The receivers of failed finance company Bridgecorp have had a $20 million claim against Lloyd’s of London dismissed by the Court of Appeal.
Bridgecorp, which collapsed in 2007 owing $490m to 14,500 investors, had issued an investment prospectus in December 2006 containing statements that were ruled false and misleading, Fairfax Media
The company had engaged insurance broking firm Herbert Insurance Group, the owner of which was recently found guilty of a series of fraud and corruption offences
, to cover the loans made.
Herbert Insurance went into liquidation in 2011.
Bridgecorp’s receivers PricewaterhouseCoopers went to Lloyd’s with the claim as they were the underwriter of Herbert Insurance.
The claim was dismissed by the High Court earlier this year, and on Friday the Court of Appeal also dismissed the claim, which was heard in October.
The issue of whether New Zealand courts had jurisdiction over the claim was key, with Justice Rhys Harrison saying that while the debt was situated here, Lloyd’s of London’s business was not.
“Thus the place where payment is due could only become a relevant factor if Bridgecorp sought to establish that the underwriters reside both in England and New Zealand.”