Re Bell Group Ltd (in Liq)

Case [2020] WASC 259


JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   RE BELL GROUP LTD (IN LIQ); EX PARTE WOODINGS [2020] WASC 259

CORAM:   HILL J

HEARD:   30 JUNE 2020

DELIVERED          :   6 JULY 2020

FILE NO/S:   COR 70 of 2020

MATTER:   In the matter of the Bell Group Ltd (in liq) ACN 008 666 993 and certain of its subsidiaries as listed in Schedule A to the Originating Process

EX PARTE

ANTONY JOHN WOODINGS as liquidator of the Bell Group Ltd (in liq)

Plaintiff


Catchwords:

Corporations law - Winding up - Application by liquidator for directions that liquidator is justified and would be acting properly in admitting proofs of debt in liquidation of other group companies - Application by liquidator for directions that liquidator is justified in not pursuing claims for costs against other group companies - Turns on own facts

Corporations law - Winding up - Application for order to validate transfer of tax losses - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 1408, Sch 2 s 90-15
Corporations Law, s 468(1), s 479(3)
Income Tax Assessment Act 1936 (Cth)

Result:

Application granted

Category:    B

Representation:

Counsel:

Plaintiff : Mr J R J Lockhart SC & Mr P A Walker

Solicitors:

Plaintiff : Ashurst Australia

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

MT Associates Pty Ltd v Aqua-Max Pty Ltd [2000] VSC 78

Plan B Trustees Limited v Parker [No 2] [2013] WASC 216

Re Addstone Pty Ltd (1997) 25 ACSR 357

Re Albert Street Properties Ltd (1997) 23 ACSR 318

Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409

Re Avonwood Homes Pty Ltd [2000] VSC 216

Re Bell Group Ltd (in liq); ex parte Woodings [2020] WASC 121

Re Daily Planet Pty Ltd (in liq) [2019] VSC 265

Re GB Nathan & Co Pty Ltd (In Liq) (1991) 24 NSWLR 674

Re GGA Lifestyle Pty Ltd (Administrators Appointed); ex parte Woodhouse [2019] WASC 167

Re Go Energy Group Ltd (in liq) [2019] NSWSC 558

Re Margart Pty Ltd (in liq) (1984) 79 FLR 330

Re Masonry Works Pty Ltd (in liq) [2020] FCA 575

Re McGrath [2010] NSWSC 404; (2010) 266 ALR 642

Re Richstar Enterprises Pty Ltd; ASIC v Carey (No 20) [2008] FCA 45

Re Sakr Bros Pty Ltd (in liq) [2019] FCA 547

Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332

The Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; (2008) 39 WAR 1

Westpac Banking Corporation v Totterdell (1998) 20 WAR 150

Wily v Commonwealth of Australia (1996) 66 FCR 206

HILL J:

Introduction

  1. The plaintiff is the court appointed liquidator or provisional liquidator of 41 companies within the Bell group of companies including The Bell Group Limited (in liquidation) (TBGL), the parent company of the Bell group, and Bell Group Finance Pty Ltd (in liquidation) (BGF), which was the in‑house finance company of the Bell group.[1]  In these reasons, I will refer to the…

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AGLC
Re Bell Group Ltd (in Liq) [2020] WASC 259
Case
[2020] WASC 259
Decision Date

CaseChat Overview and Summary

In the matter of Re Bell Group Ltd (in Liq), the liquidator sought directions from the court regarding the admission of proofs of debt in the liquidation of various group companies, as well as seeking directions to forego pursuing claims for costs against other group companies. The liquidator also sought an order validating the transfer of tax losses. The case was heard by Owen J in the Supreme Court of Western Australia.

The primary legal issues before the court were whether the liquidator was justified and would be acting properly in admitting proofs of debt in liquidation of other group companies, and whether the liquidator should be directed not to pursue claims for costs against other group companies. The liquidator argued that the admissions of debt and waiver of costs claims would facilitate the efficient administration of the liquidation and that it would be in the best interests of the creditors. The court had to determine whether the liquidator's proposed actions were in accordance with the Corporations Act and consistent with the duties owed to the creditors of the companies in liquidation.

Owen J accepted the liquidator's submissions and found that it was appropriate to proceed in a manner that preserved the confidentiality of the information contained in the affidavits and the material on which the liquidator had acted. The court found that the liquidator was justified in admitting proofs of debt in liquidation of other group companies, and that it would be in the best interests of the creditors to waive claims for costs against other group companies. The court also found that the transfer of tax losses was valid and that it would be in the best interests of the creditors to validate the transfer. The court made the orders and directions sought by the liquidator.

The court ordered that the liquidator was justified and would be acting properly in admitting proofs of debt in liquidation of other group companies, and that the liquidator was justified in not pursuing claims for costs against other group companies. The court also ordered that the transfer of tax losses was valid and should be validated. These orders were made in the interest of the creditors of the companies in liquidation.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In support of his application, the plaintiff relies on three affidavits sworn by him in these proceedings, being two non-confidential affidavits filed 3 June 2020 and 19 June 2020 and a confidential affidavit filed 19 June 2020. The plaintiff also relies on two confidential affidavits filed in COR 261 of 2019 on 24 February 2020 and 1 April 2020. In addition, the plaintiff prepared an aide memoire to assist the court in respect of the issue concerning shares in Bell Resources Ltd (BRL), which was the subject of specific findings of Owen J in The Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) and relief granted in those proceedings.[7][7] The Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; (2008) 39 WAR 1 [462] - [470], [645] - [647], [9591] - [9603], [9611] - [9612], [9638], [9652], [9654], [9661], [9663], [9671], [9673]; Affidavit of Antony Leslie John Woodings filed 3 June 2020 [123] - [131]. I was and am satisfied that it was appropriate to proceed in a manner which preserved the confidentiality of the information contained in both the confidential affidavits filed in these proceedings and in the earlier proceedings, and the material on which the plaintiff has acted. The plaintiff offered to provide the court with copies of the legal advice that he received in respect of the second direction sought by him. I did not consider, for the purposes of determining this application, that it was necessary for me to receive and consider these opinions. At the conclusion of the hearing, I made the orders and directions sought by the plaintiff. In making these orders and directions, I stated that I would publish written reasons subsequently. These are those reasons. In publishing my reasons, I have drawn on the helpful submissions of Mr Lockhart SC and Mr Walker who appeared as counsel for the plaintiff in these proceedings. The plaintiff was appointed as liquidator of BGF on 3 March 1993. He was appointed liquidator of eight other companies within the Australian Bell group in 1995 and as provisional liquidator of Western Interstate in January 1996. Originally, Geoffrey Totterdell was the sole liquidator of TBGL and 13 other companies within the Australian Bell group. On 3 March 2000, the plaintiff was appointed as joint liquidator of these companies and on 21 August 2014, following Mr Totterdell's resignation, was appointed by the court as sole liquidator of these companies.[8][8] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [8] - [9]. Prior to being appointed sole liquidator of the TBGL companies, the plaintiff gave an undertaking to this court that he would apply to the court for directions if he considered he was in a position of actual, potential or apparent conflict of interest or duty.[9][9] Affidavit of Antony Leslie John Woodings filed 3 June 2020, 'ALJW2'. Between 1995 and mid‑2014, the plaintiff, TBGL, BGF, various companies within the Australian Bell group and other persons prosecuted proceedings against a syndicate of banks. Ultimately, in mid‑2014, these proceedings settled and amounts of approximately $1.7 billion were paid to various Australian Bell group companies. At present, the funds held by the plaintiff as liquidator of the Australian Bell group is approximately $1.6 billion.