RE BELL GROUP LTD (IN LIQ); EX PARTE WOODINGS [2020] WASC 259 (6 July 2020)

the Distribution Proceedings[6] and the windings up since 1995; and

(b) to the extent required, an order that the transfer by TBGL to Bell Bros Pty Ltd (in liquidation) (Bell Bros) of group tax losses on 2 July 1991, alternatively 30 June 1991, is valid.

1. 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]
2. 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.
3. 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.
4. 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.

1. 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]
2. 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]
3. 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.
4. From approximately mid‑2014, disputes arose between the major external creditors of TBGL and BGF as to how these funds should be distributed which led to the commencement of numerous proceedings in both this court and the Federal Court of Australia.
5. In December 2019, the parties to these disputes entered into multiple instruments to fully and finally settle the claims and disputes between them. In April 2020, I made orders and directions approving entry into five of these agreements and implementation of the settlement.
6. Under the settlement, it is proposed that distributions be made:

(a) to the creditors of the Australian Bell companies in the winding up of TBGL; and

(b) in respect of the remaining companies, pursuant to schemes of arrangement to be entered into (Schemes), which are to be the subject of separate applications to the court. If passed by the requisite statutory majorities, the Schemes will amalgamate the property and recoveries (as well as liabilities) of all Australian Bell group companies other than TBGL to create a single Scheme fund to be distributed by BGF.

1. Mr Woodings' evidence is that he does not have any unpaid remuneration owing to him in respect of the windings up of the various Australian Bell companies. As a consequence, he attests, and I accept, that he does not have any personal interest in the outcome of this application.[10]

1. At present, a number of the Australian Bell group companies have provable claims against each other, primarily in relation to inter‑company loans. There are 43 proofs of debt that had been lodged by a group company in the liquidation of another group company.[11] These are yet to be adjudicated.[12] The adjudication of these claims affects the proposed settlement and schemes in a number of ways, including:

(a) whether certain companies can vote in favour of the Schemes;

(b) what distributions external creditors of TBGL will receive in the winding up of TBGL; and

(c) the aggregate amount of distributions that the parties to the settlement will receive in the winding up of TBGL and the Schemes.

1. The plaintiff filed lengthy affidavit evidence giving evidence of the process he had adopted in preparing the 43 inter-company proofs of debt. BGF, the group finance company, is the debtor in relation to 19 of the proofs of debt and the creditor in respect of a further nine. The remaining 15 proofs of debt involve companies within the Australian Bell group other than BGF.[13]
2. Apart from one of the proofs of debt, which I address at [22] below, all of the claims underlying the proofs of debt are inter‑company loans.
3. In respect of the proofs of debt for inter-company loans, the plaintiff, together with staff working on his instructions and under his supervision, examined the books and records of each of the relevant companies to:

(a) identify and verify the existence and amount of the loan;

(b) ascertain whether the loans were interest-bearing and, if so, the applicable rate of interest; and

(c) where relevant, calculate the additional interest which would have accrued from the last available date of the balance of the loan recorded in the books and records of the relevant company, to the date of the commencement of the winding up of the relevant debtor.

1. The books and records considered by the plaintiff and his team were set out in detail in his evidence and included the relevant trial balances, audited statutory accounts, general ledgers, schedules of calculations showing interest accruals on inter‑company loans, journal vouchers, income tax returns[14] and a contemporaneous memorandum of the accounting practices of the Australian Bell group.[15] The plaintiff's evidence also addressed the provenance of the books and records and the basis for his view that regard should be had to these documents in calculating the inter-company loans.[16] In forming his opinion, the plaintiff had regard to the findings made by Owen J in The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9)[17] including his Honour's finding that he was satisfied 'that most of the intra-group borrowing and lending in the group was accounted for through BGF. About 95 per cent of BGF's assets and 88 per cent of its liabilities arose from intra-group loans ...'.[18]
2. The plaintiff also gave evidence of the process he adopted in assessing the inter‑company loans, verifying the existence and amount of each loan and calculating the interest.[19] In all but four cases, the inter‑company loan account balances recorded in the trial balances of both the relevant debtor and creditor company as at 30 June 1991 matched. In respect of the four intercompany loans which did not match,[20] the books and records of the relevant companies were examined further. Ultimately, sufficient information was obtained by the plaintiff to enable him to verify the amount of these loans.[21]
3. The plaintiff drew to my attention that the assessment and verification process undertaken by him did not take account of the sale of shares in BRL in 1992 and the orders of Owen J declaring this sale void ab initio.[22] The reason for this was that the sale of the BRL shares had not been accounted for in the books and records of the Australian Bell companies at the time,[23] and it was now not possible to determine what transactions would have been recorded in the relevant accounts.[24] The plaintiff's opinion is that to attempt to give effect to the relief granted by Owen J would potentially affect the amount of the inter-company loans the subject of this application and the settlement reached between the parties.[25] For these reasons, the plaintiff ignored the possible accounting effects of this matter in calculating the inter‑company loans.
4. The other proof of debt that is the subject of the plaintiff's application arises from a guarantee provided by TBGL to BGUK and BGF of a loan obtained from the Lloyd's Syndicate Banks. Under the 2013 Settlement Deed, BGF is entitled to prove in the winding up of BGUK as borrower and in the winding up of TBGL as guarantor for the amount of this debt. The plaintiff gave evidence as to the basis for the calculation of this proof of debt and his opinion that it ought to be admitted.[26]

Costs of Bell Litigation and Distribution Proceedings

1. From about mid‑1995 until July 2014, TBGL and BGF paid, on a 50/50 basis, almost the entirety of the costs of the Bell Proceedings under agreements for indemnification with various indemnifying creditors.[27] In July 1997, back to back indemnity agreements were entered into in respect of the other 21 Australian Bell group companies that were parties to the Bell Proceedings.[28] These agreements specifically acknowledged that the 50/50 allocation of costs was an arbitrary allocation that had been made for convenience because 'it has not been and will never be practical to attribute the legal costs of and incidental to the [Bell Proceedings] to particular [Australian Bell group companies]'.[29]
2. In 1999, the liquidators of TBGL and BGF entered into an indemnity agreement whereby they agreed to indemnify the other in the event that one of the liquidators suffered a shortfall in the advances made to them.[30]
3. Since July 2014, TBGL and BGF have paid on a 50/50 basis the costs of the Distribution Proceedings from the monies recovered from the syndicate of banks in the Bell Proceedings.[31] From November 2015, TBGL's share has been paid by Maranoa Transport by way of pre‑payment of dividends that will be paid to TBGL in the winding up of Maranoa Transport.[32]
4. In addition to the Bell Proceedings and the Distribution Proceedings, the plaintiff has been involved in a number of proceedings concerning matters arising in the windings up or provisional liquidation,[33] as well as proceedings which he has commenced in his capacity as liquidator or provisional liquidator of various of the Australian Bell group companies seeking directions of this court.[34]
5. The total costs that have been incurred are approximately $328 million.[35] The plaintiff gives evidence as to the rendering of invoices by both Ashurst, as solicitors for the Australian Bell group companies and the liquidators, and himself.[36] The invoices were rendered on a monthly basis and did not apportion costs between particular Australian Bell group companies.[37] The plaintiff, together with the indemnifying creditors in respect of the invoices issued for the Bell Proceedings, reviewed and approved these invoices.[38]
6. Since mid-1995, the plaintiff has informed the creditors of TBGL and BGF on two occasions of his intention to revisit the costs allocation.[39] To date, this has not occurred.
7. The plaintiff has obtained advice in respect of the claims that TBGL and BGF may have against each other or other Australian Bell group companies to claim a contribution to the costs.[40]
8. Whether the costs arrangement is maintained or altered affects the amount of distributions that TBGL and external creditors of the Scheme companies will receive under the settlement. On completion of the proposed settlement, any claims by TBGL and BGF in respect of costs will be released and discharged.[41]
9. The plaintiff's confidential affidavits filed in COR 261 of 2019 included modelling of the forecast outcomes and quantum of payments on the basis that the 50/50 cost allocation was maintained, as well as a potential alternative cost allocation.[42] This modelling was provided to the creditors who are parties to the 2019 Settlement Deed.[43]
10. The plaintiff gave evidence as to the work that would be required to allocate costs to each entity within the Australian Bell group, the likely timeframe to undertake this further analysis and modelling, and the impact this would be likely to have on completion of the 2019 Settlement Deed.[44]

1. The books and records of the Australian Bell group companies include the general ledger of BGF. Twenty eight journal entries are recorded as having been posted on 2 July 1991 with an effective date of 30 June 1991. Each of these entries concern group tax relief for the financial year ended 30 June 1990.[45]
2. Specifically, one of the journal entries records that $19,443,600 of tax losses were transferred from TBGL to Bell Bros and that the inter‑company loan balance was reduced by this same amount.[46] The journal entry was prepared by David Winstanley on 26 June 1991, authorised by him on 1 July 1991 and posted by him on 2 July 1991. At that time, Mr Winstanley was the Australian Bell group's financial accountant. Prior to this, the taxable income of Bell Bros for the financial year ending 30 June 1990 was $49,855,385 which was almost entirely attributable to interest earned on its inter-company loan. The income tax payable on this amount would have been $19,443,600.[47] As a consequence, the transfer by TBGL of relevant tax losses to Bell Bros enabled Bell Bros to reduce its taxable income to nil. In consideration for the transfer of the tax loss, TBGL's inter‑company borrowings from BGF were reduced by $19,443,600 and BGF's inter‑company borrowings from Bell Bros were reduced by this same amount.[48]
3. A provisional liquidator was appointed to TBGL on 18 April 1991. While TBGL was not ordered to be wound up until 24 July 1991, under s 466 of the Corporations Law, the winding up is deemed to have commenced on 18 April 1991.[49]
4. The plaintiff's evidence is that the files of the provisional liquidator (Mr Totterdell) have been reviewed and that he has not been able to locate any record that the transfer of group tax losses was authorised by Mr Totterdell.[50]

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 2001 (Cth), the winding up of these companies is governed by the Corporations Law.

1. The plaintiff's application for directions 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. Section 90‑15(1) is in wide terms and allows the court to make such orders as it thinks fit in relation to the external administration of a company.

Application to confirm validity of transfer of group tax losses

1. Section 468(1) of the Corporations Law relevantly provides that any disposition of property of a company, other than an exempt disposition, made after the commencement of the winding up by the court is void unless the Court otherwise orders. Under s 468(2) of the Corporations Law, an exempt disposition for the purpose of this section includes the disposition made by the liquidator of the company.
2. Pursuant to s 465(2) of the Corporations Law, the winding up of a company is deemed to have commenced at the time the application for the winding up was filed.

1. The approach of the court on an application for directions by an external administrator is well‑established. As Goldberg J stated in Re Ansett Australia Ltd (No 3):[51]

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, that 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.

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.[52] Put another way, the order of the court sanctions a proposed course of conduct by the liquidator.[53]
2. In this case, an order or direction is sought in terms that the plaintiff would be acting properly and is justified in accepting certain proofs of debt in respect of companies of which he is also liquidator and in not taking action in relation to the apportionment of costs.
3. As was noted by Vaughan J in Re GGA Lifestyle Pty Ltd (Administrators Appointed); ex parte Woodhouse:[54]

A direction that an external administrator may properly and justifiably carry out a proposed course of conduct is used to signify that it is appropriate that he or she do so. It is a conventional form of direction in common use. It is implicit in such an order that the court is approving the proposed conduct. Often a proposed direction in this form will raise an issue of propriety or reasonableness. Directions are available and appropriate on that basis. (citations omitted)

1. In general, a liquidator of one company must not exercise his or her powers for the benefit or gain of another company of which they are liquidator.[55] A liquidator has a conflict of duties in exercising any power to adjudicate upon and admit a proof of debt in the liquidation of a company which is submitted by another company of which they are also the liquidator. Where this occurs, an issue of propriety or reasonableness will tend to exist.[56]
2. As was noted by Black J in Re Go Energy Group Ltd (in liq),[57] the court has an inherent power to authorise a liquidator to perform an act that would otherwise involve conflict, although that power will only be exercised rarely. In seeking to be excused from their fiduciary responsibility, the liquidator has an 'onerous and exacting' task.[58]
3. Section 90‑15 of Sch 2 of the Corporations Act may be used to provide advice that a liquidator is justified in accepting a proof of debt.[59]
4. In considering an application for directions in the context of the adjudication of proofs of debt where the liquidator is in a situation of conflict, the court may be assisted by an independent expert report,[60] although this is not an essential requirement.[61] Given the quasi‑judicial nature of the function performed by liquidators in adjudicating upon proofs of debt, the court will often be well‑equipped to form a view about whether a proposed adjudication is appropriate without the need for expert assistance.[62]
5. The plaintiff also seeks an order that he would be justified and acting properly in not taking steps to bring, pursue or give effect to claims that might exist between TBGL, BGF and other Australian Bell group companies in relation to the costs that have been paid by TBGL and BGF on a 50/50 basis.
6. In Plan B Trustees Limited v Parker [No 2],[63] Edelman J noted that there were numerous considerations which were relevant to the giving of directions to a trustee concerning whether litigation is or is not justified. He noted that:[64]

The overlapping considerations include the following:

(i) the prospects of success;

(ii) the known means of the other party to satisfy any judgment;

(iii) the potential for the litigation to deplete the trust estate;

(iv) the costs should the application be unsuccessful, and whether those costs are proportionate to the issues and to the significance of the case;

(v) the irrecoverable costs even if the application is successful;

(vi) the nature of the case and issues raised and what will be gained if the action is to succeed; and

(vii) any public interest factors in the case of a charitable trust.

All of these matters are assessed on the basis of the evidence put before the Court in an application for judicial directions. It is common in an application for directions for the facts to be uncontested. But if the direction is founded upon a false factual premise, or relies upon false facts, then the trustee may lose the benefit of the protection afforded by the Court's direction. Further, if the material put before the Court is insufficient for the Court to make a confident answer to the relevant issues then discretion will generally be exercised to refuse to make any directions. (citations omitted)

1. I consider that these considerations apply equally to an application under the Corporations Law or s 90‑15 of Sch 2 of the Corporations Act. Additionally, in an application by a liquidator, an important consideration in determining the application is the attitude of creditors.[65]

1. The purpose of s 468 of the Corporations Law[66] is to prevent property of a company in liquidation being dissipated.[67] This is to ensure that all the property of the company, which the company is free to deal with, is available in the winding up of the company for distribution to creditors. It encompasses property in which the company has a beneficial interest and 'property in which it might or might not have a beneficial interest depending upon the outcome of a realisation of a company's assets'.[68]

Disposition Adjudication of intra-group proofs of debt

1. For the following reasons, I was and am satisfied that the plaintiff would be acting properly and be justified in admitting the 43 proofs of debt identified in schedule B to the originating process[69] in the amount set out in that schedule.
2. First, I was and am satisfied that there is an actual or potential conflict of the duties the plaintiff owed as liquidator of various companies within the Australian Bell group in adjudicating upon these proofs of debt. I am satisfied on the evidence before the court that the plaintiff has no personal interest as to whether or not these proofs of debt are admitted or rejected in the windings up of the various companies. As a consequence, importantly, the potential conflict is one of duty - duty rather than duty - interest.
3. Second, I was and am satisfied that in forming the view that each of the underlying claims can be made and that each of the proofs of debt should be admitted in the windings up, the plaintiff has investigated and evaluated the merits of the claims set out in the proofs of debt. I find that the plaintiff has discharged his obligation to put all relevant information before the court in relation to this issue. In respect of the one proof of debt that was not an intercompany loan, the plaintiff identified the nature of the claim, adduced in evidence copies of the relevant documents and disclosed how the proof of debt had been calculated. I find that the plaintiff's investigation and evaluation of the merits of the various proofs of debt has been both careful and reasonable and that the plaintiff has taken all necessary and proper steps in coming to the view that each of the proofs of debt is a proper claim that can be made against the relevant debtor company and should be admitted.
4. Third, I accept that the major external creditors of the Australian Bell group companies have been given notice of this application and the relief sought,[70] and that none of them have sought to be heard and have not raised any objection. These creditors represent 99.68% of the ordinary unsecured external creditors of TBGL and 99.99% of the ordinary unsecured external creditors of BGF.[71]
5. Fourth, although the application is not supported by an independent expert report, I do not consider that this prevents the directions being made. Having regard to the extremely long time over which the companies have been in liquidation (for some, more than 25 years), the complexity of the liquidations and its history, and the amount of material that has been identified and analysed by the plaintiff, together with the limited timeframe in which the plaintiff has had to bring this application in the context of the 2019 Settlement Deed, I accept that it was not practicable for the plaintiff to obtain an expert report.
6. Fifth, the basis for the plaintiff's judgments in respect of each of the proofs of debt has been fully disclosed. I find that his approach was considered, comprehensive and in accordance with legal principles.

Allocation of costs of Bell Litigation and Distribution Proceedings

1. For the following reasons, I was and am satisfied that the plaintiff would be acting properly and be justified in not taking steps to bring, pursue or give effect to claims that may exist between TBGL, BGF and other Australian Bell group companies in relation to the costs incurred and paid by TBGL and BGF.
2. First, I accept that it is appropriate for the court to make directions given the subject matter of the directions, namely a proposal not to pursue legal claims that may exist, is a matter which calls for the exercise of legal judgment and is one on which directions are often sought and given.
3. Second the plaintiff has sought and obtained legal advice as to the existence and apparent merits of the claim and has had regard to that advice.
4. Third, the plaintiff's evidence sets out the further steps that would be required in order to achieve any cost reallocation including the potential timing for the steps to be completed and the impact this may have on the 2019 Settlement Deed, the completion of the windings up and the interests of creditors.
5. Fourth, the plaintiff has sought and had regard to the wishes of the major external creditors and has served all major external creditors with the application.
6. Fifth, on the evidence before the court, I find that the plaintiff has acted appropriately in considering the issue and forming the view that the pursuit of these claims ultimately are not in the best interests of creditors or the resolution of the windings up.

1. Senior counsel for the plaintiff acknowledged that there is a question as to whether the group tax losses are 'property' of TBGL within the meaning of that term in s 468(1) of the Corporations Law. Under the Income Tax Assessment Act 1936 (Cth), a tax loss arises where a taxpayer's allowable deductions exceeds the sum of its assessable income and net exempt income for the income year. Subject to various conditions, the tax loss can be carried forward or transferred within a corporate group to reduce taxable income. As such, while a tax loss gives rise to a conditional right to reduce a company's taxable income, it is not property that can otherwise be distributed to creditors.
2. However, the matter is not entirely beyond doubt; courts have previously recognised, in certain circumstances, that tax losses may have value.[72] For this reason, senior counsel submitted that it was appropriate for an order to be made under s 468(1) of the Corporations Law.
3. While I have a doubt as to whether a tax loss is 'property' within the meaning of that word in s 468(1) of the Corporations Law, I considered, for the following reasons, that it was appropriate to make an order validating the transfer.
4. First, the transaction by which group tax losses were transferred from TBGL benefited each of TBGL, BGF and Bell Bros. This is because it eliminated part of TBGL's liability to BGF and reduced Bell Bros' taxation liability to nil.
5. Second, the transfer was not prejudicial to the creditors of TBGL; it did not deplete any of TBGL's assets that were otherwise available for distribution amongst its creditors. This is particularly in circumstances where the tax losses were not 'property' that were otherwise available to be distributed to creditors.

1. For the reasons set out above, I considered that it was appropriate to make the orders and directions sought by the plaintiff in the form annexed as Schedule B to these reasons.
2. In relation to the costs of the application, the plaintiff sought 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 this was the appropriate order given the directions sought by them in the substantive application and was a reasonable and appropriate basis on which to apportion costs.
3. I was satisfied that, given the directions made by the court as to the apportionment of costs of the long-running litigation and windings up, this was 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.

IN THE SUPREME COURT OF WESTERN AUSTRALIA

____________________________________________________________

_______________________________________________________________________IT IS ORDERED that:

Directions concerning the adjudication of certain inter-company proofs of debt

in the case of those Companies identified in Schedule A to this originating process that were ordered to be wound up by an order of the court made before 23 June 1993 - namely TBGL, Albany Broadcasters Limited (in liquidation), Bell Bros Holdings Ltd (in liquidation), Bell Group Finance Pty Ltd (in liquidation) (BGF), Bell Publishing Group Pty Ltd (in liquidation), W & J Investments Ltd (in liquidation) and Wigmores Tractors Pty Ltd (in liquidation) - 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 those Companies identified in Schedule A to this originating process that were ordered to be wound up by an order of the Court made after 23 June 1993 - namely, those Companies identified in Schedule A other than the ones referred to in paragraph 4(a) above - s 90-15 of Schedule 2 to the Corporations Act 2001 (Cth) (Insolvency Practice Schedule (Corporations)),

it is directed that the plaintiff, in his capacity as liquidator of the debtor Companies identified in Schedule B, would be acting properly and is justified in admitting (or in amending any applicable prior decision to admit) the proofs of debt identified in Schedule B submitted by creditor Companies identified in Schedule B, in terms of the amounts specified in Schedule B.

Directions concerning costs paid by TBGL and BGF

1. Pursuant to s 479(3) of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth)), it is directed that the plaintiff as liquidator of TBGL and as liquidator of BGF will be acting properly and is justified in not taking steps, and not causing TBGL and BGF to take steps, to bring, make or pursue claims that may be available to each of them against the other, or against any of the other "Australian Bell Companies" (as that term is defined in the affidavit of Antony Leslie John Woodings sworn 3 June 2020 and filed in this application), in respect of the recovery of any costs (including liquidators' remuneration and expenses):

(a) that were incurred and paid for by TBGL and BGF on a 50:50 basis in the period from about April 1995 to June 2014, in connection with the conduct of proceedings CIV 1464 of 2000 (originally constituted as Federal Court of Australia proceeding WAG 3067 of 1995), appeals from that proceeding, and other related proceedings in this and other courts involving the plaintiff or one or more of the Australian Bell Companies; and

(b) that were and are to be incurred in the windings up or provisional liquidation (as the case may be) of the Australian Bell Companies, and which were and are to be paid for by or on behalf of TBGL and BGF on a 50:50 basis in the period from July 2014 until completion of the settlement under the terms of the "2019 Settlement Deed" referred to in order 2 of the orders made by the Honourable Hill J on 15 April 2020 in proceeding COR 261 of 2019.

Order under section 468(1) of the Corporations Law

1. If and to the extent required, pursuant to s 468(1) of the Corporations Law (as applied by s 1408(1) of the Corporations Act 2001 (Cth)), it is ordered that the transfer by TBGL of group tax losses to Bell Bros Pty Ltd (in liquidation) on or about 2 July 1991, alternatively, 30 June 1991, is valid.

1. The costs of the application are costs in the winding up of TBGL (as to 50%) and BGF (as to 50%) to be paid out of the assets of those companies in those proportions.

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

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

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

Albany Broadcasters Limited ACN 008 674 600 (in liquidation) (Albany Broadcasters)

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

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

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

Bell Bros Pty Ltd ACN 008 672 375 (in liquidation) (Bell Bros)

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

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

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

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

Davsell Pty Ltd ACN 002 235 574 (in liquidation) (Davsell)

Dolfinne Pty Ltd ACN 009 134 516 (in liquidation) (Dolfinne)

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

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

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

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

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

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

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

Maradolf Limited ACN 005 482 806 (in liquidation) (Maradolf)

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

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

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

TBGL Enterprises Limited ACN 008 669 216 (in liquidation) (TBGL Enterprises)

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

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

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

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

Wanstead Pty Ltd ACN 008 775 120 (in liquidation) (Wanstead)

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

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

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

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

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

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

(Abbreviations for the Companies as defined in Schedule A are used in the table below.)

Proofs of debt in the winding up of other Companies

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

[1] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [21].

[2] The 37 companies are listed in Schedule A to the orders which are annexed to these reasons.

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

[4] This schedule is Schedule B to the orders which are annexed to these reasons.

[5] Proceedings commenced by the plaintiff, TBGL, BGF, various other companies within the Bell group and other persons against a syndicate of banks. These proceedings are described in more detail in Re Bell Group Ltd (in liq); ex parte Woodings [12] - [15].

[6] These proceedings concern how the recoveries from the Bell Proceedings should be distributed amongst the Australian Bell group and various creditors and comprise 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 proceeding NSD 2098 of 2016); and the Reinstatement Appeal (Federal Court proceeding WAD 40 of 2019). These proceedings are described in more detail in Re Bell Group Ltd (in liq); ex parte Woodings [22] - [43].

[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].

[8] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [8] - [9].

[9] Affidavit of Antony Leslie John Woodings filed 3 June 2020, 'ALJW2'.

[10] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [80].

[11] These proofs of debt are listed in Schedule B of the orders annexed to these reasons.

[12] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [52].

[13] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [52].

[14] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [83] - [86].

[15] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [87] - [88], 'ALJW11', 'ALJW12'.

[16] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [90] - [96].

[17] The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [104], [105], [148], [1909], [1911].

[18] The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [1909].

[19] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [103] - [108].

[20] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [110]; Items 18, 19, 37 and 42 of Schedule B of the orders annexed to these reasons.

[21] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [112] - [115].

[22] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [123] - [125].

[23] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [127].

[24] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [129].

[25] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [128].

[26] Affidavit of Antony Leslie John Woodings filed 3 June 2020 [140] - [143].

[27] Affidavit of Antony Leslie John Woodings filed 19 June 2020, 'ALJW25', 'ALJW26'.

[28] Affidavit of Antony Leslie John Woodings filed 19 June 2020, 'ALJW30' - 'ALJW32'.

[29] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [101], 'ALJW35', 'ALJW36', Recital E.

[30] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [12] - [13], 'ALJW33'.

[31] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [121], 'ALJW40' - 'ALJW43'.

[32] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [122] - [126].

[33] Being WA Supreme Court COR 89 of 2014, COR 162 of 2014, COR 179 of 2014, COR 184 of 2014, CIV 2061 of 1996 and CIV 1464 of 2000; Federal Court of Australia NSD 1030 of 2015 and WAD 572 of 2015; Affidavit of Antony Leslie John Woodings filed 19 June 2020 [74].

[34] Being WA Supreme Court COR 122 of 2014, COR 185 of 2014, COR 38 of 2015, COR 171 of 2015, COR 216 of 2015, COR 224 of 2015, COR 231 of 2016, COR 156 of 2017, COR 218 of 2017, COR 118 of 2018, COR 214 of 2018, COR 233 of 2018 and COR 93 of 2019; Affidavit of Antony Leslie John Woodings filed 19 June 2020 [75].

[35] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [80], [120].

[36] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [77] - [99].

[37] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [84], [87] - [88], [128], [131].

[38] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [85], [89], [129].

[39] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [113], [132], 'ALJW38', 'ALJW39', 'ALJW44', 'ALJW45'.

[40] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [136].

[41] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [139].

[42] Confidential affidavits of Antony Leslie John Woodings filed 24 February 2020 [210(b)], [211], 'ALJW65' and 31 March 2020 'ALJW71' - 'ALJW72' in COR 261 of 2019.

[43] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [145].

[44] Confidential affidavit of Antony Leslie John Woodings filed 19 June 2020.

[45] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [151].

[46] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [152].

[47] Calculated at the then company tax rate of 39%.

[48] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [152].

[49] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [153] - [154].

[50] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [156].

[51] Re Ansett Australia Ltd (No 3) [2002] FCA 90; (2002) 115 FCR 409 [65].

[52] Re GB Nathan & Co Pty Ltd (In Liq) (1991) 24 NSWLR 674, 679 ‑ 680.

[53] Re GB Nathan & Co Pty Ltd (In Liq) (1991) 24 NSWLR 674, 679 - 680.

[54] Re GGA Lifestyle Pty Ltd (Administrators Appointed); ex parte Woodhouse [2019] WASC 167 [23].

[55] Re McGrath [2010] NSWSC 404; (2010) 266 ALR 642, Appendix 1 [29] - [30].

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

[57] Re Go Energy Group Ltd (in liq) [2019] NSWSC 558 [15].

[58] Re Go Energy Group Ltd (in liq) [15] citing with approval Re McGrath [37].

[59] Re Daily Planet Pty Ltd (in liq) [2019] VSC 265; Re Masonry Works Pty Ltd (in liq) [2020] FCA 575 [22].

[60] Re Go Energy Group Ltd (in liq), [15], [22].

[61] Re Sakr Bros Pty Ltd (in liq) [2019] FCA 547; Re Masonry Works Pty Ltd (in liq).

[62] Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332, 338 ‑ 339; Westpac Banking Corporation v Totterdell (1998) 20 WAR 150, 156 ‑ 157.

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

[64] Plan B Trustees Limited v Parker [No 2] [37] - [38].

[65] Re Addstone Pty Ltd [1997] FCA 1043; (1997) 25 ACSR 357, 373.

[66] Which is in the same terms as s 468(1) of the Corporations Act 2001 (Cth).

[67] Re Margart Pty Ltd (in liq) (1984) 79 FLR 330, 336.

[68] Wily v Commonwealth of Australia [1996] FCA 1435; (1996) 66 FCR 206, 210.

[69] This schedule is schedule B of the orders annexed to these reasons.

[70] Affidavit of Antony Leslie John Woodings filed 19 June 2020 [160] - [161], 'ALJW46'.

[71] Re The Bell Group Ltd; ex parte Woodings [77].

[72] Re Avonwood Homes Pty Ltd [2000] VSC 216 [6]. See also Re Albert Street Properties Ltd (1997) 23 ACSR 318; MT Associates Pty Ltd v Aqua-Max Pty Ltd [2000] VSC 78.