ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (IN LIQUIDATION) ACN 008 666 993 AND CERTAIN OF ITS SUBSIDIARIES - [2023] WASC 120

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (IN LIQUIDATION) ACN 008 666 993 AND CERTAIN OF ITS SUBSIDIARIES [2023] WASC 120
CORAM:   HILL J
HEARD:   6 APRIL 2023
DELIVERED          :   6 APRIL 2023
PUBLISHED           :   17 APRIL 2023
FILE NO/S:   COR 34 of 2023
MATTER:   IN THE MATTER OF ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (IN LIQUIDATION) ACN 008 666 993 AND CERTAIN OF ITS SUBSIDIARIES
EX PARTE

ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (IN LIQUIDATION) ACN 008 666 993 AND CERTAIN OF ITS SUBSIDIARIES
First Plaintiff

GEOFFREY FRANK TOTTERDELL as former liquidator of THE BELL GROUP LTD (IN LIQUIDATION) ACN 008 666 993 AND CERTAIN OF ITS SUBSIDIARIES
Second Plaintiff

ANTONY LESLIE JOHN WOODINGS as former provisional liquidator of WESTERN INTERSTATE PTY LTD (SCHEME ADMINISTRATOR APPOINTED) ACN 000 224 395
Third Plaintiff

ANTONY LESLIE JOHN WOODINGS as scheme administrator of BELL GROUP FINANCE PTY LTD (IN LIQUIDATION) (SCHEME ADMINISTRATOR APPOINTED) ACN 009 165 182 AND OTHERS
Fourth Plaintiff

Catchwords:

Corporations – External administration – Winding up – Application by liquidators for release – Application for deregistration of Bell group companies – Turns on own facts

Legislation:

Corporations Act 2001 (Cth) s 413, s 480, s 481
Supreme Court (Corporations) (WA) Rules 2004 (WA) r 7.5

Result:

Application granted

Category: B

Representation:

Counsel:

First Plaintiff	:	P A Walker
Second Plaintiff	:	P A Walker
Third Plaintiff	:	P A Walker
Fourth Plaintiff	:	P A Walker

Solicitors:

First Plaintiff	:	Ashurst Australia
Second Plaintiff	:	Ashurst Australia
Third Plaintiff	:	Ashurst Australia
Fourth Plaintiff	:	Ashurst Australia

Case referred to in decision:

Re Bell Group Ltd (in liq) [2020] WASC 121

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

The first plaintiff, Mr Woodings, is the liquidator of The Bell Group Ltd (in liquidation) (TBGL) and a number of its subsidiaries including Bell Group Finance Pty Ltd (in liquidation) (Scheme administrator appointed) (BGF). Mr Woodings is also the scheme administrator of Bell Group Finance and a number of other subsidiaries of TBGL, as well as the former provisional liquidator of Western Interstate Pty Ltd (Western Interstate).
The second plaintiff, Mr Totterdell, was previously the joint liquidator of TBGL and a number of its subsidiaries.
On 7 March 2023, the plaintiffs filed an originating process seeking orders that both Mr Woodings and Mr Totterdell be released as liquidators of these companies, and that ASIC deregister each of the companies set out in the Schedule to the originating process.
The originating process was listed before me for directions on 10 March 2023. On that date, I made orders requiring the service of the originating process, together with a notice that any objections were required to be filed and served within 21 days after service among other documents. Service was required to be effectuated by prepaid post by no later than 13 March 2023 to each creditor who was an admitted creditor in the winding up of TBGL or the Schemes.

Factual background

The factual background to this application is well known and can be briefly summarised as follows.
In July 1991, Mr Totterdell was appointed liquidator of TBGL. Subsequently, Mr Totterdell was appointed to a further 13 companies within the Australian Bell Group.
Mr Woodings was appointed as liquidator of BGF on 3 March 1993 and was subsequently appointed liquidator of eight other companies within the Australian Bell Group in 1995 and as provisional liquidator of Western Interstate in January 1996.
On 3 March 2000, Mr Woodings was appointed as joint liquidator with Mr Totterdell of TGBL and the other 13 companies and on 21 August 2014, following Mr Totterdell's resignation, was appointed by the court as sole liquidator of these companies.
After Mr Woodings and Mr Totterdell were appointed as liquidators to the various Australian Bell Group companies, they investigated various claims that ultimately led to the commencement of proceedings in December 1995 by them together with TBGL, BGF, various other companies within the Bell Group and other persons against a syndicate of banks (Bell Proceedings). The Bell Proceedings ran for a period of almost 20 years, from about 1995 until mid-2014 and comprised the trial at first instance before Justice Owen which ran for 404 days, an appeal to the Court of Appeal, and then an appeal to the High Court.
Prior to the hearing of the appeal in the High Court, the parties reached agreement on a conditional settlement of the Bell Proceedings. Entry into the settlement deed was approved by Justice Allanson on 14 November 2013.
In late June 2014, the settlement became unconditional and an amount of approximately $1.7 billion was received by various Bell Group companies.
In anticipation of completion of the settlement of the Bell proceedings, on 11 December 2013, Mr Woodings was appointed liquidator of a further Bell Group company, Albany Broadcasters Limited, to replace the existing liquidator, Mr Thackray.
Following settlement of the Bell Proceedings, from about mid‑2014, a number of disputes arose between the external creditors of the Bell Group companies concerning how the settlement funds should be distributed. Numerous proceedings were commenced in both this court and the Federal Court of Australia (Distribution Proceedings). A description of these disputes, including the parties involved, were summarised by me in my decision approving entry into the settlement agreement of these disputes.[1]
[1] Re Bell Group Ltd (in liq) [2020] WASC 121 [22] - [43].
As part of this litigation, Mr Woodings caused TBGL and certain other companies under his control to seek the reinstatement and winding up of various deregistered subsidiaries of TBGL. Orders were made to this effect in December 2018, and Mr Woodings was appointed as liquidator of these additional companies.
In December 2019, the parties to the various Distribution Proceedings entered into a series of agreements, including a deed of settlement (2019 Settlement Deed). On 15 April 2020, I made orders approving the entry into these agreements.
As part of the settlement between the parties, distributions of the recoveries from the Bell Proceedings were to be made from the winding up of TBGL, by way of schemes of arrangement to be entered into by BGF and certain other entities (including Western Interstate) (Schemes).
Relevantly, under the Schemes:
(1)the relevant scheme companies were amalgamated with BGF, and all of the assets and liabilities of the scheme companies were transferred to BGF;
(2)the claims of all creditors against any of the scheme companies were released and the liabilities of all scheme companies extinguished;
(3)all intra-Bell Group creditors of which Mr Woodings was liquidator or provisional liquidator had their right to a distribution of BGF's assets in its liquidation extinguished and did not receive any distribution from the scheme fund;
(4)any and all claims and liabilities arising between the scheme creditors, Mr Woodings, the various relevant Bell Group companies, and the parties to the 2019 Deed of Settlement (and certain related parties) which relate to various settled matters were released;
(5)Mr Woodings was appointed administrator of the Schemes; and
(6)the scheme fund was to be distributed in the order of priority summarised in the Scheme.
On 20 August 2020, following the convening and holding of scheme meetings of each of the relevant companies, I made orders approving the Schemes, as well as a number of ancillary directions, including the execution of a deed of assignment and assumption by those Australian Bell Group companies who had no known creditors and as a result were unable to propose a scheme of arrangement.
On 11 September 2020, completion of the 2019 Settlement Deed and the Schemes occurred. On that date, approximately $1.461 billion was distributed under the Schemes, together with payment of a further amount under the Schemes to TBGL.
On the same date, TBGL repaid amounts it owed to certain creditors for funding the Bell proceedings, and declared and paid to its creditors a first dividend in the winding up. TBGL also paid what is described by Mr Woodings in his evidence as a 'turnover amount' to its senior creditors under the terms of relevant subordinated bonds trust deeds, and paid what is described as a 'retention amount' to the then trustee of those subordinated bonds (LDTC) to meet possible future remuneration and other costs. The total sum paid (excluding the amounts paid to BGF) was $152.8 million.
Following Completion, TBGL and the Schemes retained approximately $9.9 million.
Before the liquidations could be completed, two matters needed to be finalised. The first was the realisation of BGF's right to prove in the liquidation of Bell Group UK Holdings Ltd (in liq) (BGUK) on account of an assignment of the debt BGF received in the settlement of the Bell proceedings, namely the Lloyds Debt. The second was the potential refund by LDTC of any unused portion of the retention amount. Once this was received, this amount would need to be turned over to TBGL's senior creditors under the terms of the relevant subordinated bonds trust deeds, including BGF. This payment to BGF would enable it to realise the last of its property and distribute the proceeds under the Schemes.
On about 17 June 2021, BGF reached a settlement with the only other potential creditor of BGUK, the UK Treasury Solicitor. BGF's proof of debt was admitted in BGUK's liquidation. BGF received a first interim dividend of approximately $100 million on 12 July 2021, and a final dividend of $1.28 million on 24 January 2023. Mr Woodings' evidence, which I accept, is that he does not expect any further recoveries from BGUK's liquidation.[2]
[2] Affidavit of Antony Leslie John Woodings filed 8 March 2023 [229].
Between April and December 2021, arrangements were put in place for LDTC to repay to TBGL most of the retention amount, and for Bell Group NV to meet any further claims for remuneration and costs by LDTC in exchange for an assignment of TBGL's right to receive any un-utilised portion of the unpaid retention amount. These arrangements enabled TBGL to finalise the second matter at an earlier stage than would otherwise have been possible. On 24 December 2021, TBGL received $7.5 million from LDTC. Mr Woodings' evidence, which I accept, is that no further amounts will be recovered from LDTC.[3]
[3] Affidavit of Antony Leslie John Woodings filed 8 March 2023 [201].
Between July 2021 and March 2023, a number of additional distributions have been made in TBGL's winding up or from the Schemes, namely:
(1)a further and final dividend together with certain turnover entitlements to senior creditors, which was paid on 12 July 2022;
(2)further payments under the Schemes on 12 July 2022, 25 July 2022, 2 February 2023 and 20 March 2023.
The evidence before the court is that all dividends in the winding up of TBGL have now been paid and all distributions to Scheme creditors have now occurred.[4] Subject to the payment of a few remaining costs and expenses, under the terms of the Schemes, the Schemes will terminate.
[4] Plaintiffs' submissions [34].

Legal principles

Applicable statutory provisions

Seven of the companies seeking relief in this application (TBGL, BGF, Albany Broadcasters, Bell Bros Holdings Ltd (in liq), Bell Publishing Group Pty Ltd (in liq), Wigmores Tractors Pty Ltd (in liq) and W & J Investments Ltd (in liq)) were ordered to be wound up by the court prior to 23 June 1993. By reason of s 1408(1) of the Corporations Act 2001 (Cth) (Act), the winding up of these companies is governed by pts 5.4 and 5.6 of the Corporations Law as at 22 June 1993.
In respect of the remaining companies the subject of this application, the current provisions of the Act applies.
In this application, I accept counsel's submission that there is no material change in the provisions that govern this application between the legislation.

Release of liquidator

Section 480 of the Corporations Law and the Act provides that a liquidator of a company may apply to the Court for an order that they be released and that ASIC deregister the company if the conditions in either s 480(a) or s 480(b) are satisfied.
These conditions are satisfied when the liquidator has either:
(1)realised all of the property of the company, or so much of it as can in his or her opinion be realised without needlessly protracting the winding up, and has distributed a final dividend to the creditors (s 480(a)); or
(2)resigned or been removed from office (s 480(b)).
In considering whether or not to grant the release sought, the Court may cause a report on the accounts of the liquidator to be prepared by an auditor (s 481(1)(a)). On compliance with all the requirements of the Court, the Court must take into consideration any such auditor's report, and any objection against the release of the liquidator that is made. The Court must then must either grant or withhold the release (s 481(1)(b) & (c)). The usual requirements of the Court are set out in rule 7.5 of the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules).
The effect of any release ordered by the Court is to discharge the liquidator from all liability in respect of any act or default made by them in the administration of the company's affairs or otherwise in relation to their conduct as liquidator.
For this reason, strict compliance with all statutory prerequisites and the requirements of the Corporations Rules is generally necessary before a release will be ordered.
Where the applicant has demonstrated they have strictly complied with these matters, the court then has a discretion whether or not to grant or withhold the release. However, where compliance has been established and there is no objection to the release by any creditor and no concern has been raised as to the performance of the liquidator's duties, the Court will generally grant the release, unless any reason emerges as to why it should not do so.

Deregistration of the companies

Orders can be made under ss 480 and 481 of the Act to deregister a company in circumstances where the winding up is otherwise complete. This applies to 40 of the companies that are the subject of this application.
In respect of the application for the deregistration of Western Interstate, which is the only relevant Bell Group company to which ss 480 and 481 do not apply, the plaintiffs rely on s 413(1)(d) of the Act. This section gives the court power to order the deregistration of a company in connection with a scheme for the amalgamation of two or more Part 5.1 bodies where the whole or part of the undertaking or property of a transferor company has been transferred to a transferee company.

Disposition

For the following reasons, I am satisfied that it is appropriate to order the release of Mr Woodings and Mr Totterdell pursuant to ss 480 and 481 of the Corporations Law and Act.
First, I am satisfied that the statutory pre-requisites set out in s 480 have been met. In respect of Mr Woodings, I am satisfied that, on the evidence before the court, he has realised all the property of these Bell Group companies (as well as all the property of Western Interstate), has distributed a final dividend for the relevant companies (specifically, TBGL), and has not been required to adjust the rights of contributories nor to pay any return to them. On this basis, I am satisfied that Mr Woodings meets the requirements of s 480(a). In respect of Mr Totterdell, I am satisfied that he has resigned from the office of liquidator and, as such, falls within the terms of s 480(b) of the Act.
Second, on the evidence before the court,[5] I am also satisfied that the requirements of s 481 of the Act and rule 7.5 of the Corporations Rules have been met. Given the plaintiffs have established strict compliance with the statutory pre-requisites, no objection has been raised by any creditor, and in fact, to the contrary, the committees of inspection support the release and it is a term of the 2019 Settlement Deed that there be a release, and no concern has been raised by any party about the performance of the liquidators, it is appropriate and consistent with the legal principles summarised above to grant the release sought.
[5] Affidavit of Antony Leslie John Woodings filed 8 March 2023 [244] - [289]; Plaintiffs' submissions [50].
Third, there is no reason that the orders for the release of Mr Woodings and Mr Totterdell should not be made. Given the long and protracted history of both the liquidations of these companies and the significant amounts of litigation that these liquidations have spawned, I consider it is appropriate for them to receive the protection of an order of release.
I turn then to the question as to whether each of the companies should be ordered to be deregistered. In the case of all of the companies apart from Western Interstate, I am satisfied that I have the power under ss 480 and 481 to order their deregistration. The evidence before the Court is that nothing remains to be done in the windings up of these companies. Under s 481(4) of the Act, the order for the release of Mr Woodings will operate to remove him from office. In these circumstances, it is necessary as well as appropriate to order the deregistration of each of these companies.
In relation to Western Interstate, I accept that the court has power under s 413(1)(d) of the Act to order the deregistration of this company. For the following reasons, I am satisfied that it is also appropriate to make this order. First, on the evidence before the court, the Schemes have or will shortly terminate. Second, Western Interstate has no remaining property or liabilities. Third, nothing else is required to be done in connection with the affairs of Western Interstate.

Conclusion and Orders

For these reasons, I am satisfied it is appropriate to make orders in terms of the plaintiffs' proposed minute of orders dated 3 April 2023.
In relation to the costs of the application, the plaintiffs seek an order that the costs of the application be shared equally between TBGL and BGF and be costs in the winding up, in relation to TBGL, and to be paid out of the Scheme fund, in the case of BGF. Having regard to the nature and structure of the proposal, it is my view that this is a reasonable and appropriate basis on which to apportion costs and is consistent with previous costs orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
FD
Associate to the Honourable Justice Hill
17 APRIL 2023