the very minimum, after a resolution of the matters currently sub judice before the Financial Services Commission’s Appeals Tribunal”.
He also indicated that the regulator could seek directions from the court in the event of undue or unreasonable delay.
The FSC assumed control of Equity Insurance in August last year, citing unresolved breaches of multiple laws and ongoing threats to consumer interests.
(EJ)
