Insurance Commission of Western Australia v Antony Leslie John Woodings as liquidator of the Bell Group Ltd (in liq) [No 4] - [2018] WASC 186

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   INSURANCE COMMISSION OF WESTERN AUSTRALIA -v- ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (in liq) [No 4] [2018] WASC 186
CORAM:   PRITCHARD J
HEARD:   18 MAY 2018
DELIVERED          :   1 JUNE 2018
PUBLISHED           :   21 JUNE 2018
FILE NO/S:   CIV 2666 of 2016
BETWEEN:   INSURANCE COMMISSION OF WESTERN AUSTRALIA
Plaintiff
AND
ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (in liq)
First Defendant
THE BELL GROUP LTD (in liq)
Second Defendant
ANTONY LESLIE JOHN WOODINGS as liquidator of BELL GROUP FINANCE PTY LTD (in liq)
Third Defendant
BELL GROUP FINANCE PTY LTD (in liq)
Fourth Defendant
ANTONY LESLIE JOHN WOODINGS as liquidator of BELL BROS PTY LTD (in liq)
Fifth Defendant
BELL BROS PTY LTD (in liq)
Sixth Defendant
ANTONY LESLIE JOHN WOODINGS as provisional liquidator for WESTERN INTERSTATE PTY LTD (in provisional liquidation)
Seventh Defendant
WESTERN INTERSTATE PTY LTD (in provisional liquidation)
Eighth Defendant
GARRY JOHN TREVOR as liquidator of BELL GROUP NV (in liq)
Ninth Defendant
BELL GROUP NV (in liq)
Tenth Defendant
LAW DEBENTURE TRUST CORPORATION plc
Eleventh Defendant
COMMONWEALTH OF AUSTRALIA
Twelfth Defendant
WA GLENDINNING & ASSOCIATES PTY LTD
Thirteenth Defendant

FILE NO/S: COR 146 of 2014
BETWEEN: ANTONY LESLIE JOHN WOODINGS as liquidator of THE BELL GROUP LTD (in liq) and BELL GROUP FINANCE PTY LTD (in liq)
Plaintiff
AND
WA GLENDINNING & ASSOCIATES PTY LTD
First Defendant
BELL GROUP NV (in liq)
Second Defendant
INSURANCE COMMISSION OF WESTERN AUSTRALIA
Third Defendant
THE COMMONWEALTH OF AUSTRALIA
Fourth Defendant
THE LAW DEBENTURE TRUST CORPORATION plc in its capacity as trustee of the holders of bonds issued under the trusts listed in Annexure A to the orders made on 1 February 2018
Fifth Defendant

Catchwords:

Practice and procedure - Service - Whether a party is properly before the Court - Where a party has multiple capacities

Practice and procedure - Representative orders - Rules of the Supreme Court 1971 (WA) O 18 r 13 - Whether expedient to make a representative order

Legislation:

Rules of the Supreme Court 1971 (WA), O 6 r 5, O 18 r 13

Result:

Applications granted

Category: B

Representation:

CIV 2666 of 2016

Counsel:

Plaintiff	:	Mr G K Rich SC and Mr D Sulan
First Defendant	:	Mr A Chai
Second Defendant	:	Mr A Chai
Third Defendant	:	Mr A Chai
Fourth Defendant	:	Mr A Chai
Fifth Defendant	:	Mr A Chai
Sixth Defendant	:	Mr A Chai
Seventh Defendant	:	Mr A Chai
Eighth Defendant	:	Mr A Chai
Ninth Defendant	:	Mr A D'Arcy
Tenth Defendant	:	Mr A D'Arcy
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Jones Day
First Defendant	:	Ashurst Australia
Second Defendant	:	Ashurst Australia
Third Defendant	:	Ashurst Australia
Fourth Defendant	:	Ashurst Australia
Fifth Defendant	:	Ashurst Australia
Sixth Defendant	:	Ashurst Australia
Seventh Defendant	:	Ashurst Australia
Eighth Defendant	:	Ashurst Australia
Ninth Defendant	:	Lipman Karas
Tenth Defendant	:	Lipman Karas
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	No appearance

COR 146 of 2014

Counsel:

Plaintiff	:	Mr A Chai
First Defendant	:	No appearance
Second Defendant	:	Mr A D'Arcy
Third Defendant	:	Mr G K Rich and Mr D Sulan
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Ashurst Australia
First Defendant	:	No appearance
Second Defendant	:	Lipman Karas
Third Defendant	:	Jones Day
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance

Case(s) referred to in decision(s):

ACES Sogutla Holdings Pty Ltd (In Liq) v Commonwealth Bank of Australia [2014] NSWCA 402; (2014) 89 NSWLR 209
ALYK (HK) Ltd v Caprock Commodities Trading Pty Ltd and China Construction Bank Corporation [2015] NSWSC 1006
AMP Capital Investors Ltd v Parsons Brinckerhoff Australia Pty Ltd [2013] NSWSC 1633
Ashwin v Minara Resources Ltd [2006] WASC 75; (2006) 200 FLR 80
Barnes v Addy (1870) LR 9 Ch App 244
Basis Capital Funds Management Ltd v BT Portfolio Services Ltd [2008] NSWSC 555; (2008) 66 ACSR 580
Bride and Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd (Unreported, WASC Full Ct, Library No 960565, 25 September 1996)
Brydges v Brydges and Wood [1909] P 187
Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398
Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; (2017) 316 FLR 159
Elovalis v Elovalis [2008] WASCA 141
ING Funds Management Ltd v JP Morgan Nominees Australia Ltd [2009] NSWSC 59
Insurance Commission of Western Australia v Antony Leslie John Woodings as liquidator of the Bell Group Ltd (In Liq) [No 2] [2017] WASC 372
JD Thompson Personnel Pty Ltd v Asgard Capital Management Ltd [2011] NSWSC 811
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410
Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; (2012) 264 FLR 424
Plaza BV v The Law Debenture Trust Corporation plc [2015] EWHC 43 (Ch)
Templeton v Leviathan Pty Ltd (1921) 30 CLR 34
Yara Australia Pty Ltd v Oswal [No 2] [2013] WASCA 187

PRITCHARD J:

On Friday, 1 June 2018, I made orders in CIV 2666 of 2016 and COR 146 of 2014 (together, the Proceedings) including orders:
(i)to clarify that in both of the Proceedings, the LDTC is named as a party in its capacity as the trustee of trusts established under certain trust deeds, which are referred to herein as the BGNV Trust Deeds and the TBGL/BGF Trust Deeds; and
(ii)to appoint the LDTC in each of the Proceedings as a representative for all of the holders of bonds (other than ICWA) issued under the BGNV Trust Deeds.
At the time of making those orders, I indicated that I would publish my reasons for doing so in the near future. These are my reasons for making those orders.
Some general background to the Proceedings is set out in my reasons for decision in Insurance Commission of Western Australia v Antony Leslie John Woodings as liquidator of the Bell Group Ltd (In Liq) [No 2][1] (strike out judgment).I do not propose to repeat that background here. These reasons should be read in conjunction with the strike out judgment. The same abbreviated terms are used.
[1] Insurance Commission of Western Australia v Antony Leslie John Woodings as liquidator of the Bell Group Ltd (In Liq) [No 2] [2017] WASC 372.
In these reasons, I deal with the following matters:
1.The applications for the orders (Applications);
2.The factual background to the Applications;
3.A preliminary issue - whether the LDTC is before the Court and has been served with the Applications;
4.Clarification of the capacity in which relief is sought against the LDTC;
5.Why it is appropriate to appoint the LDTC as the representative of bondholders under the BGNV Trust Deeds;
6.The orders made on 1 June 2018.

The applications for the orders (Applications)

ICWA made an Application in each of the Proceedings. The Applications were in similar terms.
In COR 146 of 2014, ICWA sought orders including the following:
1.Pursuant to Order 4A, Rule 5A(1)(b) of the Rules of the Supreme Court 1971 (WA) (WASC Rules), the order made on 1 February 2018, joining Law Debenture Trust Corporation plc (LDTC) to the proceedings be varied so as to make LDTC a party to the proceedings in its capacity as trustee under the following trust deeds:
(a)the trust deed between Bell Group N.V. (in liquidation) (BGNV), The Bell Group Limited (TBGL) and LDTC dated 20 December 1985, as amended by a supplemental trust deed dated 6 February 1986 between BGNV, TBGL and LDTC;
(b)the trust deed between BGNV, TBGL and LDTC dated 7 May 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC; and
(c)the trust deed between BGNV, TBGL and LDTC dated 14 July 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC;
(collectively, the BGNV Trust Deeds).
(d)the trust deed between TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989; and
(e)the trust deed between BGF, TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between BGF, TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989.
and
3.LDTC is appointed under Order 18, Rule 13 of the WASC Rules as a representative for all the holders of bonds (other than ICWA) issued under the BGNV Trust Deeds.
In CIV 2666 of 2016, ICWA sought orders including the following:
1.Pursuant to Order 21, Rule 5 of the Rules of the Supreme Court 1971 (WA) (WASC Rules), leave be granted to ICWA to amend its Writ of Summons so as to identify that The Law Debenture Trust Corporation plc (LDTC) is a party to the proceedings in its capacity as trustee under the following trust deeds:
(a)the trust deed between Bell Group N.V. (in liquidation) (BGNV), The Bell Group Limited (TBGL) and LDTC dated 20 December 1985, as amended by a supplemental trust deed dated 6 February 1986 between BGNV, TBGL and LDTC;
(b)the trust deed between BGNV, TBGL and LDTC dated 7 May 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC; and
(c)the trust deed between BGNV, TBGL and LDTC dated 14 July 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC;
(collectively, the BGNV Trust Deeds).
(d)the trust deed between TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989; and
(e)the trust deed between BGF, TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between BGF, TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989.
and
3.LDTC is appointed under Order 18, Rule 13 of the WASC Rules as a representative for all the holders of bonds (other than ICWA) issued under the BGNV Trust Deeds.
ICWA also sought some other orders, mostly in the alternative to those set out above. As I do not propose to make those orders it is unnecessary to deal with them here.
The LDTC is a party to each of the Proceedings. In COR 146 of 2014, it is presently joined as a defendant in its capacity as the trustee of the TBGL/BGF Trust Deeds. It was joined as a party to that proceeding, in that capacity, by an order I made on 1 February 2018. In CIV 2666 of 2016, the LDTC is the eleventh defendant. However, ICWA's Amended Writ of Summons does not specify the capacity in which the LDTC is sued.
Order 1 in each Application was intended to make clear that the Proceedings are brought against the LDTC in its capacity as a trustee under the BGNV Trust Deeds, as well as in its capacity as the trustee under the trust deeds referred to in paragraphs (d) and (e) of order 1 in each Application (the TBGL/BGF Trust Deeds).
In these reasons, where the context permits, I will refer to the LDTC, in its capacity as the trustee under the TBGL/BGF Trust Deeds, as the LDTC (TBGL/BGF), and to the LDTC, in its capacity as the trustee under the BGNV Trust Deeds, as the LDTC (BGNV).
Order 3 in each Application was directed to a different issue. That order was intended to ensure that the holders of bonds governed by the BGNV Trust Deeds (other than ICWA itself, which is already a party to each of the Proceedings), and whose interests may be affected by the outcome of the Proceedings, are represented in, and bound by the outcome of, the Proceedings.
The only parties to appear at the hearing of the Applications were ICWA, the Liquidator and BGNV. The Liquidator took a neutral stance in respect of the Applications,[2] while BGNV acted as a contradictor to the Applications. The LDTC's solicitors advised the parties (and through them, the Court) that the LDTC did not intend to appear on the Applications,[3] for reasons I set out below. All of the other parties to the Proceedings indicated that they did not wish to be heard on the Applications, and were excused from attending the hearing of the Applications.
[2] ts 839.
[3] Exhibit 2, [65], Annexure TIL-42, page 364 - 370.

The factual background to the Applications

In addition to the factual background set out in the strike out judgment, it is necessary to set out some further background, none of which is disputed. That factual background is drawn from the affidavits read, and documents tendered, by ICWA and BGNV on the Applications, namely:
(i)Affidavit of Timothy Ignatius L'Estrange sworn 23 February 2018 (exhibit 1);
(ii)Affidavit of Timothy Ignatius L'Estrange sworn 4 May 2018 (exhibit 2);
(iii)Affidavit of Timothy Ignatius L'Estrange sworn 17 May 2018 (exhibit 3);
(iv)Emails dated 17 May 2018 between Mr Tim L'Estrange, Jones Day, and Mr Jonathan Croft, LONSIN (exhibit 4).
(v)Affidavit of Scott Bruce Foreman sworn 17 April 2018 (exhibit 5);
(vi)Affidavit of Scott Bruce Foreman sworn 15 May 2018 (exhibit 6).

The TBGL/BGF bonds

In 1988, TBGL and BGF each issued a series of domestic bonds. The bonds were issued under the TBGL/BGF Trust Deeds.[4] Those Deeds were subsequently amended by supplemental trust deeds.[5] The LDTC is the trustee of the bonds under the TBGL/BGF Trust Deeds. ICWA holds all of the bonds under the TBGL/BGF Trust Deeds.[6]

The BGNV bonds

[4] Exhibit 1, [6] and Annexures TIL-1 and TIL-2.

[5] Exhibit 1, [6] and Annexures TIL-3 and TIL-4.

[6] Exhibit 1, [7].

In the 1980s, BGNV issued three series of bonds, each of which was made under one of the BGNV Trust Deeds (BGNV bonds).[7] Each of those trust deeds was subsequently amended by a supplemental trust deed.[8] It appears that a very substantial number of BGNV bonds, with a very significant aggregate value, were issued.
[7] Exhibit 1, [11] and Annexures TIL-8, TIL-9 and TIL-10.
[8] Exhibit 1, [11] and Annexures TIL-11, TIL-12 and TIL-13.
BGNV (like all companies in the Bell Group) is in liquidation. As it was incorporated in the Netherlands Antilles it is being wound up pursuant to orders of the courts of the Netherlands Antilles. BGNV is also registered as a foreign company in Australia, and Mr Trevor was appointed the liquidator of BGNV in Australia in 1996.[9]
[9] Exhibit 1, [16], [17].
Each of the BGNV Trust Deeds was entered into by BGNV as the issuer of the BGNV bonds, TBGL as the guarantor of the obligations of BGNV to pay any moneys under the BGNV Trust Deeds and under the bonds issued thereunder, and the LDTC as a trustee on behalf of the BGNV bondholders.
The terms of each of the BGNV Trust Deeds are similar. The terms and conditions of the bonds are set out in the Second Schedule to the BGNV Trust Deeds.[10] Some of the key clauses pertaining to the bonds are discussed below.
[10] Eg Exhibit 1, Annexure TIL-8, Second Schedule.
The BGNV bonds are guaranteed convertible subordinated bonds. A conversion bond issued by TBGL was attached to each of them. Upon the BGNV bonds maturing (in December 1995), each bond entitled the bearer to require BGNV to redeem the bond at its principal amount plus a specified rate of interest, or alternatively to apply the proceeds of the bond to paying for the conversion bond which thereupon would be converted into ordinary $1 shares in TBGL.[11]

Some key obligations of the parties to the BGNV Trust Deeds

[11] Eg Exhibit 1, Annexure TIL-8, cl 11 and Second Schedule, cl 5.

Under the BGNV Trust Deeds, BGNV promised the LDTC that as and when the BGNV bonds matured, BGNV would unconditionally pay to the LDTC the amount of the principal plus interest on those bonds.[12]
[12] Eg Exhibit 1, Annexure TIL-8, cl 3(A).
TBGL guaranteed the payment of all moneys payable by BGNV under the bonds, and promised the LDTC that that guarantee constituted a direct, unconditional, unsecured and subordinated obligation of TBGL and would rank equally (in a winding up) with all its other present and future unsecured and subordinated indebtedness.[13] Counsel for ICWA referred to this obligation as the pari passu promise. The effect of the pari passu promise was that in the winding up of TBGL, its obligation to pay the LDTC the moneys due under the BGNV bonds would rank equally with its obligations to pay other unsecured and subordinated debts. The latter would include any amounts owed by TBGL under the TBGL/BGF Trust Deeds (namely, its debt to ICWA as the holder of bonds issued under the TBGL/BGF Trust Deeds).
[13] Eg Exhibit 1, Annexure TIL-8, cl 5(A) and Second Schedule, cl 2.
It was further agreed that in the winding up of BGNV or TBGL, the LDTC as the trustee was entitled to commence proceedings to recover amounts due and payable under the BGNV bonds.[14] Consequently, the LDTC (BGNV) would be entitled to lodge a proof of debt as a creditor in the winding up of TBGL for any amounts owed to BGNV bondholders. The LDTC, in its capacity as the LDTC (BGNV), and in its capacity as the LDTC (TBGL/BGF), lodged a proof of debt in the liquidation of TBGL.[15] (Counsel for BGNV also indicated that the LDTC (BGNV) has lodged a proof of debt with the Curatoren for BGNV in the primary liquidation of BGNV in the Netherlands Antilles.[16]) However, under the BGNV Trust Deeds, the LDTC (BGNV) is not bound to take any steps to enforce the payment of moneys owed under the BGNV bonds unless two conditions are satisfied. First, it must be directed to take action, either by an extraordinary resolution of the bondholders, or in writing by the holders of a prescribed percentage of the value of the BGNV bonds. Secondly, it is not bound to take enforcement action unless it is indemnified by or on behalf of some or all of the bondholders against any costs it may incur in bringing such enforcement proceedings.[17]
[14] Eg Exhibit 1, Annexure TIL-8, cl 6(A)(4), cl 6(B)(4), cl 10(A).
[15] Exhibit 2, Annexure TIL-41, page 387.
[16] ts 820.
[17] Eg Exhibit 1, Annexure TIL-8, cl 10B.
The BGNV Trust Deeds also provide that individual bondholders would not be entitled to proceed directly against BGNV or TBGL, or to submit a proof of debt in a winding up of either company, unless the conditions for the LDTC (BGNV) to bring enforcement proceedings were satisfied and the LDTC (BGNV) failed to bring such proceedings.[18]
[18] Eg Exhibit 1, Annexure TIL-8, cl 10C.
The final term of each of the BGNV Trust Deeds which should be mentioned is that in the event of the winding up of TBGL, the claims of bondholders were postponed to the claims of all other creditors of TBGL (other than other subordinated creditors) and the LDTC (as the trustee) was required to hold any amount paid to it on trust, to be paid first to satisfy its own expenses, then to satisfy the claims of any other creditors which had not been satisfied in full out of the other resources of TBGL, and finally towards payment pari passu of the moneys and interest due upon the BGNV bonds or the conversion bonds. I will refer to this term as the subordinated and turnover trust clause. As discussed in the strike out judgment, a similar clause is to be found in each of the TBGL and BGF Trust Deeds.

The holders of the BGNV bonds

Pursuant to the BGNV Trust Deeds, the BGNV bonds are bearer bonds, under which the 'bondholders' are the 'persons who are for the time being the holders of the Bonds'.[19] Title to the bonds passes by delivery, and the person who holds each bond will be regarded as the absolute owner of it.[20] There is no register of the holders of the BGNV bonds. Consequently, the identity of all of the holders of the BGNV bonds at any one point in time is not known.
[19] Exhibit 1, Annexures TIL-8, TIL-9 and TIL-10, cl 1(A).
[20] Eg Exhibit 1, Annexure TIL-8 Second Schedule, cl 1(B).
However, the identity of some of the holders of the BGNV bonds is known. ICWA holds a very small number of some of the BGNV bonds.[21] Further, at various times since BGNV went into liquidation, information concerning the identity of other holders of BGNV bonds has come to light.
[21] Exhibit 1, [22].
However, the evidence before the Court indicates that other than when a bondholder chooses to reveal its identity and the extent of its bondholding, it is difficult for any third party to ascertain that information. By way of example, one of the holders of BGNV bonds, at least in 2014, was a company called Plaza BV, which was registered in the Netherlands but which had an address in Curacao.[22] However, it appears that Plaza BV subsequently merged with a company registered in Luxembourg (eventually called Plaza Capital S.a.r.l) which itself was later deregistered in Luxembourg, and registered in Anguilla as Plaza Capital Ltd. Plaza Capital Ltd subsequently merged with another company registered in Anguilla, called Plaza BV.[23]
[22] Exhibit 2, Annexure TIL-42, page 1059, [5].
[23] Exhibit 1, [25] - [32].
By way of further example, in 2013, Forbes Hare LLP (Forbes Hare), solicitors in London, advised the solicitors for the Liquidator that two of their clients ‑ Cambridge Distressed III Limited (Cambridge) and Liverpool Distressed IV Limited (Liverpool), both registered in the British Virgin Islands ‑ had interests in some BGNV bonds. Forbes Hare claimed that Cambridge was the beneficial owner of BGNV bonds of an unspecified value, while Liverpool was said to own a significant number of BGNV bonds. Since then, however, Cambridge has been deregistered in the British Virgin Islands.[24] The holder of the bonds in which it previously claimed an interest is not known.
[24] Exhibit 1, [33] - [37].
Even if it is assumed that Plaza BV and Liverpool continue to hold the BGNV bonds to which I have referred, and bearing in mind that ICWA continues to hold a small number of BGNV bonds, it remains the case that the holder or holders of the very large majority of the total value of the BGNV bonds which were issued remains unknown.[25]
[25] Exhibit 1, [38].
The evidence before the Court indicates that the LDTC is aware of the identity of some, but not all, of the holders of BGNV bonds. In 2014, the solicitors for the LDTC in London had discussions with two substantial holders of BGNV bonds.[26] The LDTC has declined to provide ICWA's solicitors with the identity of the holders of the BGNV bonds, or any communications between it and BGNV bondholders since COR 146 of 2014 was commenced in 2014.[27] Those bondholders have not responded to requests by the LDTC's solicitors for authority to disclose their identities to ICWA for the purpose of the Proceedings.[28]
[26] Exhibit 1, Annexure TIL-36.
[27] Exhibit 1, Annexure TIL-38.
[28] Exhibit 1, Annexure TIL-41.
ICWA's solicitors have made enquiries of other parties they understand may have knowledge of the identity of BGNV bondholders. In response to those enquiries, BGNV's solicitors in the Proceedings, Lipman Karas, acknowledged that their clients (that is, BGNV and its Australian liquidator) have had, and anticipated that they would continue to have, dealings with persons or entities claiming to be BGNV bondholders, or claiming to be representatives of BGNV bondholders. However, Lipman Karas advised that their clients regarded those communications as confidential, and in any event, Lipman Karas had not verified the claims of those persons to be BGNV bondholders.[29]
[29] Exhibit 2, [9] - [10] and Annexure TIL-42.
ICWA's solicitors also made enquiries of the Liquidator. His solicitors advised that from time to time, entities claiming to be BGNV bondholders had contacted him, but he had not attempted to verify their claims to be BGNV bondholders. The Liquidator's solicitors also advised ICWA that in 2014, the Liquidator was informed by Mr Louis Reijtenbagh, a representative of Plaza BV, that an entity known as Elliott Management Corporation 'was behind the clients represented by Forbes Hare' (that is, Cambridge and Liverpool), and that Mr Reijtenbagh believed that their bond holdings represented between 15% ‑ 20% of the total BGNV bonds.[30]

Steps taken to notify BGNV bondholders of the Proceedings and of the Applications, contact from one of the BGNV bondholders, and evidence of the attitude of some BGNV bondholders to the Proceedings

[30] Exhibit 2, [7], [8], [11] - [13].

As I have already mentioned, in late 2013, Forbes Hare contacted the Liquidators' solicitors and indicated that they acted on behalf of two parties with interests in the BGNV bonds. Forbes Hare wrote to the Liquidators' solicitors again in January 2014, when a settlement of the Bell Litigation was under consideration, and before the commencement of the Proceedings. Amongst other things, Forbes Hare advised:[31]
[31] Exhibit 1, Annexure TIL-32.
We have been in correspondence with both the liquidators for BGNV (the 'curatoren') and LDTC in relation to the meetings that will shortly be convened for the bondholders of the [BGNV] trust deeds to vote on resolutions approving the entry by LDTC into a deed of settlement relating to litigation with certain banks in the Australian courts.
Our client does not intend to sanction LDTC's entry into the deed of settlement unless the interests of the BGNV bondholders are protected against attempts by any subordinated creditors of TBGL or BGFP (sic) to improve their positions in the liquidations at the expense of BGNV, and will encourage other BGNV bondholders to adopt a similar position.
We notified the curatoren, who we understand will be convening the meetings, of our position and that our client requires an extraordinary resolution to be put forward at the bondholders meetings when convened. …
We understand that LDTC has in fact executed a deed (referred to as a 'Second Supplemental Deed') which would enable the desubordination of the BGFP (sic) bondholder (ICWA), though we also understand that that deed has not become effective and that LDTC has given certain undertakings to the Australian court. In the circumstances our client would be content for the resolution to be amended to cater for these facts … .
The curatoren have not adhered to the request to convene a meeting to put our client's proposed resolution to the bondholders … . … [O]ur client will proceed to convene a meeting of the bondholders itself.
…
We further note in relation to our request that:
1.We understand that a liquidator has a duty to the creditors to act impartially and should treat all creditors of the same rank equally. Any desubordination of ICWA would involve preferring ICWA to the other creditors of the companies, in particular BGNV, which is an unsubordinated unsecured creditor whose interests would be diluted. Being party to any desubordination of ICWA would therefore give a preference to ICWA post-liquidation which would be a breach of your client's duty as liquidator of TBGL.
2.As indicated above, we understand that LDTC has executed a deed referred to as a Second Supplemental Deed which would have the effect of desubordinating ICWA, and that LDTC did so '…as an integral part of the funding arrangements for the Bell litigation … .' We have not, however, been provided with any justification as to why [that was so].
3.TBGL provided a covenant to LDTC in its capacity as trustee under the BGNV Trust Deeds which states '… The Guarantor covenants with the Trustee that the Guarantee constitutes a direct, unconditional, unsecured and subordinated obligation of the Guarantor and ranks and shall rank equally with all its other present and future unsecured and subordinated indebtedness.' Any step by TBGL (through its liquidators), whether by the liquidators' execution of the Second Supplemental Deeds or any application under Section 564 which has the effect of paying funds to a presently subordinated creditor of TBGL, would be in breach of covenant.
(emphasis added)
The tone of this correspondence suggests that the BGNV bondholders represented by Forbes Hare would wish to oppose any attempt by ICWA ‑ whether through the pursuit of the Proceedings in this Court, or otherwise ‑ which might have the effect of altering ICWA's position as a subordinated creditor under, or which would in any way impact on the operation of the subordination and turnover trust clauses in, the TBGL/BGF Trust Deeds and the BGNV Trust Deeds. I will return to the significance of that viewpoint later in these reasons.

Attempts to notify the BGNV bondholders of the Proceedings, and the Applications

ICWA's solicitors have attempted to contact all persons they understand may hold BGNV bonds, and to notify them about the Proceedings and the Applications. They sent correspondence to Plaza BV, to Forbes Hare, to Elliott Management Corporation and to a number of other persons they think may have knowledge of the identity of the BGNV bond holders.[32]
[32] Exhibit 2, [21] - [36], [37] - [46].
The LDTC has also taken steps to provide notice of the Proceedings to the holders of bonds under the BGNV Trust Deeds, by publishing notices in international financial newspapers and by issuing notices through the European Clearing Systems.[33]
[33] Exhibit 1, Annexure TIL-38.
Further, in March 2018, the LDTC took steps to provide notice of the Applications, and published further notices in major international financial newspapers, and issued notices through the European Clearing Systems (Notices). Those Notices indicated that in the absence of funding and indemnification, the LDTC (BGNV) was unlikely to participate in the hearing of the Applications. The Notices also invited any BGNV bondholders who required further information, or who wished to oppose, or fund any action in response to, the Applications, to make contact.[34]
[34] Exhibit 2, [59], Annexure TIL-42, page 350 - 352.
It is apparent that reasonable steps have been taken to notify the BGNV bondholders of the Proceedings, and of the Applications.

The response of some BGNV bondholders

The LDTC's solicitors subsequently advised ICWA's solicitors that they had received responses to the Notices from some BGNV bondholders, and that they had provided documents to some BGNV bondholders, but that those discussions were confidential, and that the LDTC (BGNV) had not received instructions, funding or indemnification that would enable it to take any action in respect of the Applications.[35]
[35] Exhibit 2, [61], [65], Annexure TIL-42, page 364 - 370.
On 10 May 2018, the LDTC (BGNV) advised the parties to the Proceedings of the following:[36]
We have been requested on behalf of a holder of 2 of the 3 series of BGNV Bonds to convey to the parties that the holder objects to LDTC in its capacity as Trustee for the BGNV Bonds being joined as a party to proceedings COR 146 of 2014 and CIV 2666 of 2016 as a representative of the BGNV Bondholders and to LDTC participating in a mediation in that capacity and that the reasons for this objection are because the holder considers that 1) LDTC is already funded and indemnified to represent certain BGNV Bonds; and 2) LDTC also represents other interests that compete with those of BGNV Bondholders (and specifically those arising under the holder's BGNV Bonds) and LDTC cannot fairly, objectively represent competing claims.
In addition, the holder considers that BGNV Bondholders other than Plaza are under represented or even not represented at all in the [Proceedings]. Accordingly, without being given a fair representation the holder states that BGNV Bondholders will have to reserve their rights in full and thus rendering any and all mediation incomplete and against natural justice.
We relay these views at the request of the holder's representative but in so doing neither adopt nor accept the views expressed.
(emphasis added)
[36] Exhibit 6, Annexure SBF-7; Exhibit 3, [7].
The identity of that bondholder was not revealed, however in view of the following correspondence, it may be that that bondholder was a party represented by LONSIN Capital Limited (Lonsin).
In response to that letter, ICWA's solicitors wrote to the LDTC's solicitors and requested that the LDTC convey to the bondholder in question the following:[37]
If the unnamed BGNV Bondholder is genuinely interested in ensuring its interest[s] are represented in the [Proceedings], and by someone other than LDTC, then we invite that bondholder to identify itself; disclose its contact details; appear in the [Proceedings]; and/or identify a suitable alternative representative.
[37] Exhibit 6, Annexure SBF-8; Exhibit 3, [8].
On 12 May 2018, ICWA's solicitors received an email from Mr Jonathan Croft, Director of Lonsin, which was apparently sent in response to the letter to which I have just referred. Mr Croft advised:[38]
As time is of the essence, we have agreed with LDTC that we would communicate with you as lawyers for ICWA directly and keep LDTC informed.
In answer to your request 2 in the letter [namely if a BGNV bondholder wished to act as a representative, or had an alternative suggestion for a representative, the LDTC should advise and ICWA would give serious consideration to any such proposal] we are LONSIN Capital Limited, … as proposed representative.
[38] Exhibit 3, Annexure TIL-44.
Mr Croft's email also indicated that Lonsin was the investment manager for certain BGNV bondholders under two of the BGNV bond series, namely the LONSIN Global Credit Fund Limited, and Watersfield Limited, each of which claims to hold BGNV bonds of a relatively modest nominal value.[39]
[39] Exhibit 3, Annexure TIL-44.
ICWA's solicitors responded to that email by an email dated 15 May 2018. Amongst other things, ICWA's solicitors provided background information about the Proceedings and the Applications, and sought confirmation:[40]
(a)that Lonsin seeks to be represented in the [Proceedings] and mediation;
(b)whether you would be prepared to support LDTC being appointed as the BGNV bondholder representative in the [Proceedings];
(c)if the answer to (b) is no, whether Lonsin would be prepared to act as the BGNV bondholder representative in the [Proceedings];
(d)if the answer to (c) is no, whether Lonsin has an alternative suggestion as to who could be the BGNV bondholder representative in the [Proceedings].
[40] Exhibit 3, Annexure TIL-47.
On 15 May 2018, Mr Croft responded to that correspondence. Mr Croft advised:[41]
We confirm, we wish to be heard in the [Proceedings]. It is however, too early for us to tell what our position will be in respect of the orders sought by ICWA.
We would welcome the chance to speak to ICWA and yourselves to try to understand better each other's position.
[41] Exhibit 3, Annexure TIL-48.
By a letter emailed to ICWA's solicitors on 16 May 2018, Mr Croft advised:[42]
I note your statement 'if orders are made in the [Proceedings] appointing LDTC as representative of the BGNV bondholders, it would remain open to any BGNV bondholder to seek to appear and otherwise participate in the proceedings in its own interests. ICWA will not object if Lonsin seeks to take this approach.'
I can confirm that as a duly appointed fund manager and representative of BGNV bondholders, who have held bonds since the 1990s, Lonsin Capital Limited would like to ask the Court to consider joining Lonsin to mediation and making such order[s] as it deems fit.
Lonsin has been in regular discussions with LDTC and made it clear to LDTC that in the first instance Lonsin is seeking to represent its own clients who own BGNV bonds.
As a director of Lonsin Capital Limited … I have experience of serving on numerous creditor committees in insolvency proceedings and schemes of arrangement in several jurisdictions. …
…
To assist the Court in its consideration of the [Applications], we kindly ask that you provide a copy of this letter to the Court.
[42] Exhibit 3, Annexure TIL-49.
That letter was put before the Court in Mr L'Estrange's third affidavit, sworn 17 May 2018 (that is, the day prior to the hearing of the Applications). As Lonsin's attitude to the Applications was not entirely clear from that letter, I had my associate ask ICWA's solicitors for clarification as to what orders Lonsin sought that the Court make, and as to whether Lonsin wished to be heard on the Applications.[43]
[43] Exhibit 4.
ICWA's solicitors sent an email to Mr Croft in the following terms:[44]
In this respect, ICWA's understanding of your letter of 16 [May] 2018 is that Lonsin's concern is to protect its ability to attend any mediation and possibly the proceedings in its own right, but it does not wish to assume a broader role as a representative, or otherwise wish to be heard in relation to [the Applications].
[44] Exhibit 4.
By email dated 17 May 2018, Mr Croft responded as follows:[45]
In answer to your question below, ICWA's understanding is correct. Lonsin is asking the Court to grant Lonsin the right to attend any mediation process. End. The rest is not applicable at this point in time.
[45] Exhibit 4.
I digress to make three observations about Lonsin's stated position. First, while the outcome of the Applications may not have been 'applicable at this point in time' as far as Lonsin is concerned, that is not the case for the parties to the Proceedings. The Applications were brought before the Court for determination, in advance of the mediation, so that (if the orders were made) there would be some certainty about the position of the BGNV bondholders in the Proceedings in advance of that mediation. Accordingly, I do not intend to delay dealing with the Applications.
Secondly, as for Lonsin's participation in the mediation, I do not consider it appropriate to make an order entitling Lonsin (as a third party) to participate in the mediation, when the terms on which that mediation was to proceed had been agreed privately between the parties to the Proceedings, and included terms as to confidentiality. However, it clearly remains open to the parties to agree amongst themselves that Lonsin should be permitted to participate in any settlement discussions.[46]
[46] ts 777 - 779.
Thirdly, on 1 June 2018, I made orders granting liberty to any BGNV bondholder to apply to vary the representative orders I had made. Those orders are intended to enable any BGNV bondholder, or representative thereof (including Lonsin) to apply to act as a representative of other BGNV bondholders. It also remains open to any BGNV bondholder to apply to be joined as a party to the Proceedings in its own right.

The position of the LDTC and its proposal for managing its role as trustee under the TBGL/BGF Trust Deeds and as trustee under the BGNV Trust Deeds

The LDTC is a sophisticated corporate party whose business is, or includes, acting as a trustee. The LDTC is a wholly owned subsidiary of the Law Debenture Group which, according to its 2016 Annual Report, is a global investment trust, listed on the London Stock Exchange, and which acts as a trustee of a variety of trusts, and on behalf of individuals, corporations and other organisations around the world.[47]
[47] Exhibit 1, [41] and Annexure TIL-35.
The evidence indicated that the LDTC has given consideration to how it will respond if an order is made that it be joined in each of the Proceedings as the representative of the BGNV bondholders. Since 2014, the solicitors for the LDTC (BGNV) have had discussions with two substantial BGNV bondholders in relation to the role and involvement of the LDTC (BGNV), and there was some initial support for the LDTC (BGNV) to be represented and involved, although no BGNV bondholder has so far agreed to provide directions, funding or indemnification to the LDTC (BGNV) in relation to the Proceedings.[48]
[48] Exhibit 1, Annexure TIL-36.

The LDTC's intention is that if it receives directions, funding and indemnification from the BGNV bondholders, the LDTC proposes to delegate to a subsidiary which is separate and independent to the team responsible for administering the LDTC's role as the LDTC (TBGL/BGF) limited authority to receive and consider independent legal advice and to determine what steps, if any, should be taken by the LDTC (BGNV) or the subsidiary.[49]
[49] Exhibit 1, Annexure TIL-40.
The LDTC outlined its position in a letter dated 14 May 2018, which its solicitors wrote to the parties to the Proceedings. They advised as follows:[50]
[50] Exhibit 6, Annexure SBF-9.
LDTC (BGNV) has had only limited communication from BGNV Bondholders in relation to the [Applications] and no BGNV Bondholder has been willing to provide even initial funding for preliminary legal advice for LDTC (BGNV). Nor has any party to the [Proceedings] indicated a willingness to provide funding for LDTC (BGNV). For reasons explained in correspondence, LDTC (BGNV) is not able to take an active part in relation to the [Applications].
It follows that LDTC (BGNV) is not able to make submissions or respond to the submissions of others. There are nevertheless certain matters which LDTC (BGNV) considers should be drawn to the attention of the parties:
1.Whilst LDTC (BGNV) has concerns as to whether its joinder in either its trustee capacity or a representative capacity can achieve the objective sought by ICWA, it is not unwilling, in principle, to participate provided that the appropriate framework for participation is in place.
2.In circumstances where BGNV Bondholders have been informed that they are highly unlikely to receive any distribution from TBGL as Guarantor and where they have no clarity as to what they might ultimately receive from BGNV, it is not unnatural for them to be hesitant about committing to fund the BGNV Trustee in what could be a lengthy process the costs of which cannot accurately be predicted but which are likely to be significant.
3.From the limited communications which LDTC (BGNV) has received from BGNV Bondholders, it is not able to form a view as to what BGNV Bondholders generally might consider an acceptable outcome. It is possible that there will be differing views as between BGNV Bondholders, whether of the same series of BGNV Bonds or each series. Also the position of Plaza differs from that of other BGNV Bondholders because of its funding arrangements with BGNV and this may add to the complexity.
4.Although the BGNV Bonds are no longer formally listed, prices are recorded on Bloomberg for 2 of the 3 issues. …
5.As regards holding multiple roles, the holding of such multiple roles is authorised under the applicable trust deeds. In its capacity as trustee for the [bonds under the TBGL/BGF Trust Deeds], LDTC (TBGL/BGF) is taking a neutral position for the reasons explained in its SFIC (that is, that both classes of beneficiaries, Bondholders and Senior Creditors are represented). In its capacity as trustee for the BGNV Bonds, LDTC (BGNV) has proposed a regime to provide for proper representation of the interests of BGNV Bondholders should it participate in the proceedings which participation would require either an appropriate Bondholder approval or sanction by the English High Court.
… [I]n circumstances where there are no liquid assets within the trusts and no other party has been willing to fund and indemnify the trustee, there can be no reasonable expectation that the BGNV Trustee will itself fund participation in the proceedings or any associated mediation … .

A preliminary issue ‑ whether the LDTC is before the Court and has been served with the Applications

BGNV's submission

Counsel for BGNV submitted that the LDTC (BGNV) is not before the Court in CIV 2666 of 2016 or in COR 146 of 2014, and that the solicitors for the LDTC (TBGL/BGF), Clayton Utz, do not act for the LDTC (BGNV).
Counsel for BGNV submitted that in CIV 2666 of 2016, ICWA did not indorse its writ to indicate that the LDTC was being sued in its capacity as the trustee of any particular trust. Counsel for BGNV submitted that in that action, the LDTC was sued only in its personal capacity.[51] He submitted that as a consequence, neither the LDTC (TBGL/BGF) nor the LDTC (BGNV) were parties to CIV 2666 of 2016.[52]
[51] BGNV submissions [13].
[52] BGNV submissions [14].
Counsel for BGNV also noted that Clayton Utz, the solicitors for the LDTC in CIV 2666 of 2016, have indicated that they only act for the LDTC (TBGL/BGF) and that they do not act for the LDTC (BGNV), and that before the LDTC (BGNV) could take any step in the Proceedings, it would require directions from the BGNV bondholders, together with funding and indemnification from them to do so, and that it would then need legal representation independent from that of the LDTC (TBGL/BGF).
In relation to COR 146 of 2014, counsel for BGNV submitted that while the LDTC (TBGL/BGF) was a party to COR 146 of 2014 (by virtue of the order I made on 1 February 2018), the LDTC (BGNV) was not a party to that Proceeding.
Counsel for BGNV submitted that this state of affairs meant that there was 'an immediate procedural problem for the determination of ICWA's joinder application.'[53] He submitted that the Court has no jurisdiction over any person other than those properly before it as parties, or persons submitting to the jurisdiction of their own free will,[54] and that the following procedural steps would therefore need to be taken before ICWA could pursue its Applications. In CIV 2666 of 2016, he submitted that ICWA 'would need to apply for and obtain leave to amend its writ … to join LDTC as a defendant in its capacity as trustee of the BGNV trusts'; next that ICWA 'will need to apply for and obtain leave to serve the amended writ and joinder application out of the jurisdiction on LDTC (BGNV)'; and finally, 'assuming leave is given, ICWA will then need to serve that amended writ and application on LDTC (BGNV)'.[55] He submitted that similar steps would also need to be taken in COR 146 of 2014.
[53] BGNV submissions [18].
[54] Counsel for BGNV relied on Brydges v Brydges and Wood [1909] P 187, 191 (Farwell LJ); Templeton v Leviathan Pty Ltd (1921) 30 CLR 34, 57 (Knox CJ), 70 (Higgins J).
[55] BGNV submissions [20].
Counsel for BGNV submitted that until the LDTC (BGNV) is 'properly before the Court in COR 146/CIV 2666 there is no utility in determining ICWA's application for representative orders'.[56]
[56] BGNV submissions [19].
I am unable to accept BGNV's submissions. With respect, BGNV's submissions conflate the concept of the legal personality of a party, and its submission to the jurisdiction of the Court by filing an appearance in a proceeding, on the one hand, with the capacity in which a party is sued, on the other hand. In my view, it is clear that in each of the Proceedings, the LDTC is a party to the proceedings, and that the LDTC has filed an appearance by which it has submitted to the jurisdiction of the Court. It is also clear that the LDTC's solicitors in each of the Proceedings have been served with the Applications. In order to explain those conclusions, it is necessary to start by setting out the procedural history of each of the Proceedings.

CIV 2666 of 2016 ‑ procedural history

For reasons which need not now be elaborated upon, CIV 2666 of 2016 was initially commenced in the High Court as action number P28 of 2016. The LDTC was named as the eleventh defendant to that action.[57] The LDTC, purportedly in its capacity as the LDTC (TBGL/BGF), filed an appearance in P28 of 2016.[58] The High Court remitted P28 of 2016 to this Court, where it was renumbered CIV 2666 of 2016, but otherwise the action continued as if the steps taken in the High Court had been taken in this Court.[59]
[57] Exhibit 2, Annexure TIL-42, page 818 - 834.
[58] Exhibit 2, Annexure TIL-42, page 836.
[59] Exhibit 2, Annexure TIL-42, page 838.
The starting point in assessing the significance of that appearance, for the purpose of the present argument in relation to service of the Application in CIV 2666 of 2016, is what the High Court Rules 2004 (Cth) (HC Rules) say about the filing of appearances. A party to an action in the High Court may file an appearance by a solicitor, in form 7 of the HC Rules. If a defendant wishes to object to the Court's jurisdiction, that defendant may file a conditional appearance, in form 9 of the HC Rules. The appearance filed by the LDTC in the High Court was not conditional.
The LDTC thus appeared in P28 of 2016, and submitted to the jurisdiction of the High Court. When it did so, the LDTC purported to limit its appearance to an appearance in its capacity as the trustee under the TBGL/BGF Trust Deeds. An appearance of that kind ‑ that is, limited to a particular capacity - is not contemplated by the HC Rules (or the RSC for that matter). By filing an appearance in those terms, it appears that the LDTC was simply endeavouring to draw to the attention of the parties and the Court that, in the absence of any clarity on the face of the Writ, it understood that it was only being sued in its capacity as the trustee under the TBGL/BGF Trust Deeds and not as a trustee under the BGNV Trust Deeds.
In the SIFC which it has filed in CIV 2666 of 2016, the LDTC has indicated that it appears only in its capacity as the trustee under the TBGL/BGF Trust Deeds.[60] However, at a strategic conference for the Proceedings on 1 February 2018, Clayton Utz filed a statement of issues and outline of submissions in each of the Proceedings. They filed that document on behalf of the LDTC.

COR 146 of 2014 ‑ procedural history

[60] Exhibit 1, Annexure TIL-34.

COR 146 of 2014 is an application by the Liquidator for orders pursuant to s 564 of the Corporations Law or the Corporations Act 2001 (Cth). That Proceeding was commenced by the Liquidator by filing an Originating Process, which did not name any party as a defendant to the Proceeding.
On 1 September 2014, I made orders that the Liquidator notify certain parties, including the LDTC, of that Proceeding. I also ordered that any person who received notice of the Proceeding, and wished to appear at the hearing of it, should file a notice of appearance.[61] (The objective of that order was to identify the parties who wished to be heard in that Proceeding. The formal joinder of those parties as defendants occurred later.)
[61] Exhibit 2, Annexure TIL-42, page 572 - 574.
The LDTC filed two notices of appearance in COR 146 of 2014. One purported to be filed on behalf of the LDTC (TBGL/BGF) while the other purported to be filed on behalf of the LDTC (BGNV).
The LDTC also filed an affidavit of Mr Fleming, a solicitor employed by the LDTC's solicitors, to explain why the LDTC had taken that rather unusual course. Mr Fleming deposed the LDTC, in its capacity as the trustee of the BGNV Trust Deeds:[62]
consider[ed] it important to draw the Court's attention to the particular capacities in which the enclosed notices of appearance were filed. This is because whether LDTC (BGNV Trustee) will take an active role in the Proceeding will depend on it:
•receiving directions from the requisite holding of bonds, in accordance with the BGNV Trust Deeds; and
•securing, from those bondholders, indemnification arrangements satisfactory to it.
[62] Exhibit 1, Annexure TIL-36, [7].
There was, thus, no suggestion by the LDTC that it objected to the jurisdiction of the Court to deal with COR 146 of 2014, or that it objected to its participation in that Proceeding. (It could hardly have done so, in view of its own indication, by the filing of the notices of appearance, that it wished to be heard.)
On 17 October 2014, I made orders joining a number of parties as defendants to the Proceeding. Initially, the LDTC was not named as a defendant, because the question whether it had instructions to appear both in its capacity as the trustee under the BGNV Trust Deeds, as well as under the TBGL/BGF Trust Deeds, had not been confirmed, and it was convenient to let that issue lie while the LDTC sought to clarify its instructions.[63] At that stage, I therefore simply granted leave to the LDTC to be heard.
[63] Exhibit 2, Annexure TIL-42, page 576.
By 1 February 2018, the position had not been entirely resolved. The LDTC consented to its being joined as a defendant in its capacity as the LDTC (TBGL/BGF), but there was no agreement to its being joined as a defendant in its capacity as the LDTC (BGNV). Accordingly, on that occasion, I made an order that the LDTC, in its capacity as the trustee under the TBGL/BGF Trust Deeds, be joined as a party to that Proceeding and be designated as the fifth defendant.
I note, for completeness, that at that stage it was contemplated that ICWA would make an application for a representative order under O 18 r 13 RSC (representative order), and I made programming orders in respect of that contemplated application, with a view to ensuring that it could be heard and determined prior to the foreshadowed mediation of the Proceedings in June 2018.

The LDTC has been served with the Applications

The Applications were served on the LDTC by service on Clayton Utz, the solicitors for the LDTC specified in the appearances filed on its behalf.
I do not accept the submission by counsel for BGNV that service on Clayton Utz did not constitute service on the LDTC because Clayton Utz does not represent the LDTC in its capacity as the trustee under the BGNV Trust Deeds. The only solicitors on the record for the LDTC in each of the Proceedings are Clayton Utz.
Furthermore, solicitors and counsel instructed by Clayton Utz have appeared on behalf of the LDTC at a number of hearings, and most recently at the strategic conference on 1 February 2018, without qualification as to the basis for that appearance. The orders made at the latter hearing, for the programming of the present Applications, contemplated service of the Applications on the LDTC. Moreover, the position of the LDTC (BGNV) has been conveyed to the Court and to the other parties to the Proceedings, in correspondence from Clayton Utz.[64] The LDTC itself did not seek to contend that it has not been served with the Applications. There can be no doubt that the LDTC (as the trustee under the BGNV Trust Deeds) has had notice of the Applications.
[64] Exhibit 5, Annexures SBF-1 and SBF-2.
Once it was known that BGNV intended to question the service of the Applications on the LDTC, and in view of the indication by the LDTC that it did not intend to attend, or participate in, the hearing of the Applications, ICWA's solicitors requested confirmation from the LDTC's solicitors that the LDTC (BGNV) accepted that it had been served with the Applications, and that it had submitted to the jurisdiction of this Court for the purposes of the Proceedings.[65] In response to that letter, the LDTC's solicitors advised that the position of the LDTC (BGNV) had been 'clearly articulated' on a number of occasions, but that to the extent that there was a dispute between BGNV and ICWA as to whether the LDTC (BGNV) had been properly brought before the Court by ICWA, that was a matter for argument between those parties.[66] With respect, that was a response liable to obfuscate rather than clarify the position of the LDTC, and was of no assistance to the Court, save that no claim was made by the LDTC that it had not been served with the Applications.

No procedural impediment to the determination of the Applications

[65] Exhibit 2, [66] and Annexure TIL-42, page 371 - 372.

[66] Exhibit 2, [67], Annexure TIL-42, page 373 - 374.

The submission by counsel for BGNV that there is a procedural impediment to the determination of the Applications proceeded on a misconception, and must be rejected.
A legal person may be a trustee, and may be sued in that capacity. However, a trustee does not have an additional or qualified legal personality.[67]
[67]Yara Australia Pty Ltd v Oswal [No 2] [2013] WASCA 187 [259] (Pullin JA), [409] (Murphy JA); ACES Sogutla Holdings Pty Ltd (In Liq) v Commonwealth Bank of Australia [2014] NSWCA 402; (2014) 89 NSWLR 209 [16]; ALYK (HK) Ltd v Caprock Commodities Trading Pty Ltd and China Construction Bank Corporation [2015] NSWSC 1006 [26] (Black J); AMP Capital Investors Ltd v Parsons Brinckerhoff Australia Pty Ltd [2013] NSWSC 1633 [15] - [16] (Pembroke J).
The LDTC is a party to each of the Proceedings. There is no doubt that it has been served with the Proceedings, and it has entered an appearance in each of the Proceedings. The appearances it filed were not conditional. The LDTC has clearly submitted to the jurisdiction of this Court.
The attempt by the LDTC to enter appearances only in particular capacities appears to have been a response to both the lack of clarity as to the capacity in which it was sued in each of the Proceedings, and the practical difficulties that it has encountered, or anticipates that it will encounter, in participating in the Proceedings in its capacity as the LDTC (BGNV). Nevertheless, the appearance the LDTC purported to file on behalf of the LDTC (TBGL/BGF) in P28 of 2016, and the notices of appearance filed in COR 146 of 2016, were appearances by the LDTC. I therefore accept the submission of counsel for ICWA that as the LDTC is a party to each Proceeding, 'there is no additional or different person to sue, join or serve in order to obtain relief in respect of or affecting the so-called “BGNV trusts” '.[68]
[68] ICWA reply submissions [14] - [15].
There is, therefore, no procedural impediment to determining the Applications.

Clarification of the capacity in which relief is sought against the LDTC

As I understand the position, there is no dispute that the LDTC, as the trustee of the TBGL/BGF Trust Deeds, and as the trustee under the BGNV Trust Deeds, is a creditor in the liquidation of TBGL and BGF. Clearly, its interests as a creditor may be affected by the outcome of the Proceedings. The LDTC is thus a necessary party to each of the Proceedings. However, there is also no doubt that the capacity in which it has interests which may be affected by the Proceedings needs to be made clear. That is what is required by the RSC.
Order 6 r 5 RSC provides that
if the plaintiff sues, or the defendant, or any of the defendants, is sued in a representative capacity, the indorsements shall show, in accordance with such of the indorsements in Form No. 5 as is applicable to the case or by any other statement to the like effect, in what capacity the plaintiff or defendant sues or is sued.
As the examples in Form 5 make clear, the rule refers to a party suing or being sued in a particular capacity, such as an executor or administrator of the estate of a deceased person, or as a trustee, or as a principal or surety and so on. Ordinarily, that capacity will be identified in the title to the proceedings.[69]
[69] Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2 [249] (Refshauge ACJ).
Because CIV 2666 of 2016 is brought against the LDTC on the basis that, in its capacity as both the LDTC (BGNV) and the LDTC (TBGL/BGF), its interests will or may be affected by the outcome of that Proceeding, O 6 r 5 RSC requires that the indorsement on the Writ refer to its capacity as a trustee under those Trust Deeds. ICWA proposes to amend the LDTC's title in the Amended Writ to make clear the capacity in which it is sued.[70]
[70] ts 842 - 843.
The failure to indorse the Amended Writ in that way is merely an irregularity, which may be cured by an amendment of the Amended Writ.[71] An amendment to alter the capacity in which a party is sued does not constitute the joinder of a new party.[72]
[71] Commonwealth of Australia v Davis Samuel Pty Ltd (No 11) [2017] ACTSC 2; (2017) 316 FLR 159 [246], [259] (Refshauge ACJ).
[72] Bride and Bride as Trustees of the Pinwernying Family Trust v The Australian Bank Ltd (Unreported, WASC Full Ct, Library No 960565, 25 September 1996), 5-11 (Heenan J, Franklyn J & Wallwork J agreeing).

It might be thought that perhaps there is little point in the amendment ICWA now seeks to make to the Amended Writ, having regard to the content of the detailed SIFC filed by ICWA in the action,[73] which leaves no doubt that ICWA's case, in so far as it may affect the LDTC's interests, turns on the LDTC's role as the trustee under the TBGL/BGF Trust Deeds and the BGNV Trust Deeds. However, in light of the nature of the arguments which have already been advanced on the Applications, in my view it is important that the capacities in which the LDTC is sued are made clear in the Amended Writ, so that there is no doubt whatsoever about that issue.
[73] Cf Ashwin v Minara Resources Ltd [2006] WASC 75; (2006) 200 FLR 80 [26] (Master Sanderson).
Accordingly, it is appropriate to make an order in terms of order 1 in ICWA's minute of proposed orders in CIV 2666 of 2016.
The position is slightly different in respect of COR 146 of 2014, because of the different procedural history of that Proceeding, and because the rules applicable to that Proceeding are the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules) (which pick up the RSC, to the extent that they are not inconsistent with the Corporations Rules).
The orders I made on 1 February 2018, in COR 146 of 2014, to join the LDTC as a defendant to that Proceeding, also made clear that the LDTC was being sued in its capacity as the trustee under the TBGL/BGF Trust Deeds. The order I made, in those terms, reflected the fact that the RSC apply to proceedings under the Corporations Act, to the extent that they are not inconsistent with the Corporations Rules. As the LDTC was joined as a defendant to COR 146 of 2014 in its capacity as a trustee, it is appropriate that that particular capacity be indorsed on the Originating Process, just as it would be indorsed on a writ, pursuant to O 6 r 5 RSC.
In COR 146 of 2014, it is apparent from the nature of the issues which arise for resolution in that Proceeding, which may be discerned from the SIFCs which have been filed by the parties, that the LDTC's interests which may be affected by that Proceeding derive from its capacity as the trustee under the BGNV Trust Deeds as well as under the TBGL/BGF Trust Deeds. Consequently, it should now be made clear, by an indorsement in the Originating Process, that the LDTC is joined to that Proceeding in its capacity as the trustee under the BGNV Trust Deeds as well as its capacity as trustee under the TBGL/BGF Trust Deeds. The most convenient way for that to be achieved is to modify the order I made on 1 February 2018 so that the order joining the LDTC as a defendant in COR 146 of 2014 makes clear that it is joined in its capacity as a trustee under the TBGL/BGF Trusts and as a trustee under the BGNV Trust Deeds.
Finally, counsel for BGNV submitted that it was not open to a defendant in COR 146 of 2014 (as ICWA is) to apply for an order to clarify the capacity in which the LDTC is joined as a defendant in that Proceeding. As I understood his submission, it was that any such application had to be made by the Liquidator, as the plaintiff in that Proceeding.[74] That submission must be rejected. The Court has express power to order that a person who is, or claims to be, a creditor of a corporation be added as a defendant to a proceeding in the Court under the Corporations Act.[75] That order may be made on the application by the person or by a party to the proceeding, or on the Court's own initiative.[76] As ICWA is a party to the Proceeding, it was entitled to make the application for the order made on 1 February 2018, in which the LDTC was joined as a defendant in the Proceeding. I do not see any basis on which it could be said that ICWA is not entitled to apply to vary that order so as to clarify that the Proceedings are brought against the LDTC in its capacity as the trustee under the BGNV Trust Deeds as well as under the TBGL/BGF Trust Deeds.
[74] ts 839.
[75] Supreme Court (Corporations) (WA) Rules 2004 (WA) r 2.13(3).
[76] Supreme Court (Corporations) (WA) Rules 2004 (WA) r 2.13(4).
Accordingly, it is appropriate to make an order of the kind sought in order 1 in ICWA's minute of proposed orders in COR 146 of 2014.

Why it is appropriate to appoint the LDTC as the representative of bondholders under the BGNV Trust Deeds

In so far as ICWA sought a representative order in CIV 2666 of 2016, the Application was brought pursuant to O 18 r 13 RSC.
Order 18 r 13 RSC relevantly provides:
(1)In any proceedings concerning -
(a)the administration of the estate of a deceased person; or
(b)property subject to a trust; or
(c)the construction of a written instrument, including a statute or a regulation, rule or by-law made under a statute,
the Court, if satisfied that it is expedient to do so, and that one or more of the conditions specified in subrule (2) are satisfied, may appoint one or more persons to represent any person … or class who is or may be interested (whether presently or for any future, contingent or unascertained interest) in or affected by the proceedings.
(2)The conditions for the exercise of the power conferred by subrule (1) are as follows -
(a)that the person, the class or some member of the class, cannot be ascertained or cannot readily be ascertained;
(b)that the person, class or some member of the class, though ascertained, cannot be found;
(c)that, though the person or the class and the members thereof can be ascertained and found, it appears to the Court expedient (regard being had to all the circumstances, including the amount at stake and the degree of difficulty of the point to be determined) to exercise the power for the purpose of saving expense.
(3)Where in any proceedings to which subrule (1) applies, the Court exercises the power conferred by that subrule, a judgment or order of the Court given or made when the person or persons appointed in exercise of that power are before the Court shall be binding on the person or class represented by the person or persons so appointed.
(4)Where, in any such proceedings, a compromise is proposed and some of the persons who are interested in, or who may be affected by, the compromise are not parties to the proceedings … but -
(a)…
(b)the absent persons are represented by a person appointed under subrule (1) who so assents,
the Court, if satisfied that the compromise will be for the benefit of the absent persons and that it is expedient to exercise this power, may approve the compromise and order that it shall be binding on the absent persons, and they shall be bound accordingly except where the order has been obtained by fraud or non-disclosure of material facts.
In so far as ICWA sought a representative order in COR 146 of 2014, that Application was also brought pursuant to O 18 r 13 RSC. ICWA's position was that O 18 r 13 RSC applies by virtue of r 1.3(2) of the Corporations Rules. As I have already mentioned, r 1.3(2) provides that the RSC apply to proceedings under the Corporations Act to the extent that they are relevant and not inconsistent with the Corporations Rules.
Initially, ICWA sought an order under r 2.13(5) of the Corporations Rules, in the alternative to its Application for a representative order under O 18 r 13. (Under r 2.13(5), the Court 'may appoint a creditor or contributory to represent all or any class of the creditors or contributories on any question, or in relation to any proceeding, before the Court, at the expense of the corporation'.) ICWA later abandoned reliance on r 2.13(5) of the Corporations Rules. Given the terms of r 2.13(5), it is appropriate that I indicate, briefly, why I am satisfied that O 18 r 13 RSC applies in this case.
There is no doubt that O 18 r 13 RSC is relevant to the Applications. The question is whether it is inconsistent with the Corporations Rules, and r 2.13(5) in particular. There is no textual inconsistency. Rule 2.13(5) does not expressly exclude all rules in the RSC which confer power to join a party as a representative of other parties. Nor is there anything in r 2.13(5) which, by implication, excludes those rules in the RSC concerned with the joinder of a party as the representative of other parties.
It is also necessary to consider whether there may be an inconsistency between the operation of r 2.13(5) and O 18 r 13 in the particular circumstances of this case. Counsel for ICWA abandoned any reliance on r 2.13(5),[77] on the basis that there was a dispute in the case as to whether the BGNV bondholders can properly be regarded as creditors of BGNV, and rather than leave open the possibility of arguments as to whether that was so, ICWA was content to rely on O 18 r 13 RSC. Having regard to the limited evidence adduced on the Applications, and in view of the absence of any such argument at the hearing of the Applications on this question, I am not presently satisfied that r 2.13(5) of the Corporations Rules is capable of application in the circumstances of this case. That being so, no question arises of any practical inconsistency between its operation, and the operation of O 18 r 13 RSC, so as to exclude the latter rule from application in COR 146 of 2014.
[77] ts 802.
I turn next to consider whether the criteria for the exercise of the power to make an order under O 18 r 13 RSC are satisfied in this case.

The criteria for the application of O 18 r 13 are satisfied

It is apparent that the application of O 18 r 13 involves four criteria. First, there is a threshold criterion, which is set out in paragraphs (a) to (c) of O 18 r 13(1). Secondly, if that threshold criterion is met, then the power in O 18 r 13(1) may only be exercised if one or more of the preconditions for the exercise of that power are met. Those preconditions are set out in O 18 r 13(2). Thirdly, there is a question of the identity of the person or class of persons who may be the subject of the representative order. That is, a representative order may only be made with respect to a person or class 'who is or may be interested (whether presently or for any future, contingent or unascertained interest) in or affected by the proceedings'. Finally, if each of those criteria is satisfied, then the discretion in O 18 r 13(1) ‑ to appoint one or more persons to represent the person or class ‑ will be engaged, but will be exercised only if the Court 'is satisfied that it is expedient so to do'.
Turning to the threshold requirement, the Proceedings are clearly proceedings to which O 18 r 13 is capable of applying. The Proceedings concern the construction of a number of written instruments, not the least of which are s 564 of the Corporations Law or the Corporations Act, and the TBGL/BGF Trust Deeds (which are in materially similar terms to the BGNV Trust Deeds). Furthermore, the Proceedings concern property which is, or may be (in any distribution in the winding up of TBGL and BGF) subject to a trust, including the provisions of the TBGL/BGF Trust Deeds. The threshold criterion for the operation of O 18 r 13(1) is therefore satisfied.
Turning next to the conditions for the exercise of the power, which are set out in O 18 r 13(2), the first of these is clearly satisfied. The class of persons the subject of the representative orders sought by ICWA are the BGNV bondholders. Having regard to the matters set out above at [26] - [33], there is no doubt that some members of that class of persons cannot, or cannot readily, be ascertained. ICWA has taken such steps as are reasonably open to it to seek to ascertain the identity of any BGNV bondholders, but with little success. Those who may know the identity of at least some of the BGNV bondholders (such as the LDTC (BGNV) and possibly the Curatoren or liquidator of BGNV, or BGNV's solicitors) are not obliged, or willing, to disclose that information.
Having regard to the evidence on the Applications, the third criterion for the operation of O 18 r 13 is also clearly satisfied. Whether or not the BGNV bondholders may be described as creditors of BGNV, there is no doubt that they are members of a class of persons 'who … may be interested (whether presently or for any future, contingent or unascertained interest) in or affected by the proceedings'. Those words are extremely broad. It is apparent that the person or members of a class who are represented need not be directly, or presently, interested in the proceedings. It will be enough if the person or members of the class may be 'affected by' the proceedings.
Where a court is asked to make orders directly affecting the rights or liabilities of a non-party, that non-party is a necessary party and ought to be joined.[78]
[78] John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 [131] (French CJ, Gummow, Hayne, Heydon & Kiefel JJ); News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410, 523 - 525.
Clearly, that can be said of the BGNV bondholders. It is not necessary to engage in any detailed discussion of the numerous issues raised by the SIFCs filed so far in the Proceedings. It suffices to say that the action in CIV 2666 of 2016 involves a number of questions bearing on the construction and operation of the TBGL/BGF Trust Deeds (particularly the operation of the subordination and turnover trust clauses), and on the proper construction and operation of s 564 of the Corporations Law or the Corporations Act. The action in COR 146 of 2014 involves an application by the Liquidator for directions as to the distribution of the Proceeds of the Bell Litigation, pursuant to s 564. In so far as ICWA is concerned, its objective in the Proceedings is to secure the payment to it of a very considerable portion of the Proceeds recovered in the Bell Litigation, pursuant to s 564 of the Corporations Law or the Corporations Act, and to avoid the possibility that any or all of those funds will be subject to the subordination and turnover trust clauses (which would see those funds being paid to other creditors of TBGL or BGF instead), and to avoid the application of any obligation on the LDTC to distribute the funds it recovers to BGNV bondholders in accordance with the pari passu promise. If ICWA is successful, then clearly that would have a significant impact on the amount which may be available to other creditors of TBGL and BGF, and in turn would have an impact on whether any funds remained for distribution to the holders of bonds under the TBGL/BGF Trust Deeds and the BGNV Trust Deeds.
Furthermore, in so far as questions of the construction and operation of s 564 are concerned, if that section operates in such a way that payments made pursuant to s 564 are insulated from the application of the subordination and turnover trust clauses, then clearly that will affect the funds which will be available to the Senior Creditors of TBGL and BGF, and in turn, to the BGNV bondholders.
There is therefore no doubt that the BGNV bondholders are a class of persons who have a present or future interest in, or who may be affected by, the Proceedings.
I turn next to consider the meaning of the term 'expedient' and to consider the factors which are relevant in assessing the expediency of a representative order in this case.

The meaning of 'expedient' in O 18 r 13 RSC

Counsel for BGNV submitted that the question whether a representative order should be made under O 18 r 13 'boils down to whether it is expedient, in terms of saving of time and expense, to do so'.[79] As I discuss below, those are factors which are expressly relevant to O 18 r 13(2)(c) RSC. However, they are not the only factors which will be relevant to whether a representative order under O 18 r 13 should be made. My reasons for reaching that conclusion are as follows.
[79] BGNV submissions [23], relying on Basis Capital Funds Management Ltd v BT Portfolio Services Ltd [2008] NSWSC 555; (2008) 66 ACSR 580 [26] (Hammerschlag J) and JD Thompson Personnel Pty Ltd v Asgard Capital Management Ltd [2011] NSWSC 811 [13] (Hallen AsJ).
Order 18 r 13 does not expressly identify all of the factors which should be taken into account by the Court in order to be satisfied that it is 'expedient' to appoint a party to represent a person or class of persons. The factors which may be relevant may be discerned both from the ordinary meaning of the word 'expedient', from the surrounding statutory context in which that word appears, and from the purpose of the provision.
The word 'expedient' is an adjective, which means 'tending to promote some proposed or desired object; fit or suitable for the purpose; proper in the circumstances; conducive to advantage or interest, as opposed to right.'[80] In another, not entirely dissimilar statutory context, it has been construed to mean 'advantageous or merely appropriate or suitable to the circumstances of the case'.[81] In my view, the object or purpose for which a representative order must be 'expedient' is the conduct of the litigation as a whole, up to and including its ultimate resolution by a judgment of the Court, or by a compromise agreed to by the parties.
[80] Macquarie Dictionary Online; Oxford English Dictionary Online.
[81] In the context of the power of the Court under the Trustees Act 1962 (WA) to replace a trustee: see Elovalis v Elovalis [2008] WASCA 141; Northwest Capital Management v Westate Capital Ltd [2012] WASC 121; (2012) 264 FLR 424 [232] (Edelman J).
Three points can be made about the adoption of a test of 'expediency' for the exercise of the discretion conferred on the Court by O 18 r 13 RSC. First, the word 'expedient' is evaluative. It connotes the Court making an assessment of all of the circumstances of the particular case, and making a judgment as to whether the making of a representative order would promote the conduct of the litigation in question, or would be conducive or advantageous to the proper conduct, and resolution, of that litigation.
Secondly, the evaluative exercise involved, of itself, suggests that no narrow view should be taken of the range of factors which may be relevant to assessing expediency in any given case.
Thirdly, that conclusion is also supported by the terms of O 18 r 13(2)(c) which confirms that all of the circumstances of the case must be taken into account for the purpose of assessing whether it will be expedient for the conduct of the litigation in question, to make a representative order.
It is consequently neither necessary nor possible to attempt to list all of the factors which may be relevant to judging the expediency of making a representative order in any given case. Some guidance can, however, be derived from the statutory context.
One of the primary objectives of a representative order is apparent from O 18 r 13(3) and (4) RSC; a judgment or order of the Court which is made, or a compromise which is approved, after a representative order is made by the Court, will be binding on the persons represented pursuant to the representative order. The making of a representative order will thus advance the certainty and finality of the litigation. That consideration is clearly a factor relevant to assessing the expediency of making a representative order in any given case.
The making of a representative order will have implications for the persons or class of persons represented by the order, for the other parties to the litigation in question, and for the Court itself, in terms of how the litigation is conducted. By way of example, it is apparent from O 18 r 13(2)(c) that one aspect of the expediency of a representative order may lie in the balance, or trade off, between the cost of permitting all persons affected by a proceeding to individually participate in the proceeding, on the one hand, versus the implications for the parties, and the Court, of having similar issues explored by multiple parties, on the other hand. Those implications may include a lengthier hearing, at a greater cost, for the Court and for individual litigants. However, making a representative order may also reduce the likelihood of different arguments being advanced by virtue of the participation of a number of parties, and a range of different arguments may ultimately assist the Court in reaching a decision in a difficult case. In a case where the amount at stake is small, the potential for higher costs by virtue of a multiplicity of parties may be difficult to justify in the interests of justice. (Hence 'expediency', at least in the circumstances of O 18 r 13(2)(c), is to be judged having regard to all of the circumstances, including the amount at stake, and the degree of difficulty of the point to be determined, as compared with the expense of litigation in which all affected parties individually participate.) A consideration of the implications of a representative order for the persons subject to the order, for the other parties to the litigation, and for the Court in the just and efficient use of its resources to resolve disputes, will be relevant to determining whether it is expedient to make the order.

I am not persuaded by those submissions that it is not expedient to make a representative order, for the following reasons. First, in order to be satisfied of the expediency of a representative order in the Proceedings, it is not necessary for the Court to identify any or all future claims which might be made by a BGNV bondholder, much less to assess how or when such claims could be made or the merits of such claims. That would be an exercise in fruitless speculation. Secondly, even if one were to assume that the BGNV bondholders might consider claims in the nature of those canvassed by counsel for BGNV, it is immediately apparent that underlying those claims will be questions as to the proper construction of the TBGL/BGF Trust Deeds and the BGNV Trust Deeds, and as to the obligations of the parties to those Trust Deeds. If the BGNV bondholders are bound by the Proceedings, then they will necessarily be bound by the conclusion reached by the Court on those questions.
Thirdly, the making of representative orders of the kind sought does not preclude any BGNV bondholder who wishes to act as the representative of the BGNV bondholders as a whole, or to be individually joined to the Proceedings, from making an application to the Court. The opportunity for the BGNV bondholders to pursue such an order will be expressly reserved by an order of the Court. An order of that kind is somewhat unorthodox, but the purpose behind it is to leave no room for any confusion or doubt on the part of the BGNV bondholders that they may seek a variation in the representative orders that I propose to make.
Fourthly, the LDTC is clearly a person with the qualifications and experience to act as the representative of the BGNV bondholders in this case. In addition, it is clearly familiar with the underlying position of the BGNV bondholders under the BGNV Trust Deeds, by virtue of its role as the trustee under those Trust Deeds, and is in a position to convey information to, and to receive direction from, the BGNV bondholders. It also clearly has some knowledge of the identity of some of the bondholders.
It is clearly relevant to the expediency of the proposed representative orders that the LDTC has not consented to be appointed as the representative for the BGNV bondholders. However as I have already observed, the consent of the proposed representative does not preclude the making of a representative order. What is significant here is that the LDTC's position (as I noted at [58] above) is that it is not unwilling, in principle, to participate in the Proceedings as a representative party, provided that the appropriate framework for its participation is in place.
Fifthly, I have taken into account the concerns raised by the LDTC in relation to its appointment as a representative, but in my view, they do not render it inexpedient to appoint the LDTC as the representative of the BGNV bondholders.
The most immediate of those concerns was that the LDTC requires funding and indemnification from the BGNV bondholders before it would be in a position to actively participate in the Proceedings. Counsel for BGNV made much of this consideration as a practical impediment to the LDTC being able to adequately represent the interests of the BGNV bondholders.[110] He submitted that in appointing a representative, a court must endeavour to appoint a representative 'who will be a real protagonist for the represented class' and someone 'who, in a practical sense, has a real commercial and financial interest in the outcome of the proceedings, such that they will play an active role in the proceedings'.[111] Considerations of that kind may be most pertinent in the case of a representative appointed under O 18 r 13(2)(c) RSC. Further, while the appointment of a representative in a position to be a real protagonist for the represented class is no doubt desirable, the Court is limited by the circumstances of the case. In this case, no BGNV bondholder has indicated a willingness to act as the representative of all of the BGNV bondholders. The only suggested representative is the LDTC.
[110] BGNV submissions [24].
[111] BGNV submissions [25], citing ING Funds Management Ltd v JP Morgan Nominees Australia Ltd [2009] NSWSC 59 [17] - [25] and JD Thompson Personnel Pty Ltd v Asgard Capital Management Ltd [2011] NSWSC 811 [15] - [16].
Counsel for BGNV submitted that 'it is difficult to envisage a more unwilling representative than LDTC who has made it clear that without funding it will not play any role in the litigation'.[112] He therefore submitted that 'it cannot be said that the interests of the BGNV bondholders will be fairly and adequately represented before the Court'.[113] I am unable to accept that submission, for several reasons. First, once the representative orders are made, it will be up to the BGNV bondholders to determine if they wish to fund the LDTC in its representative role. They are not obliged to do so. They are entitled to choose not to fund the LDTC, in the knowledge that it will not then be in a position to actively participate in the Proceedings, and will simply abide by the result of the Proceedings. The bondholders may form the view that any issue that they might wish to raise will already be adequately canvassed by other parties, especially BGNV. Secondly, while there is no evidence as to the present financial means of any of the BGNV bondholders, it cannot be assumed that the BGNV bondholders are without the means to fund the LDTC in its representative role. As I noted at [58], there was some evidence that at least in 2014, two substantial holders of bonds under the BGNV Trust Deeds supported the LDTC, in its capacity as the trustee under the BGNV Trust Deeds, being represented and involved in the Proceedings.[114] Furthermore, there was evidence that some of the BGNV bondholders, including Plaza BV, have, in the past, funded the Curatoren of BGNV in the liquidation of BGNV.[115] It thus cannot be said that there is no possibility that one or more of the BGNV bondholders will provide funding for the LDTC to act as a representative of all of the bondholders. However, even if that were the case, the means and willingness of the BGNV bondholders to fund the active participation of a representative on their behalf cannot be determinative of whether a representative order should be made. Impecuniosity is not a bar to joining a party as a defendant. It could hardly be a bar to appointing a representative of a person or class of persons. Finally, even if the LDTC is unable to actively participate, by virtue of a lack of funding to do so, the representative orders will still be expedient in the sense that the BGNV bondholders will be bound by the decision of the Court in the Proceedings.
[112] BGNV submissions [30], referring to Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398, 408 (Brennan J).
[113] BGNV submissions [30].
[114] Exhibit 1, Annexure TIL-36.
[115] Exhibit 1, Annexure TIL-15, TIL-17.
A further concern of the LDTC is that its powers and authority are limited to those set out in the Trust Deeds and the LDTC (BGNV) is not a representative of the BGNV bondholders for all purposes. It was not entirely clear what this concern encompassed. Even if the LDTC's powers and authority are limited to those under the Trust Deeds, it is not immediately clear why that would mean that the LDTC will be hampered in acting as a representative for the purposes for which it is appointed as a representative of the bondholders by the Court under O 18 r 13. However, its ability to seek judicial direction may assist in overcoming any doubt about such matters.
A further concern raised by the LDTC was that acting as a representative may be difficult because the views and interests of all of the BGNV bondholders may not be identical. The answer to that concern appears to me to be that it is within the ability of the LDTC to determine the means by which it ascertains the directions of the BGNV bondholders in relation to the Proceedings, and to determine how best to manage its role as a representative in light of any directions given to it. Practical difficulties of this kind do not, in my view, militate against the appointment of the LDTC as a representative of the BGNV bondholders.
That brings me to the question of the position of conflict in which the LDTC may find itself as the representative of all of the BGNV bondholders. That was a concern identified by the LDTC's solicitors, and was a factor on which counsel for BGNV relied to demonstrate why it was not expedient to appoint the LDTC as the representative of the BGNV bondholders. He submitted that the LDTC had a conflict of interest in that the interests of the BGNV bondholders (under the BGNV Trust Deeds) and those of ICWA (as the bondholder under the TBGL/BGF Trust Deeds) were entirely inconsistent, yet the LDTC as the trustee of all of those trusts was required to act in the best interests of the bondholders under all of those Trust Deeds.[116] He also submitted that it could not be expedient to appoint the LDTC as the representative of BGNV bondholders when it had already been sued by one of the bondholders, Plaza BV, on the basis that it was in a position of conflict.[117] In addition, he submitted that the LDTC was subject to a conflict because it also owed a duty to the Senior Creditors under the turnover trust clauses in the Trust Deeds.[118]
[116] BGNV submissions [35] - [37].
[117] BGNV submissions [41], referring to Plaza BV v The Law Debenture Trust Corporation plc [2015] EWHC 43 (Ch) [34] - [36] (Proudman LJ).
[118] ts 829, 832.
In my view, the existence of conflicts does not diminish the expediency of appointing the LDTC as the representative of the BGNV bondholders, for the following reasons. First, at least in so far as ICWA is concerned, there will be no complaint about any conflict on the LDTC's part. As counsel for ICWA observed, as ICWA seeks the appointment of the LDTC (BGNV) as the representative of the BGNV Bondholders, 'it could hardly complain if LDTC, following its appointment, acted as representative of the BGNV Bondholders'[119] in the Proceedings. Secondly, conflicts of interest are capable of being managed in a variety of ways.[120] As the evidence discussed at [57] established, the LDTC has identified the means by which it proposes to manage any conflict in this case. If funding and indemnification is provided by the BGNV bondholders, the LDTC proposes to delegate to a subsidiary, independent from the staff responsible for administering the LDTC's role as the LDTC (TBGL/BGF), the authority to obtain advice, and take steps in, the Proceedings.[121] In addition, the LDTC contemplates that it may need to seek either judicial direction in relation to its participation, or the sanction of the bondholders at an extraordinary meeting. I am satisfied that it is within the competence and the capacity of the LDTC to manage any conflict, assisted by judicial directions or a vote of the bondholders.
[119] ICWA reply submissions [61].
[120] AMP Capital Investors Ltd v Parsons Brinckerhoff Australia Pty Ltd [2013] NSWSC 1633 [14] (Pembroke J).
[121] Exhibit 1, Annexure TIL-40.
Sixthly, while I am satisfied that ICWA has taken all steps reasonably open to it to draw the Applications to the attention of the BGNV bondholders, it is significant that no bondholder has sought to appear, or to convey their opposition to the appointment of the LDTC as a representative, or to suggest an alternative representative.
Seventhly, I am unable to accept the submission of counsel for BGNV that the representative orders sought would have no utility. Counsel for BGNV submitted that the making of a representative order would not necessarily preclude the BGNV bondholders from bringing other proceedings in the future. He submitted, for example, that the success of an Anshun estoppel argument in respect of any future claim would depend on it being established that the bondholders' claim could have been brought in the Proceedings, and that it was unreasonable for them not to bring that claim in the Proceedings. He submitted that the Court could not assume that that could be established here.[122] Furthermore, he submitted that joining the BGNV bondholders to the Proceedings would not preclude them from pursuing any personal claims they had after the Proceedings were resolved.[123] In my view, no point is served by speculating on the extent to which a representative order may or may not preclude BGNV bondholders from pursuing such other claims as they may contend are available to them. Even if the BGNV bondholders have personal claims which they contend they are entitled to pursue, that does not diminish the utility of making the representative orders to bind them to the result of the present Proceedings.
[122] BGNV submissions [78] - [92].
[123] BGNV submissions [93] - 96].
Eighthly, I do not accept the submission by counsel for BGNV that the appointment of the LDTC to represent the BGNV bondholders would be likely to result in increased costs and delay because it was 'virtually certain that LDTC would need to seek judicial advice about its approach to the representative role, including whether its proposal to delegate responsibility to a wholly owned subsidiary is an appropriate way for LDTC to manage its conflict of interest'.[124] I do not accept that if the LDTC needs to seek such advice, that that will result in any delay to the Proceedings. The trial of the Proceedings is provisionally listed to commence in the September 2019. That is more than 14 months away. There is ample time for the LDTC to seek such judicial direction as it requires to determine the extent and manner of its participation in the Proceedings.
[124] BGNV submissions [32].
Ninthly, I am unable to accept the submission by counsel for BGNV that it is not expedient to make a representative order under O 18 r 13 RSC when O 18 r 14 RSC enables proceedings to be brought against the LDTC as the trustee under the BGNV Trust Deeds, without any need to join the BGNV bondholders.[125] O 18 r 14 provides:
(1)Any proceedings … may be brought by or against trustees … in their capacity as such without joining any of the persons having a beneficial interest in the trust …; and any judgment or order given or made in those proceedings shall be binding on those persons unless the Court in the same or other proceedings otherwise orders on the ground that the trustees … could not or did not in fact represent the interests of those persons in the first-mentioned proceedings.
(2)Subrule (1) is without prejudice to the power of the Court to order any person having such an interest as aforesaid to be made a party to the proceedings or to make an order under rule 13.
[125] BGNV submissions [43] - [45].
I am not persuaded that O 18 r 14 militates against the expediency of making the representative orders under O 18 r 13 in the present case, for the following reasons. First, O 18 r 14(2) makes clear that the Court's power under O 18 r 14 does not prejudice its power to make a representative order under O 18 r 13. Secondly, O 18 r 14(1) makes clear that orders against trustees will not bind the beneficiaries under the trust if a court concludes that the trustees could not, or did not, represent the interests of the beneficiaries. The prospect for arguments of that kind to arise in the present circumstances is obvious.
Taking all of the different considerations to which I have referred into account, I am satisfied that it is expedient to make the representative orders sought in the Applications.

The orders made on 1 June 2018

On 1 June 2018, in respect of the Application in CIV 2666 of 2016, I made the following orders:
1.Pursuant to Order 21, Rule 5 of the Rules of the Supreme Court 1971 (WA) (WASC Rules), leave be granted to the plaintiff to amend its Writ of Summons so as to identify that The Law Debenture Trust Corporation plc (LDTC) is a party to the proceedings including in its capacity as trustee under the following trust deeds:
(a)the trust deed between Bell Group N.V. (in liquidation) (BGNV), The Bell Group Limited (TBGL) and LDTC dated 20 December 1985, as amended by a supplemental trust deed dated 6 February 1986 between BGNV, TBGL and LDTC;
(b)the trust deed between BGNV, TBGL and LDTC dated 7 May 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC; and
(c)the trust deed between BGNV, TBGL and LDTC dated 14 July 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC;
(collectively, the BGNV Trust Deeds).
(d)the trust deed between TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989; and
(e)the trust deed between BGF, TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between BGF, TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989.
2.LDTC is appointed under Order 18, Rule 13 of the WASC Rules as a representative for all the holders of bonds (other than ICWA) issued under the BGNV Trust Deeds.
3.The plaintiff is to file and serve a further amended Writ of Summons within 14 days.
4.There be liberty to any bondholder of bonds under the BGNV Trust Deeds to apply to vary order 2 by substituting a different party as the representative for all bondholders under the BGNV Trust Deeds.
5.The costs of and incidental to ICWA's chamber summons dated 19 February 2018 be costs in the cause.
6.There be liberty to apply to vary these orders following publication of the Court's reasons for decision.
In COR 146 of 2014, I made the following orders:
1.Pursuant to Order 4A, Rule 5A(1)(b) of the Rules of the Supreme Court 1971 (WA) (WASC Rules), order 1 of the orders made on 1 February 2018, joining Law Debenture Trust Corporation plc (LDTC) to the proceedings be varied by deleting that order and substituting an order in the following terms:
The Law Debenture Trust Corporation plc (LDTC), in its capacity as trustee of the holders of bonds issued under the trusts listed in Annexure A to these orders, be joined as a party to COR 146 of 2014 and be designated as the fifth defendant.
2.LDTC is appointed under Order 18, Rule 13 of the WASC Rules as a representative for all the holders of bonds (other than ICWA) issued under the BGNV Trust Deeds.
3.There be liberty to any bondholder of bonds under the trust deeds described as the BGNV Trust Deeds in Annexure A apply to to vary order 2 by substituting a different party as the representative for all bondholders under the BGNV Trust Deeds.
4.The costs of and incidental to ICWA's interlocutory application dated 19 February 2018 be costs in the cause.
5.There be liberty to apply to vary these orders following delivery of the Court's reasons for decision.
Annexure A
(a)the trust deed between Bell Group N.V. (in liquidation) (BGNV), The Bell Group Limited (TBGL) and LDTC dated 20 December 1985, as amended by a supplemental trust deed dated 6 February 1986 between BGNV, TBGL and LDTC;
(b)the trust deed between BGNV, TBGL and LDTC dated 7 May 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC; and
(c)the trust deed between BGNV, TBGL and LDTC dated 14 July 1987, as amended by a supplemental trust deed dated 5 December 1990 between BGNV, TBGL and LDTC;
(collectively, the BGNV Trust Deeds).
(d)the trust deed between TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989; and
(e)the trust deed between BGF, TBGL, LDTC and Drayton Capital Pty Ltd dated 25 July 1988, as amended by a supplemental deed between BGF, TBGL and LDTC undated but lodged for assessment on 30 December 1988 and stamped on 23 February 1989.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LF
ASSOCIATE TO THE HONOURABLE JUSTICE PRITCHARD
21 JUNE 2018