RE BELL GROUP LTD (IN LIQ); EX PARTE WOODINGS [2020] WASC 121 (15 April 2020)

(b) directions that he would be acting properly and is justified in entering into and performing the five settlement deeds.

1. In support of his application, the plaintiff relies on three affidavits sworn by him: a non-confidential affidavit filed 23 December 2019 and two confidential affidavits filed 24 February 2020 and 1 April 2020. In addition, the plaintiff prepared six aides memoire to assist the court; three non-confidential documents[2] which summarised two of the existing proceedings and the domestic and overseas bond issues and three confidential aides memoire[3] which provided an overview of the settlement for the different classes of creditors, summarised the deeds of settlement, their effect, the parties to each of them and the relevant court approvals sought, and summarised the condition precedent to the settlement concerning Law Debenture Trust Corporation plc.
2. I am satisfied that it is appropriate to proceed in a manner which preserves the confidentiality of both the settlement deeds and the material on which the plaintiff has acted.
3. The plaintiff offered to provide the court with copies of the legal advice that he had received. I did not consider, for the purposes of determining this application, that it was necessary for me to receive and consider these opinions.
4. For the reasons which follow, I consider that it is appropriate to make the orders and directions sought by the plaintiff.

1. The plaintiff is the court appointed liquidator or provisional liquidator of various companies within the Bell group of companies including The Bell Group Limited (in liquidation) (TBGL), the parent company of the Bell group including the Australian Bell group, and Bell Group Finance Pty Ltd (in liquidation) (BGF), which was the in-house finance company of the Bell group.
2. 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.[4]
3. 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.[5]
4. When the plaintiff and Mr Totterdell were appointed as liquidators to the various Australian Bell group companies, they had insufficient funds to investigate in detail or pursue claims that ultimately led to the commencement of proceedings.[6] As a consequence, in 1994 and early 1995, the plaintiff and Mr Totterdell held meetings of creditors to invite creditors to indemnify them for the costs and expenses of investigating and, where appropriate, pursuing the claims.[7] As a result of those meetings, separate agreements were entered into with a number of creditors to indemnify the plaintiff and Mr Totterdell for their costs and expenses.[8] These agreements required the liquidators of TBGL and BGF to file an application under s 564 of the Corporations Law (as it then was) for orders conferring an advantage on the indemnifying creditors when distributing any recoveries in the ultimate winding up of these companies.[9]
5. In December 1995, the plaintiff together with TBGL, BGF, various other companies within the Bell group and other persons, commenced proceedings against a syndicate of banks (Bell Proceedings).[10] The Bell Proceedings ran for a period of almost 20 years, from about 1995 until mid-2014.
6. The proceedings were heard at first instance by Justice Owen for 404 days between 22 July 2003 and 22 September 2006 with judgment being delivered on 28 October 2008.[11] Final orders were made on 30 April 2009 which included orders for monetary relief in favour of some of the plaintiffs and payment by the banks of the costs of TBGL and BGF.
7. The banks appealed the decision and the respondents to the appeal filed cross-appeals in respect of some aspects of the decision at first instance. The appeal was heard between 18 April and 22 June 2011. On 17 August 2012, the Court of Appeal dismissed the banks' appeal and allowed the cross-appeal in part.[12] As a consequence of the decision of the Court of Appeal, the amount payable by the banks to the respondents was increased. The banks were also ordered to pay the costs of the respondents to the appeal.
8. On 14 September 2012, the banks sought special leave from the High Court to appeal the decision, which was granted on 15 March 2013. Prior to the hearing of the appeal in the High Court, the parties reached agreement on a conditional settlement of the Bell Proceedings.[13] Entry into the settlement deed was approved by Justice Allanson on 14 November 2013.[14]
9. In late June 2014, the settlement became unconditional and completion occurred.[15] As a consequence of the settlement, the banks paid to the plaintiff an amount of approximately $1.7 billion, comprising uncontested amounts in partial discharge of the judgment at first instance as varied by the Court of Appeal and settlement amounts which were paid to the plaintiff as trustee of a trust (collectively, Settlement Sum).[16]
10. On 26 November 2015, the government of the State of Western Australia passed the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (Bell Act).[17] The Bell Act was challenged in the High Court by the plaintiff in his capacity as liquidator of Maranoa Transport, and two other creditors.[18] On 16 May 2016, the High Court declared the Bell Act to be invalid in its entirety.[19]
11. On 28 June 2019, the trust was terminated in accordance with the terms of the settlement deed and the amounts held on trust were vested in the beneficiaries of the trust.
12. Since that time, interest has been earned on the Settlement Sum and various payments have been made by the plaintiff, including payments to the Australian Taxation Office in respect of income tax assessments issued by the Commissioner of Taxation. As at 30 November 2019, the balance of the funds held by the Australian Bell group is $1,607,600,558.[20]
13. To date, it has not been possible for the plaintiff to distribute these funds to creditors of the Australian Bell group because of various claims and disputes between the major external creditors of TBGL and BGF as to how the amounts should be paid out.

1. The six major parties to the current disputes are:

(a) Bell Group NV (BGNV), a body incorporated in Curacao and a member of the Bell group.[21] BGNV is the single largest external creditor of BGF and the second largest external creditor of TBGL. BGNV provided funding for the prosecution of the Bell Proceedings between 1995 and March 1999;[22]

(b) Insurance Commission of Western Australia (ICWA), a statutory corporation and agent of the Crown in right of the State of Western Australia.[23] ICWA has no claim in its own name in the liquidation of BGF, which received the significant majority of the Settlement Sum. It is the holder of all the subordinated bonds issued in the domestic market by BGF and TBGL in 1988.[24] ICWA is an ordinary secured creditor of TBGL for a relatively small amount in respect of rental payments.[25] In addition, ICWA is entitled or beneficially entitled to the proceeds of claims of two unsecured creditors of TBGL including a claim in the name of J N Taylor Holdings Ltd (in liquidation) (JNTH).[26] ICWA provided the majority of funding for the Bell Proceedings;[27]

(c) WA Glendinning & Associates Pty Ltd (WAG) is the second largest external creditor of BGF. WAG's claim is based on a 1992 assignment of loan balances previously owed by BGF to other companies within the Australia Bell group;[28]

(d) the Commonwealth of Australia is an ordinary unsecured creditor of TBGL and the third largest external creditor of BGF. Its claims relate to pre-liquidation tax related liabilities.[29] In addition, the Commonwealth has ordinary unsecured claims against a further 10 companies in the Australian Bell group.[30] The Commonwealth also provided funding for the Bell Proceedings;[31]

(e) Law Debenture Trust Corporation plc (LDTC), the trustee of each of the three BGNV overseas bond issues, the TBGL domestic bond issue and the BGF domestic bond issue.[32] LDTC has submitted proofs of debt both as trustee for each of these bond issues and in its own right for its remuneration, costs and expenses in respect of these bond issues.[33] The terms of the trust deeds governing each of the bond issues contain subordination and turnover provisions. These provisions provide that no moneys will be distributed by LDTC to bondholders until other unsecured creditors are paid in full. The provisions require LDTC to prove in the liquidation and hold any monies distributed on trust until all other unsecured creditors are paid in full, at which time any funds then held by LDTC can be distributed to bondholders.[34] LDTC was a party to the funding agreements for the Bell proceedings;[35] and

(f) Bell Group (UK) Holdings Ltd (BGUK), a company registered in the UK and a member of the Bell group.[36] BGUK is in liquidation in the United Kingdom.[37] BGUK claims it is a creditor of BGF, alternatively that it is a creditor of Western Interstate, another significant company within the Bell group of companies.[38] BGF is an ordinary unsecured creditor of BGUK in its own right as well as an assignee of loan amounts originally owed by BGUK to various overseas banks, known as the Lloyds Syndicate Banks.[39] Apart from BGF, the only known potential creditors of BGUK are the UK Crown, as the assignee at law of a debt said to be owed to Bell International Investments Ltd, and the United Kingdom tax authority.[40]

1. There are five sets of proceedings currently on foot concerning how the recoveries from the Bell Proceedings should be distributed: the Distribution Proceedings (COR 146 of 2014 and CIV 2666 of 2016); the Western Interstate proceeding (COR 166 of 2018); JNTH Proceedings (COY 108A of 1991 and COY 108B of 1991); the Tax Appeal (Federal Court proceedings NSD 2098 of 2016); and the Reinstatement Appeal (Federal Court proceedings WAD 40 of 2019).
2. The issues in each of these proceedings and their current status is summarised below.

1. In August 2014, the plaintiff commenced proceedings (COR 146 of 2014) seeking orders pursuant to s 564 of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth)) to confer an advantage in the windings up of TBGL and BGF on the creditors who had funded the Bell Proceedings (Indemnifying Creditors).[41] Shortly after this, ICWA commenced proceedings (CIV 2666 of 2016) seeking relief in respect of a number of disputes between the Indemnifying Creditors, including in relation to certain agreements between them.[42]
2. Each of the plaintiff, BGNV, ICWA, WAG, the Commonwealth, LDTC and BGUK are parties or participants in these proceedings.[43]
3. These proceedings were effectively stayed between May 2015 and May 2016 due to the passage of the Bell Act.
4. As was noted by the Court of Appeal in Bell Group NV (in liquidation) v Insurance Commission of Western Australia,[44] these proceedings are extremely large and complex, and involve parties with a 'litigious disposition' with deep pockets so that legal costs constitute no restraint on the parties.
5. In CIV 2666 of 2016, ICWA seeks 29 different prayers for relief including declarations that it is a creditor of BGF, declarations as to the proper construction of the funding agreements for the Bell proceedings and declarations as to the construction and operation of agreements known as the Western Interstate Assignment Agreement and the Western Interstate Inter-Creditor Agreement.[45]
6. The trial of the Distribution Proceedings is provisionally listed for hearing between March and July 2021. BGNV has filed an application to vacate the provisional listing of the trial which has not yet been heard or determined. In addition, there are still a number of interlocutory applications which are required to be heard and determined including a pleadings dispute and challenges to claims of privilege over discoverable documents.[46]

1. On 16 May 2016, BGNV commenced proceedings in the Federal Court (WAD 191 of 2016). The plaintiff, ICWA and BGUK are also parties or participants in these proceedings.
2. The books and records of the Bell group suggest that Western Interstate issued preference shares to BGUK for which BGUK paid $2 a share together with a premium of $9,998 a share.[47] All matters concerning these events are in issue between the parties, namely whether any money was paid to BGF and, if so, in what amount and by whom.
3. The critical issues in these proceedings are:

(a) whether Western Interstate is a creditor of BGF for a sum of approximately $758,386,538; or

(b) whether BGUK is the creditor for this amount; or

(c) whether there is no relevant creditor who can prove for the claim.

1. If Western Interstate's claim is admitted in the liquidation of BGF, the distribution it receives is likely to become subject to a deadlock between its ordinary shareholders and its preference shareholder.[48]
2. On 20 September 2018, these proceedings were transferred to the Supreme Court of Western Australia and became COR 166 of 2018.
3. On 12 and 13 February 2019, Justice Tottle (the current case manager of all of the proceedings in this court) heard an application by the plaintiff for directions, an application by BGUK for leave to bring and prosecute proposed cross-claims and ICWA's application for leave to be joined as a party, or, alternatively to intervene in these proceedings. Justice Tottle reserved his decision and, at the request of the parties, has not yet delivered his decision.[49]

1. The plaintiff, ICWA and JNTH are parties to these proceedings. These proceedings raise largely identical issues and seek to restrain the plaintiff from making any decision to revoke an earlier decision of Mr Totterdell to admit the JNTH proof of debt.
2. These proceedings were heard by Justice Pritchard between 10 and 14 September 2018 and judgment has been reserved.[50] At the request of the parties, judgment has not yet been delivered.[51]

1. The primary issue in these proceedings concern whether TBGL and three other companies within the Bell group are entitled to recover approximately $265 million in post liquidation tax which has been assessed in relation to amounts these companies received from the settlement of the Bell Proceedings.
2. On 6 December 2016, TBGL and the plaintiff commenced proceedings in the Federal Court appealing the decision of the Commissioner of Taxation to disallow objections made to the notices of assessment that had been issued.[52]
3. The applicants in the Tax Appeal have served their lay evidence and the parties have exchanged expert evidence although a joint expert report has not yet been filed.[53] The applicant has foreshadowed an application for leave to amend the pleadings.[54] The Tax Appeal has not yet been set down for hearing.

1. This appeal is ancillary to the Tax Appeal and concerns whether certain companies within the Australian Bell group which have been reinstated can retrospectively join the TBGL consolidated tax group. If this occurs, this would permit the plaintiffs in the Tax Appeal to access additional tax losses and deductions thereby reducing their taxable income.
2. On 7 December 2018, Justice McKerracher ordered the reinstatement of certain companies within the Australian Bell group and upon the reinstatement, the joinder of those companies to the TBGL consolidated tax group.[55]
3. On 21 January 2019, the Commissioner of Taxation appealed against the decisions. The appeal has not yet been listed for hearing.[56]

1. On 12 and 13 March 2019, following an extended process of formal mediation and informal negotiations over approximately four years, the parties to the above proceedings reached an in-principle and non‑binding agreement concerning the key terms of settlement and compromise of the issues between them. From March 2019 until December 2019, the parties negotiated the detailed terms of multiple instruments giving rise to the settlement.
2. On 20 December 2019, the parties executed the instruments documenting the settlement. Five of these deeds are the subject of this application, namely: the 2019 Settlement Deed, the Schemes Implementation Deed, the Tax Deed of Settlement, the Inter-Creditor Deed and the JNTH Deed of Settlement.
3. Each of the deeds (apart from the Schemes Implementation Deed) includes an express obligation on the parties to keep its terms confidential. In respect of the Schemes Implementation Deed, a condition precedent for the operation of the deed is the plaintiff obtaining court approval for entry into the deed. Until this has been obtained, the principal provisions of that deed are of no force and effect.
4. Each of the deeds (apart from the Tax Deed of Settlement) also includes a condition precedent that the plaintiff obtains both approval for entry into the deed and directions under s 479(3) of the Corporations Law and s 90-15 of sch 2 of the Corporations Act.

Statutory regime Application for approval nunc pro tunc to enter into five settlement deeds

1. Six of the companies seeking relief in this application, namely TBGL, BGF, Bell Bros Holdings Ltd (in liq), Bell Publishing Group Pty Ltd (in liq), Wigmores Tractors Pty Ltd (in liq) and W & J Investments Ltd (in liq), were ordered to be wound up by orders of the court made before 23 June 1993. By reason of s 1408(1) of the Corporations Act, the winding up of these companies is governed by the Corporations Law. As a consequence, pts 5.4 and 5.6 of the Corporations Law as at 22 June 1993 apply to the application by these companies.
2. These companies are seeking approval nunc pro tunc to enter into the five settlement deeds pursuant to s 477(1)(d) and s 477(2)(j) of the Corporations Law (in so far as some of these companies are compromising a debt in an amount greater than $20,000) and s 477(1)(c) of the Corporations Law (in so far as these companies are compromising a claim made against them including by persons claiming to be creditors).
3. In respect of the remaining 35 companies, the current provisions of the Corporations Act applies to their application. These companies are seeking approval nunc pro tunc to enter into the five settlement deeds pursuant to s 477(2A) (in so far as some of these companies are compromising a debt in an amount greater than $100,000)[57] and s 477(2B) (in so far as some of the companies are assuming obligations under the settlement deeds that may continue for more than three months). These provisions also apply to Western Interstate, which is in provisional liquidation, by reason of s 472(5) of the Corporations Act.
4. The statutory provisions under the Corporations Law and Corporations Act are similar, but not identical. For the purpose of this application, similar considerations arise in respect of the orders sought by the plaintiff under the relevant applicable legislative regime.
5. In respect of all 41 companies, orders are sought under s 1322(4)(a) and s 1322(4)(d) to extend the time for making the application to the court for approval to enter into the agreements.

1. The plaintiff also seeks directions that he would be acting properly and is justified in entering into and causing various companies to enter into and perform the five settlement deeds. This application is made pursuant to s 479(3) of the Corporations Law (in relation to the six companies who were ordered to be wound up prior to 23 June 1993) and s 90‑15(1) of sch 2 to the Corporations Act in relation to the remaining companies.

1. Counsel for the plaintiff provided very detailed submissions on the relevant principles that govern the application before me. I have drawn on these helpful submissions in summarising the following principles.
2. The statutory provisions fetter the liquidator's power to act.[58] Once the provisions are enlivened, as they are in this case, the liquidator cannot enter into a compromise without the approval of the court, the committee of inspection or a resolution of creditors.[59]
3. Although s 477(2A) and s 477(2B) deal with different aspects of a liquidator's power, similar considerations apply under each provision.[60] The statutory provisions ensure that there is oversight of the liquidator's actions.[61] In considering an application under s 477(2B), particular focus must be made to ensuring the winding-up proceeds as expeditiously as circumstances allow.[62]
4. In considering whether to grant the approval sought by the liquidator, the usual approach taken by the court is that:[63]

[T]the court pays regard to the commercial judgment of the liquidator. That is not to say that it rubber stamps whatever is put forward by the liquidator but the court is necessarily confined in attempting to second guess the liquidator in the exercise of his powers, and generally will not interfere unless there can be seen to be some lack of good faith, some error in law or principle, or real and substantial grounds for doubting the prudence of the liquidator's conduct. (citations omitted)

1. In controlling the liquidator's exercise of the power to enter into a compromise, the court 'looks to the interests of creditors' and asks whether the compromise is in their interests.[64] Where the major creditors have had an opportunity to consider the proposed compromise and do not oppose it, or (as in this case) support it, this will be a highly influential factor. This is because creditors, if properly informed, are in the best position to judge what is in their own commercial interests.[65]
2. Other considerations that are relevant to the application include:

(a) whether the compromise is for the proper realisation of the company's assets and will assist the winding up;[66]

(b) the delay and uncertainty that is inherent in any alternative options;[67] and

(c) whether the settlement is the result of extensive and detailed negotiations.[68]

1. In dealing with the application, due regard must be paid to the commercial judgment of the liquidator and any legal advice received in relation to the deed of settlement. This is because the approval sought from the court is for permission by the liquidator to exercise his or her independent commercial judgment and not an endorsement of the proposal.[69] That said, there must be a plausible evidentiary basis for the commercial judgment of the liquidator.[70]
2. Approval for entry into any settlement or compromise should normally be obtained prior to entry into the deed or agreement. However, there is no doubt that the court has power to give approval that operates from the date of entry into the agreement.[71]
3. There is some divergence of opinion as to the precise basis as to how retrospective approval ought to be effected.[72] More recently, the approach of the court, where satisfied it is appropriate to give the approval, is to:[73]

(a) extend the time for making the application for approval, if and to the extent it is required, pursuant to the Corporations Act s 1322(4)(d);

(b) grant approval to enter into the compromise nunc pro tunc;

(c) declare that the relevant compromise is not invalid by reason of it having been entered into without prior approval of the court, pursuant to the Corporations Act s 1322(4)(a); and

(d) give an ancillary direction that the liquidator may act on the agreement as though it had been entered into with the prior approval of the court, pursuant to the Corporations Law s 479(3) or the Corporations Act s 90-15 of sch 2.

1. It is not uncommon where a liquidator seeks the court's approval for entry into an agreement for the liquidator to also seek and obtain directions that the liquidator was justified in entering into the agreement.
2. In Re McDermott and Potts, the Victorian Court of Appeal summarised the principles that apply where a liquidator seeks directions as to the compromise of proceedings. While, in that case, the court was considering an application under s 511 of the Corporations Act, which has since been repealed, as was noted by Vaughan J in Re Red Lancer Pty Ltd (in liq); Ex parte Bumbak, the power under s 90-15 (which applies to the application before me by 35 of the companies) is at least as wide as that under s 511.[74]
3. Before considering the principles which govern applications such as the present one, the Victorian Court of Appeal stated:[75]

Courts recognise that they are generally unqualified and ill-equipped to make or approve of business and commercial decisions. Thus, courts are loath to interfere with the commercial judgment of liquidators on matters within their powers, and will not give directions to liquidators on such matters where no issue arises in relation to a legal matter or in relation to the propriety or reasonableness of the decision. This does not inhibit courts from giving directions to liquidators in relation to the compromise of legal proceedings. The compromise of legal proceedings invariably raises legal issues, although it also usually requires the exercise of commercial judgment. As will be seen, liquidators often seek directions concerning the compromise of legal proceedings, and the courts give such directions when persuaded it is appropriate to do so. (footnotes omitted)

1. After reviewing the authorities, the Court of Appeal summarised the following principles:[76]

(1) The nature of the inquiry undertaken by the court when approval is sought under s 477(2B) in relation to a proposed compromise of litigation is different from the nature of the inquiry the court undertakes under s 511 when a liquidator seeks directions in relation to such a compromise.

(2) On a directions application the court must be positively persuaded that the liquidator's decision to enter into the compromise is, in all the circumstances, a proper one. This necessarily involves a broad consideration of all the relevant circumstances. A direction will exonerate the liquidator.

(3) In contrast, the discrete consideration of an application under s 477(2B) involves a more circumscribed inquiry. The court reviews the liquidator's proposal, satisfying itself that there is no error of law or ground for suspecting bad faith or impropriety, and weighing up whether there is any good reason to intervene. An order under s 477(2B) does not constitute an endorsement of the proposed compromise. An approval will not exonerate the liquidator.

(4) Given that the nature of the inquiry undertaken in relation to the directions application is broader than that under s 477(2B), it would usually be convenient to deal with the directions application first, and often that consideration would substantially overtake any discrete consideration of the application under s 477(2B).

(5) The court always pays due regard to the commercial judgment of the liquidator, and, on both applications, the attitudes of creditors are also important.

(6) On both applications, but particularly the application for directions, it would ordinarily be expected that a liquidator would have obtained appropriate legal advice in relation to the proposed compromise, and the nature and content of that advice is a relevant consideration.

(7) While the focus of s 477(2B) is delay, the inquiry under s 477(2B) still requires consideration of the substance of the proposed compromise. If a related application for directions reveals either that the directions should, or should not, be given, discrete consideration of the application under s 477(2B) may be superfluous.

1. The power of the court to give directions to a liquidator is not unfettered. In considering whether it is appropriate to make the directions sought, the court must have regard to the circumstances of the liquidator. As was noted by Pritchard J in Re Great Southern Managers Australia Ltd:[77]

[T]he court will be reluctant to give directions if only commercial considerations are involved, but special circumstances may warrant directions being given. Those special circumstances may include where the liquidator is operating in an acrimonious environment in the liquidation, and the liquidator's proposed decision risks being subjected to criticism by a particular creditor or creditors as being unreasonable or made in bad faith, or where there is a degree of personal risk of litigation attached to the liquidator that could negatively affect the winding up process. It will suffice if such an attack is in prospect. In other words, a s 511 direction may be given to protect the liquidator in circumstances where the compromise could otherwise negatively affect the winding up process. From that perspective, it can be said that the direction would be just and beneficial to advancing the liquidation process as a whole. (footnotes omitted)

1. Subject to the liquidator making full and fair disclosure of the material facts, the effect of a direction is to protect the liquidator from claims that they have acted unreasonably, inappropriately, or in breach of their duties; it does not determine rights and liabilities that arise out of the proposed transaction.[78]
2. In an appropriate case, directions can be given to a liquidator as to the settlement of litigation. In this context, questions of propriety or reasonableness will often arise such as where the settlement is complex and the context highly charged,[79] or it may be perceived that there was a conflict of duties on the part of the liquidator in relation to the settlement.[80]
3. A further factor that will militate in favour of the court exercising its power to give directions is where the settlement deed makes a direction a condition of the principal provisions of the deed coming into effect.[81]
4. In considering whether in its discretion to give a direction that the liquidator is justified in entering into the proposed compromise or settlement, the focus of the court is on whether giving the direction will be advantageous in the winding up of the company. This involves a broad consideration of matters including the nature of the proposed course of action about which direction is sought, the circumstances relevant to the proposed course of action, the reasons for and consequences of the proposed course of action, and, where the cases involve a determination of a legal issue, the principles relevant to the determination of that issue.[82]
5. The same considerations that apply to approvals under s 477(2A) and s 477(2B) of the Corporations Act are also relevant. Where directions are sought in addition to approvals, it is appropriate to consider whether the proposed directions should be made first. This is because the court must be positively persuaded on an application by a liquidator for directions, that the liquidator's decision to enter into the compromise is a proper one. In contrast, the consideration of an application for approvals is a broader enquiry.[83]

1. Much of the evidence that I have considered for the purposes of this application is confidential. For that reason, I am somewhat constrained in the reasons that I can give for the decision that I have made.
2. In considering the application, I have taken into account the evidence in Mr Woodings' non-confidential and confidential affidavits concerning the history of the current and historical disputes (as summarised above), the likely length of time that it may take to resolve the current disputes if the settlement does not go ahead, the process by which settlement was reached, the lengthy negotiations of the terms of the settlement deeds, the terms of each of the settlement deeds, the financial modelling of the effect of the proposed settlement, and the interests and wishes of the major creditors of the various companies.
3. Each of these matters are relevant to the court's consideration of whether directions should be given, whether the plaintiff is acting in good faith in entering into the settlement deeds and whether there is any error or other ground which may call into question the decision of the liquidator. On all of the material before me, I do not consider there is any such error or ground to call into question the liquidator's decision. I am satisfied that the plaintiff is acting properly and is justified in entering into and implementing the five settlement deeds.
4. In reaching this decision, there are six key factors that I have taken into account.
5. First, the settlement has the overwhelming support of the major external creditors of TBGL, BGF and the other Australian Bell group companies. By value, the settlement has the support of 99.68% of the ordinary secured creditors of TBGL and 99.99% of the ordinary secured creditors of BGF. In the unusual circumstances of this application, which concerns how the assets of the Bell group companies should be distributed between the creditors, it is the creditors who are directly affected by the settlement. The fact that the settlement has the overwhelming support of its external creditors is a particularly significant indicator that the plaintiff's conduct is proper and justified.
6. Second, the settlement contained in the five settlement deeds is the culmination of numerous attempts over a lengthy period of time to resolve the present disputes. The negotiation of the settlement deeds took nine months during which each of the plaintiff and the major creditors were independently represented.
7. Third, on the basis of the matters set out by Mr Woodings in his confidential affidavits, I am satisfied that Mr Woodings has properly considered the potential distribution outcomes for all of the creditors of the Australian Bell group under the scenarios of settlement and the multiple no settlement options. In considering these outcomes, the plaintiff has had regard to a distribution model which has been developed and refined over many years, which has also been used, without objection, by the major creditors. I am satisfied that the plaintiff has also considered the position of the external creditors of the Australian Bell group who are not parties to the settlement deed and set out in detail the basis for his conclusion that these creditors are better off under the settlement than the no settlement options.
8. Fourth, I am satisfied that the settlement will provide certainty to creditors, save further legal costs being incurred, assist and expedite the completion of the winding up of the Australian Bell group and enable a distribution to the creditors significantly sooner than would otherwise be the case. This is particularly relevant in a matter where the plaintiff was first appointed as liquidator more than 27 years ago and, without the settlement, would be unlikely to finalise his roles for some time to come.
9. Fifth, where relevant, the plaintiff has sought and obtained legal advice which he has had regard to in forming the view that the structure and main features of the settlement is fair and appropriate.
10. Finally, the plaintiff has explained the commercial rationale for the structure and primary features of the settlement. The evidence of Mr Woodings sets out the considerations he has taken into account in assessing the settlement and the reasons for his decision to enter into the settlement.
11. In my view, it is appropriate to grant approval to enter into the five settlement deeds nunc pro tunc. The grounds on which he entered into these deeds without prospective approval have been explained by Mr Woodings in his first confidential affidavit, and the settlement deeds are conditional on court approval.
12. I am also satisfied that, in the specific circumstances of this matter, it is appropriate to give the directions in the terms sought by the plaintiff. It is unarguable that the plaintiff is operating in perhaps the most unusual and acrimonious of circumstances where litigation concerning the liquidation of the Australian Bell group has already spanned more than 25 years. There is a deep and entrenched history of litigation between the various parties which, but for entry into the settlement deeds, would continue unabated for the foreseeable future.
13. In forming the view that I should give a direction that the plaintiff would be acting properly and justifiably in performing the settlement deeds, I have taken into account the following. First, the matters that I have referred to above negate any finding of unreasonableness or bad faith and demonstrate that the plaintiff has taken a prudent approach in considering whether entry into the settlement deeds is in the best interests of the creditors as a whole, consistent with his duty of exercising due skill, care and diligence as an officer of each of the Australian Bell group companies. Second, the making of directions sought by the plaintiff are a condition precedent of each of the settlement deeds (apart from the Tax Deed). Third, the number and complexity of each of existing proceedings is significant. Fourth, the plaintiff has not identified any person who challenges the proprietary of the settlement.

1. For the reasons set out above, I consider that it is appropriate to make the orders and directions sought by the plaintiff in orders 2 to 9 of the minute of proposed orders dated 1 April 2020.
2. In relation to the costs of the application, the plaintiff seeks an order that the costs of the application be costs in the winding up of TBGL and BGF in equal shares. The plaintiff submitted that having regard to the nature and structure of the proposed settlement, this was a reasonable and appropriate basis on which to apportion costs.
3. I am satisfied that this is a reasonable and equitable basis on which to apportion the costs of the application and that the order sought by the plaintiff should be made.

ACN 008 675 625 Pty Ltd (in liquidation) (formerly Bell Properties Pty Ltd)

ACN 008 773 411 Pty Ltd (in liquidation) (formerly Harlesden Pty Ltd)

ACN 009 658 020 Ltd (in liquidation) (formerly Overells' Ltd)

Albany Broadcasters Limited ACN 008 674 600 (in liquidation)

Ambassador Nominees Pty Ltd ACN 009 105 800 (in liquidation)

Armstrong Ledlie & Stillman Pty Ltd ACN 009 656 044 (in liquidation)

Belcap Enterprises Pty Ltd ACN 009 264 537 (in liquidation)

Belcap Portfolio Pty Ltd ACN 009 265 169 (in liquidation)

Bell Bros Holdings Ltd ACN 008 695 056 (in liquidation)

Bell Equity Management Limited ACN 009 210 208 (in liquidation)

Bell Group Finance Pty Ltd ACN 009 165 182 (in liquidation)

Bell Publishing Group Pty Ltd ACN 008 704 452 (in liquidation)

Dolfinne Securities Pty Ltd ACN 009 218 142 (in liquidation)

Godine Enterprises Pty Ltd ACN 009 237 316 (in liquidation)

Godine Finance Pty Ltd ACN 009 237 325 (in liquidation)

Great Western Transport Pty Ltd ACN 009 669 121 (in liquidation)

Group Color (WA) Pty Ltd ACN 008 687 769 (in liquidation)

HJW Engineering Pty Ltd ACN 008 975 746 (in liquidation)

Harlesden Finance Pty Ltd ACN 009 227 561 (in liquidation)

Industrial Securities Pty Ltd ACN 008 728 792 (in liquidation)

Maranoa Transport Pty Ltd ACN 009 668 393 (in liquidation)

Neoma Investments Pty Ltd ACN 009 234 842 (in liquidation)

Savidge & Killer Pty Ltd ACN 009 680 639 (in liquidation)

TBGL Enterprises Limited ACN 008 669 216 (in liquidation)

TBGL Securities Pty Ltd ACN 008 713 513 (in liquidation)

The Bell Group Ltd ACN 008 666 993 (in liquidation)

W & J Financial Services Pty Ltd ACN 002 407 696 (in liquidation)

W & J Investments Ltd ACN 000 068 888 (in liquidation)

WAON Investments Pty Ltd ACN 008 937 166 (in liquidation)

Wanstead Finance Pty Ltd ACN 009 227 570 (in liquidation)

Wanstead Securities Pty Ltd ACN 009 218 160 (in liquidation)

Western Interstate Pty Ltd ACN 000 224 395 (provisional liquidator appointed)

Western Transport Pty Ltd ACN 009 666 308 (in liquidation)

Wigmores Air Services Pty Ltd ACN 008 742 863 (in liquidation)

Wigmores Finance Pty Ltd ACN 008 679 230 (in liquidation)

Wigmores Tractors Pty Ltd ACN 008 679 221 (in liquidation)

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Re Bell Group Ltd (in liq); ex parte Woodings [2013] WASC 409; (2013) 97 ACSR 117.

[4] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [7].

[5] Affidavit of Antony Leslie John Woodings filed 23 December 2019 'ALJW2'.

[6] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [29].

[7] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [30].

[8] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [32].

[9] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [33].

[10] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [19].

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

[12] Westpac Banking Corporation v The Bell Group Ltd (in liq) [No 3] [2012] WASCA 157; (2012) 44 WAR 1.

[13] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [23].

[14] Re Bell Group Ltd (in liq); Ex parte Woodings (as liquidator of the Bell Group Ltd (in liq).

[15] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [24].

[16] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [25].

[17] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [117].

[18] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [118].

[19] Bell Group NV (in liq) v State of Western Australia [2016] HCA 21; (2016) 260 CLR 500.

[20] Affidavit of Antony Leslie John Woodings filed 23 December 2019, 'ALJW-7'.

[21] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [45].

[22] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [35].

[23] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [56].

[24] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [64].

[25] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [58] - [59].

[26] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [67].

[27] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [73].

[28] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [43].

[29] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [75] - [76].

[30] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [77].

[31] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [78].

[32] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [81].

[33] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [84] - [85].

[34] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [96] ‑ [98].

[35] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [82] - [83].

[36] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [99].

[37] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [99].

[38] No 37 in the Schedule to the Originating Process.

[39] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [101].

[40] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [102] ‑ [104].

[41] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [107].

[42] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [108].

[43] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [110].

[44] Bell Group NV (in liq) v Insurance Commission of Western Australia [2018] WASCA 179 [5].

[45] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [111].

[46] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [129].

[47] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [131], [134].

[48] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [159].

[49] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [157] - [158].

[50] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [170].

[51] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [171].

[52] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [188].

[53] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [196].

[54] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [197].

[55] Bell Group Ltd v ASIC [2018] FCA 884; (2018) 128 ACSR 624; Bell Group Ltd v ASIC (No 2) [2018] FCA 1970.

[56] Affidavit of Antony Leslie John Woodings filed 23 December 2019 [205].

[57] Corporations Regulations 2001 (Cth) reg 5.4.02.

[58] Corporations Act s 477(2A) and s 477(2B); Corporations Law s 477(1)(c) and (d), s 477(2)(j).

[59] Elderslie Finance Corp Ltd v Newpage Pty Ltd (No 6) [2007] FCA 1030; (2007) 160 FCR 423 [26].

[60] Re United Medical Protection Ltd [2003] NSWSC 237; (2001) 46 ACSR 98 [6].

[61] Re HIH Insurance Ltd [2004] NSWSC 5 [15].

[63] Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83, 85 (Giles J); cited with approval in numerous authorities including recently in Re McDermott and Potts [2019] VSCA 23 [72].

[64] Re Spedley Securities Ltd, 85; Re McDermott and Potts [69].

[67] Re Emu Brewery Developments Pty Ltd (in liq) [2009] FCA 1212 [19].

[68] Vickers, Re York Street Mezzanine Pty Ltd (in liq) [2011] FCA 1028; (2011) 196 FCR 479 [34].

[69] Re United Medical Protection Ltd [7].

[70] McLean v Elvapine Aberglasslyn Road Pty Ltd [2008] NSWSC 484 [6], [10].

[71] Re Bell Group Ltd (in liq); ex parte Woodings [34] and the authorities cited therein.

[72] Empire (Aust) Nominees Pty Ltd v Vince [2000] VSC 324; (2000) 35 ACSR 167 [10]; cf ASIC v Forestview Nominees Pty Ltd [2007] FCA 1985; (2007) 164 FCR 237 [40] - [41].

[73] Vickers, Re; York Street Mezzanine Pty Ltd (in liq) [38]; Re Bell Group Ltd (in liq); ex parte Woodings [35].

[74] Re Red Lancer Pty Ltd (in Liq); Ex parte Bumbak [2019] WASC 450 [43].

[77] Re Great Southern Managers Australia Ltd (in liq); Ex Parte Jones, Weaver and Stewart (in their capacity as liquidators of Great Southern Managers Australia Ltd (in liq)) [2014] WASC 312 [61].

[78] Re Great Southern Managers Australia Ltd [57] - [58].

[80] Richstar Enterprises Pty Ltd v Carey (No 20) [2008] FCA 45 [20], [52].

[81] Re One.Tel Networks Holdings Pty Ltd [2001] NSWSC 1065 (2001) 40 ACSR 83 [42]; Re Emu Brewery Developments Pty Ltd (in Liq) [19].

[82] Re McDermott and Potts [85] - [90], [92].

[83] Re McDermott and Potts [85] - [86], [92(4)].