Re the Bell Group Ltd (in Liq);
[2014] WASC 298
•21 AUGUST 2014
RE THE BELL GROUP LTD (IN LIQ); EX PARTE GEOFFREY FRANK TOTTERDELL as Liquidator of BELL GROUP LTD (in liq) [2014] WASC 298
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 298 | |
| 21/08/2014 | |||
| Case No: | COR:122/2014 | 18 AUGUST 2014 | |
| Coram: | MASTER SANDERSON | 21/08/14 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Direction refused | ||
| B | |||
| PDF Version |
| Parties: | GEOFFREY FRANK TOTTERDELL as Liquidator of BELL GROUP LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of AMBASSADOR NOMINEES PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of BELCAP ENTERPRISES PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of BELL BROS PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of BELL BROS HOLDINGS LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of DOLFINNE PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of MARADOLF LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of MARANOA TRANSPORT PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of NEOMA INVESTMENTS PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of TBGL ENTERPRISES LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of WAON INVESTMENTS PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of WANSTEAD PTY LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of W & J INVESTMENTS LTD (in liq) GEOFFREY FRANK TOTTERDELL as Liquidator of WIGMORES TRACTORS PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of BELL GROUP LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of AMBASSADOR NOMINEES PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of BELCAP ENTERPRISES PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of BELL BROS PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of BELL BROS HOLDINGS LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of DOLFINNE PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of MARADOLF LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of MARANOA TRANSPORT PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of NEOMA INVESTMENTS PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of TBGL ENTERPRISES LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of WAON INVESTMENTS PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of WANSTEAD PTY LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of W & J INVESTMENTS LTD (in liq) ANTONY LESLIE JOHN WOODINGS as Liquidator of WIGMORES TRACTORS PTY LTD (in liq) |
Catchwords: | Corporations Law Application by liquidator for directions he would be acting 'properly and reasonably' if he retired Whether power to make such direction |
Legislation: | Nil |
Case References: | Condon v Watson [2009] FCA 11 Handberg (in his capacity as liquidator of S & D International Pty Ltd) (in liq) v MIG Property Services Pty Ltd [2010] VSC 336 Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 Re Aplin, Brown & Co Ltd [1902] St R Qd 67 Re Application of Vouris and Godfrey [2004] NSWSC 384 Re Bell Group Ltd (in liq); Ex parte Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in liq) [2013] WASC 409 Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674 Re McGrath [2005] NSWSC 506 Re Porter and Mansfield [2012] NSWSC 220 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
GEOFFREY FRANK TOTTERDELL as Liquidator of BELL GROUP LTD (in liq)
First-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of AMBASSADOR NOMINEES PTY LTD (in liq)
Second-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of BELCAP ENTERPRISES PTY LTD (in liq)
Third-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of BELL BROS PTY LTD (in liq)
Fourth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of BELL BROS HOLDINGS LTD (in liq)
Fifth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of DOLFINNE PTY LTD (in liq)
Sixth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of MARADOLF LTD (in liq)
Seventh-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of MARANOA TRANSPORT PTY LTD (in liq)
Eighth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of NEOMA INVESTMENTS PTY LTD (in liq)
Ninth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of TBGL ENTERPRISES LTD (in liq)
Tenth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of WAON INVESTMENTS PTY LTD (in liq)
Eleventh-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of WANSTEAD PTY LTD (in liq)
Twelfth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of W & J INVESTMENTS LTD (in liq)
Thirteenth-named First Plaintiff
GEOFFREY FRANK TOTTERDELL as Liquidator of WIGMORES TRACTORS PTY LTD (in liq)
Fourteenth-named First Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of BELL GROUP LTD (in liq)
First-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of AMBASSADOR NOMINEES PTY LTD (in liq)
Second-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of BELCAP ENTERPRISES PTY LTD (in liq)
Third-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of BELL BROS PTY LTD (in liq)
Fourth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of BELL BROS HOLDINGS LTD (in liq)
Fifth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of DOLFINNE PTY LTD (in liq)
Sixth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of MARADOLF LTD (in liq)
Seventh-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of MARANOA TRANSPORT PTY LTD (in liq)
Eighth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of NEOMA INVESTMENTS PTY LTD (in liq)
Ninth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of TBGL ENTERPRISES LTD (in liq)
Tenth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of WAON INVESTMENTS PTY LTD (in liq)
Eleventh-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of WANSTEAD PTY LTD (in liq)
Twelfth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of W & J INVESTMENTS LTD (in liq)
Thirteenth-named Second Plaintiff
ANTONY LESLIE JOHN WOODINGS as Liquidator of WIGMORES TRACTORS PTY LTD (in liq)
Fourteenth-named Second Plaintiff
Catchwords:
Corporations Law - Application by liquidator for directions he would be acting 'properly and reasonably' if he retired - Whether power to make such direction
Legislation:
Nil
Result:
Direction refused
Category: B
Representation:
Counsel:
First-named First Plaintiff : Mr J C Vaughan SC
Second-named First Plaintiff : Mr J C Vaughan SC
Third-named First Plaintiff : Mr J C Vaughan SC
Fourth-named First Plaintiff : Mr J C Vaughan SC
Fifth-named First Plaintiff : Mr J C Vaughan SC
Sixth-named First Plaintiff : Mr J C Vaughan SC
Seventh-named First Plaintiff : Mr J C Vaughan SC
Eighth-named First Plaintiff : Mr J C Vaughan SC
Ninth-named First Plaintiff : Mr J C Vaughan SC
Tenth-named First Plaintiff : Mr J C Vaughan SC
Eleventh-named First Plaintiff : Mr J C Vaughan SC
Twelfth-named First Plaintiff : Mr J C Vaughan SC
Thirteenth-named First Plaintiff : Mr J C Vaughan SC
Fourteenth-named First Plaintiff : Mr J C Vaughan SC
First-named Second Plaintiff : Mr J C Vaughan SC
Second-named Second Plaintiff : Mr J C Vaughan SC
Third-named Second Plaintiff : Mr J C Vaughan SC
Fourth-named Second Plaintiff : Mr J C Vaughan SC
Fifth-named Second Plaintiff : Mr J C Vaughan SC
Sixth-named Second Plaintiff : Mr J C Vaughan SC
Seventh-named Second Plaintiff : Mr J C Vaughan SC
Eighth-named Second Plaintiff : Mr J C Vaughan SC
Ninth-named Second Plaintiff : Mr J C Vaughan SC
Tenth-named Second Plaintiff : Mr J C Vaughan SC
Eleventh-named Second Plaintiff : Mr J C Vaughan SC
Twelfth-named Second Plaintiff : Mr J C Vaughan SC
Thirteenth-named Second Plaintiff : Mr J C Vaughan SC
Fourteenth-named Second Plaintiff : Mr J C Vaughan SC
Insurance Commission
of Western Australia : Mr P D Evans
Bell Group NV (in liq) : Mr A D'Arcy
Solicitors:
First-named First Plaintiff : Ashurst Australia
Second-named First Plaintiff : Ashurst Australia
Third-named First Plaintiff : Ashurst Australia
Fourth-named First Plaintiff : Ashurst Australia
Fifth-named First Plaintiff : Ashurst Australia
Sixth-named First Plaintiff : Ashurst Australia
Seventh-named First Plaintiff : Ashurst Australia
Eighth-named First Plaintiff : Ashurst Australia
Ninth-named First Plaintiff : Ashurst Australia
Tenth-named First Plaintiff : Ashurst Australia
Eleventh-named First Plaintiff : Ashurst Australia
Twelfth-named First Plaintiff : Ashurst Australia
Thirteenth-named First Plaintiff : Ashurst Australia
Fourteenth-named First Plaintiff : Ashurst Australia
First-named Second Plaintiff : Ashurst Australia
Second-named Second Plaintiff : Ashurst Australia
Third-named Second Plaintiff : Ashurst Australia
Fourth-named Second Plaintiff : Ashurst Australia
Fifth-named Second Plaintiff : Ashurst Australia
Sixth-named Second Plaintiff : Ashurst Australia
Seventh-named Second Plaintiff : Ashurst Australia
Eighth-named Second Plaintiff : Ashurst Australia
Ninth-named Second Plaintiff : Ashurst Australia
Tenth-named Second Plaintiff : Ashurst Australia
Eleventh-named Second Plaintiff : Ashurst Australia
Twelfth-named Second Plaintiff : Ashurst Australia
Thirteenth-named Second Plaintiff : Ashurst Australia
Fourteenth-named Second Plaintiff : Ashurst Australia
Insurance Commission
of Western Australia : State Solicitor for Western
Australia
Bell Group NV (in liq) : Lipman Karas
Case(s) referred to in judgment(s):
Condon v Watson [2009] FCA 11
Handberg (in his capacity as liquidator of S & D International Pty Ltd) (in liq) v MIG Property Services Pty Ltd [2010] VSC 336
Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409
Re Aplin, Brown & Co Ltd [1902] St R Qd 67
Re Application of Vouris and Godfrey [2004] NSWSC 384
Re Bell Group Ltd (in liq); Ex parte Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in liq) [2013] WASC 409
Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674
Re McGrath [2005] NSWSC 506
Re Porter and Mansfield [2012] NSWSC 220
1 MASTER SANDERSON: By originating process issued 25 June 2014 the plaintiffs applied for the following orders:
1. Pursuant to:
(a) in the case of those of the companies listed in the Schedule to these orders (TBGL Bell Companies) which were wound up by an order of the Court made before 23 June 1993, namely:
(i) The Bell Group Limited (in liquidation) ACN 008 666 993 (TGBL);
(ii) Bell Bros Holdings Ltd (in liquidation) ACN 008 695 056 (BBH);
(iii) W & J Investments Ltd (in liquidation) ACN 000 068 888 (W&J); and
(iv) Wigmores Tractors Pty Ltd (in liquidation) ACN 008 679 221 (Wigmores).
s 479(3) of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth)); and
(b) in the case of the other TBGL Bell Companies, s 479(3) of the Corporations Act 2001 (Cth),
it is directed that the first plaintiff, Geoffrey Frank Totterdell, as official liquidator of each of the TBGL Bell Companies holding office jointly with the second plaintiff, Antony Leslie John Woodings, will be acting properly and reasonably and is justified in resigning as an official liquidator of each of the TBGL Bell Companies.
2. The first plaintiff do, within 48 hours after the date on which an extracted copy of these orders is made available to the plaintiffs' solicitors, file with the Principal Registrar of the Court and lodge with the Australian Securities and Investments Commission:
(a) a memorandum of his resignation as an official liquidator of each TBGL Bell Company; and
(b) an extracted copy of these orders,
and his resignation as official liquidator of each TBGL Bell Company thereupon take effect.
3. Upon his resignations taking effect under paragraph 2 of these orders, the first plaintiff has liberty to apply by interlocutory process in these proceedings for orders that he be released, in accordance with:
(a) in the case of those TBGL Bell Companies wound up by an order of the Court made before 23 June 1993, namely:
(i) TBGL;
(ii) BBH;
(iii) W & J; and
(iv) Wigmores,
ss 480 and 481 of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth)); and
(b) in the case of the other TBGL Bell Companies, ss 480 and 481 of the Corporations Act 2001 (Cth).
4. Pursuant to:
(a) in the case of those TBGL Bell Companies would up by an order of the court made before 23 June 1993, namely:
(i) TBGL;
(ii) BBH;
(iii) W & J; and
(iv) Wigmores,
s 473(7) of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth)); and
(b) in the case of the other TBGL Bell Companies, s 473(7) of the Corporations Act 2001 (Cth),
upon the vacancy in the office of joint official liquidator appointed by the Court arising in respect of each TBGL Bell Company by virtue of the resignation of the first plaintiff in accordance with paragraph 2 of these orders, the second plaintiff, is, by this order, removed as joint official liquidator and is instead appointed as sole official liquidator to each TBGL Bell Company.
5. A copy of these orders be placed on each of the court files with respect to the winding up proceedings of the TBGL Bell Companies as identified in the Schedule to the originating process.
6. Pursuant to:
(a) in the case of those TBGL Bell Companies would up by an order of the Court made before 23 June 1993, namely:
(i) TBGL;
(ii) BBH;
(iii) W & J; and
(iv) Wigmores,
s 479(3) of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth));
(b) in the case of the other TBGL Bell Companies, s 477(2B) and s 479(3) of the Corporations Act 2001 (Cth),
Mr Woodings as sole official liquidator of each TBGL Bell Company has approval (where required under s 477(2B) and s 479(3) of the Corporations Act 2001 (Cth)) to execute, and it is directed that he will be acting properly and reasonably and is justified in executing, and that he shall execute as soon as practicable upon becoming sole liquidator, a deed poll substantially in the terms of attachment 'PAW-46' to the affidavit of Paul Anthony Walker sworn 18 August 2014.
7. There be liberty to apply generally.
8. The plaintiffs' costs of the application are costs in the winding up of the TBGL Bell Companies and may be paid out of the assets of those companies severally in the proportions specified in Schedule A to the originating process.
(original emphasis)
2 At the hearing of the application the Bell Group NV (in liq) (BGNV) were represented and so was the Insurance Commission of Western Australia Inc (ICWA). The orders proposed by the plaintiffs had been the subject of extensive negotiations between the parties. Although counsel for the BGNV had, on the first return date of these orders, indicated they would be opposed, the negotiations led to the liquidator of the BGNV taking a neutral position - that is that neither consented to, nor opposed, the orders. Counsel for the ICWA took the same position. After hearing argument I indicated to the parties I would make orders in terms of pars 4 - 8 of the orders proposed by the plaintiffs. I reserved my decision in relation to order 1, consequently orders 2 and 3. In my view, an order should not be made in terms of the proposed order 1 and these reasons deal with that question and the reasons for making the remaining orders.
3 A brief summary of the relevant facts is required. These facts are drawn from six affidavits filed in support of the application. The first plaintiff filed an affidavit sworn 25 June 2014, and the second plaintiff filed an affidavit sworn the same date. Four affidavits were sworn by Mr Paul Anthony Walker, a solicitor acting for the plaintiffs. The first of these was sworn 29 July 2014, the second was sworn on 11 August 2014 and the third and fourth affidavits were sworn 18 August 2014.
4 The plaintiffs are the court appointed liquidators of various Bell Group companies. Mr Woodings is the sole liquidator, or provisional liquidator, of 10 of the Bell Group companies. Mr Totterdell and Mr Woodings are joint liquidators of the other 14 Bell Group companies. The liquidators and the Bell Group companies, among others, have prosecuted long and complex proceedings against a syndicate of banks. Following trial, intermediate appeal, and in the shadow of an imminent High Court appeal, these proceedings were settled in September 2013. The court approved entry into the settlement on 14 November 2013: Re Bell Group Ltd (in liq); Ex parte Antony Leslie John Woodings as Liquidator of the Bell Group Ltd (in liq) [2013] WASC 409. Completion of the settlement subsequently occurred on 27 June 2014.
5 Mr Totterdell was appointed as liquidator of the Bell Group Ltd (TBGL) on 24 July 1991. He was appointed as liquidator to the other TBGL companies (all of which are listed in the schedule to the originating process) on various dates between July 1991 and 21 December 1995. Mr Woodings was appointed as liquidator of Bell Group Finance (BGF) on 3 March 1993. Later, he was appointed as the sole liquidator of provisional liquidator of a further nine Bell Group companies.
6 In 1999 circumstances arose which caused Mr Totterdell to make application to this court seeking to resign as the liquidator of the Bell Group companies to which he had been appointed as sole liquidator. The application sought the appointment of Mr Woodings in place of Mr Totterdell. In the course of the 1999 resignation application Owen and Templeman JJ, who dealt with the matter on separate occasions, expressed the view that Mr Totterdell's resignation might potentially risk prejudicing parts of the claim advanced by the Bell Group companies in the Bell proceedings. Ultimately, rather than have Mr Totterdell resign and cease to be liquidator of the relevant Bell Group companies and expose the Bell Group companies to additional litigation risk, on 3 March 2000 the court made orders appointing Mr Woodings as additional liquidator to those companies together with Mr Totterdell.
7 At the time, the court ordered that Mr Woodings was to do all things required or authorised by law to be done by a liquidator of each company in respect of the conduct and prosecution of the Bell proceedings to the exclusion of Mr Totterdell. The orders required Mr Totterdell to provide assistance to Mr Woodings and to do all things necessary or convenient to progress the prosecution and settlement of the Bell proceedings as may be reasonably required by Mr Woodings. Accordingly, from 3 March 2000 Mr Woodings has had sole conduct of the prosecution of the Bell proceedings for the Bell Group companies.
8 The winding up of the Bell Group companies was effectively deferred pending the conclusion of the Bell proceedings. Accordingly, Mr Totterdell has performed little substantive work on the liquidations since March 2000. At the end of 2006, Mr Totterdell retired from practice. However, he has remained a party to the Bell proceedings (and certain related proceedings). Despite Mr Totterdell's limited role in the conduct of proceedings, it was necessary for Mr Totterdell as joint liquidator to execute the settlement deed at Mr Woodings' request. This is dealt with in the approval decision to which I have referred above.
9 Following the completion of the settlement of the Bell proceedings, Mr Totterdell wishes to retire as liquidator of the relevant Bell Group companies. Upon Mr Totterdell ceasing to be a liquidator, Mr Woodings has consented to act as sole liquidator of those Bell Group companies. Both Mr Totterdell and Mr Woodings agree that if Mr Totterdell was not to resign and instead had to reassume an active involvement in the windings up of the relevant Bell Group companies, considerable additional costs would be incurred in conducting the windings up. Both are of the view these additional costs would not be in the interests of the relevant Bell Group companies or their creditors and contributories. That is particularly the case where Mr Woodings is capable of attending to all future work required for the conduct of the liquidation without Mr Totterdell's involvement or assistance.
10 It is against that background court approval for Mr Totterdell's resignation is sought. That is pars 1, 2 and 3 of the orders. The remaining orders deal with Mr Woodings' ongoing involvement in the liquidation.
11 Two slightly different statutory regimes apply. This is because four of the relevant Bell Group companies were wound up by orders of the court made before 23 June 1993. Just why that is so was the subject of detailed submissions by counsel for the plaintiff. For present purposes, it is unnecessary to go through these submissions; it is sufficient if I say I am satisfied two different regimes apply.
12 As to both the pre-June 1993 Corporations Law and the now Corporations Act 2001 (Cth) the following may be said:
(1) section 472(1) provides that on a winding up order being made, the court may appoint an official liquidator to be liquidator of the company;
(2) section 473(1) provides that a liquidator appointed by the court may resign;
(3) section 473(7) provides that a vacancy in the office of a liquidator appointed by the court must be filled by the court; and
(4) section 473(8) deals with specification of exclusive or joint powers where more than one liquidator is appointed.
Further, the orders sought rely upon the following statutory provisions:
(1) as to the directions that the liquidators will be acting properly and reasonably and are justified in taking the proposed actions - s 479(3) of the Corporations Act (as to the post-23 June 1993 windings up) and s 479(3) of the Corporations Law (as to the pre-23 June 1993 windings up); and
(2) as to the approval to enter into the deed poll, s 477(2B) of the Corporations Act - so far as the obligations thereby assumed may continue for more than three months (this is relevant to the post-23 June 1993 windings up only).
13 It is convenient to deal first with the proposed order 1 and my reasons for declining to make that order. It has long been the case a liquidator (or indeed any administrator appointed to a company) may apply to the court for directions in relation to any particular matter arising under the winding up. Subject to the liquidator making full and fair disclosure of the material facts, the effect of such an order is to protect the liquidator from claims that he or she has acted unreasonably, inappropriately or in breach of duty. This principle has been explained in any number of cases, perhaps most notably Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674, 679 - 680, and more recently in Handberg (in his capacity as liquidator of S & D International Pty Ltd) (in liq) v MIG Property Services Pty Ltd [2010] VSC 336.
14 But the power to give directions is not unfettered. The most often quoted statement of the limitation on the power is that of Goldberg J in Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 where his Honour said:
There must be something more than the making of a business or commercial decision before a court will give directions in relation to, or approving of, the decision. It may be a legal issue of substance or procedure, it may be an issue of power, propriety or reasonableness, but some issue of this nature is required to be raised [65].
15 In short, there must be 'an issue calling for the exercise of legal judgment'. Directions will be appropriate where the liquidator is not seeking commercial advice from the court. Rather having made what is considered to be an appropriate and reasonable commercial decision, the liquidator is seeking protection in light of the circumstances confronting the liquidator. In Handberg (supra) the decision is described as 'difficult and litigious'.
16 In this case the plaintiffs rely on two matters. First, they say the retirement of Mr Totterdell goes to an issue of propriety or reasonableness. Accordingly, directions are available. Secondly, they say Mr Totterdell remains in the position of liquidator, if not at the direction of the court, then certainly at the urging of the two judges who dealt with his earlier application to resign. In some way that is said to enlarge or enliven the jurisdiction of the court to make the orders sought.
17 It is important to bear in mind two relevant considerations. First, s 473(1) of the Corporations Act allows a liquidator to retire at any time for whatever reason. The section is completely unfettered. There may be occasions when a liquidator feels he or she has to resign - perhaps when an obvious conflict of interest arises. But there may well be other occasions when a liquidator resigns for entirely personal reasons. For instance, if a liquidator retires from practice. But none of that has anything to do with the court and nor should it. Secondly, it is important to note in this instance what Mr Totterdell is seeking is an order relating to his retirement - he is not seeking a release under s 480 of the Corporations Act. A combination of s 480(b) and s 480(c) means that a liquidator who has resigned can apply to the court to be released. If such an order is made, then the former liquidator is protected under the provisions of s 481(3). But it is a necessary precursor to the release that the liquidator has resigned. The court has a role in ordering the release - but it is difficult to see it has a role in the liquidator's decision to retire.
18 This case certainly has about it unusual aspects. The litigation involved huge sums of money and was almost certainly the most complex and long-running action this nation has seen. Mr Totterdell, although not involved in the day to day running of the litigation, was well aware of the parties' capacity to dispute almost anything. Furthermore, in such complex litigation there is always the prospect something has been overlooked, the blame for which could be sheeted home to the liquidators. Mr Totterdell remains a liquidator largely because judges of this court thought it appropriate that he do so. The matters peculiar to this case make it understandable Mr Totterdell would seek the directions found in the proposed order 1.
19 Neither Owen nor Templeman JJ when dealing with Mr Totterdell's resignation application produced reasons for decision. In fact, in the case of the hearing before Templeman J there is a suppression order in relation to the transcript of proceedings. It would appear, however, that these two practical, experienced commercial judges recognised the potential problems occasioned to the litigation if Mr Totterdell retired. They looked for, and found, an acceptable compromise. To his credit, Mr Totterdell acquiesced in the practical solution. But it does not seem to me to follow Mr Totterdell is entitled to an order of the court now he has decided to retire. There is no logical or jurisprudential reason why that should be so.
20 There is a further difficulty with the order proposed. It is not entirely clear what its effect would be. Section 481(3) of the Corporations Act spells out the protection offered to a former liquidator upon an order for release by the court. Implicit in this application is Mr Totterdell's desire for some equivalent form of protection. Doubtless he wishes to enjoy the rest of his retirement without the prospect of there looming in the background some residual liability of which he is presently unaware. But if the statutory effect of a release is the protection offered by s 481(3) it might well be asked what protection is actually afforded by a court direction Mr Totterdell would be acting reasonably if he retired? There is no obvious answer to that question and it seems to me no real utility in making the order.
21 During the course of submissions, I suggested to counsel for the plaintiffs the court may not have the power to make an order as sought because of the provisions of s 473(1) of the Corporations Act. Counsel pointed out, correctly I think, there is power to make directions under s 479(3) and that power is unfettered. However, it must be read subject to s 479(4) and that, I think, is where the limitation referred to by Goldberg J arises. But even assuming there is the power this, in my view, is not a case where it should be exercised.
22 The remaining orders present no real difficulty. Order 4 anticipates upon the retirement of Mr Totterdell, Mr Woodings will be removed as one of the joint liquidators and instead be appointed as sole liquidator. Logically, it might be thought when one of two joint liquidators retires the other liquidator will remain as the sole liquidator. But there is some doubt about the position based on the old Queensland decision of Re Aplin, Brown & Co Ltd [1902] St R Qd 67. That case is to the effect if one joint liquidator retires the remaining liquidator cannot act alone. It was also the view of Barrett J in Re McGrath [2005] NSWSC 506. It has been followed in at least two other New South Wales cases: Re Application of Vouris and Godfrey [2004] NSWSC 384 and Re Porter and Mansfield [2012] NSWSC 220. A contrary view was taken by Lindgren J in Condon v Watson [2009] FCA 11. His Honour was there influenced by the introduction of an amended s 530 in 2007. That amended section does not apply to pre-23 June 1993 windings up. Accordingly, the plaintiffs were of the view the safest course was to remove Mr Woodings as liquidator on Mr Totterdells' resignation and provide for his immediate reappointment as sole liquidator. Both Mr Totterdell and Mr Woodings are of the view there would be no benefit to anyone from appointing a further joint liquidator and accordingly, the orders should be made.
23 The third substantial question is the entry by Mr Woodings into a Deed Poll. This Deed Poll means Mr Woodings will assume various contractual obligations on the part of Mr Totterdell. It is in everyone's interest that this should be done. There have been extensive discussions between the parties as to the provisions contained in the Deed Poll. Both the solicitors for BGNV and the ICWA are now satisfied their position is protected by the terms of the Deed Poll. That being so, the approval sought should be given.
24 The plaintiffs suggested the costs of the application should be borne severally by the relevant Bell Group companies. That is a reasonable and equitable basis on which to divide the costs and I will order accordingly.
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