The Bell Group Limited v Australian Securities and Investments Commission

FURTHER APPLICATION 1 In The Bell Group Limited v Australian Securities and Investments Commission [2018] FCA 884 (Bell Group No 1), I published reasons for orders which I considered should be made to reinstate certain Deregistered Companies (see Schedule B). That relief was sought by the various plaintiffs (see Schedule A) and opposed by both the Australian Securities and Investments Commission (ASIC) and the Commissioner of Taxation. 2 Orders accompanying the reasons in Bell Group No 1 required the parties to file and serve a minute of orders to which they contended they were entitled, together with submissions. That course has been pursued by the plaintiffs, but the plaintiffs also seek to vary the reasons and to reopen their case for the purpose of correcting an apparent misapprehension as to one aspect of the plaintiffs' argument as to the relief sought. 3 The reasons in Bell Group No 1 contemplated that ancillary orders to accompany the reinstatement of the Deregistered Companies should be directed to the specific purpose of securing future tax benefits, rather than past benefits; indeed, that they should be limited in that way (the Limitation). The plaintiffs did not expressly seek the qualification to the orders in terms of the Limitation, but certain submissions made in the course of argument were taken to indicate that orders containing the Limitation were sought. 4 No final orders have been made. The plaintiffs seek, by way of interlocutory application, orders that certain paragraphs of the reasons be varied to reflect the fact that the plaintiffs did not seek ancillary relief limited as referred to in those paragraphs. Alternatively, they seek leave to reopen their case on the question of whether any qualification ought to be made in the manner which those paragraphs suggest, that is, by imposing the Limitation. 5 The substantive issues are whether the plaintiffs should have leave to reopen their case to press for orders which do not contain the Limitation and, if leave is granted, whether or not such orders should be made in the terms of the plaintiffs' minute without the Limitation.

THE DETAIL 6 In the initial application discussed in Bell Group No 1, the plaintiffs sought orders that the registration of certain Deregistered Companies be reinstated. They also sought orders consequent upon the reinstatement, including orders in various alternative forms. I concluded in Bell Group No 1 (at [145]) that the ancillary orders in their various alternative forms were within power. In Bell Group No 1, I also said (at [147]): Further, in exercise of discretion as to whether such orders should be made and, if so, which of them, in my view, it is desirable to grant no more than the minimum relief necessary to do justice and to do so solely for the stated purpose in the way described in submissions which, in this instance, is to enable possible membership of the TBGL tax consolidated group and for the specific purpose of future tax benefit, not past benefits. To that end, para 8 of the Minute is the preferable order, but it should be further qualified for clarity that it is directed to enable the relevant companies to contend for that tax consequence. (Emphasis added.) 7 Similar observations were recorded in [69] and [79] of Bell Group No 1, where the following was said: 69 The Commissioner, of course, opposes the ancillary orders being made. As indicated though, any order made should reflect the fact that the benefit sought is only in relation to future tax consequences. The plaintiffs, appropriately in my view, draw attention to the applicant in Pacanowski v Australian Securities Commission (1995) 57 FCR 173 (at 175), in which Moore J recognised that a 'person aggrieved', an expression not to be construed narrowly, should extend to a creditor of the company in view of the fact that he had 'an interest deriving from the future use that might be made of accumulated losses for taxation purposes'. (Emphasis added.) … 79 I would accept this submission. It is one of the reasons the Court is empowered to make ancillary orders, which would prevent, amongst other things, injustice. In that regard, it is important to recognise that the proposed relief relates to future tax consequences, and does not have potential retrospective effect on liabilities, which have already been assessed on the first and eighth to tenth plaintiffs. (Emphasis added.) 8 At [65] of Bell Group No 1, the foundation for those observations was set out: The plaintiffs focus on future income years, saying there is a real prospect of income being derived by the first and eighth to tenth plaintiffs in future income years by way of interest accruing on the proceeds of the Bell Proceedings. Those plaintiffs have already received tax assessments for the income years ended 30 June 2013, 30 June 2015 and 30 June 2016. The benefit of the orders sought would not relate to past tax losses, but rather, the future consequences following the making of the order. 9 In the written materials, the plaintiffs did not seek these limitations in respect of the ancillary orders. The plaintiffs make the point that the submissions noted at [65] of Bell Group No 1 were made by them in support of their application for the reinstatement orders only and, specifically, as to whether or not the first, eighth and tenth plaintiffs were 'persons aggrieved' by the deregistration, rather than in support of the ancillary orders. 10 The Limitation arose largely as a result of the Court's understanding (and quite possibly the Commissioner's) of the effect of oral submissions. Several oral submissions were made on behalf of the plaintiffs to this effect: … So far as the case for reinstatement is based on agreeing about entry into the Tax Consolidated Group, the plaintiffs put their case based only on their future interest and what that means for them in terms of future tax, in particular, no case is advanced that it could bring about a benefit in the tax appeal. … 11 As the plaintiffs have now produced a minute which reflects the relief they sought (albeit in a preferred alternative which I selected), the initial orders accompanying the delivery of reasons and providing for the filing of a minute and orders are effectively vacated. However, the real question is whether the final form of the ancillary orders to be made following the decision in Bell Group No 1 should be free from the Limitation on the basis that the Limitation was not sought by the plaintiffs, nor did they have the opportunity to make submissions on it. This question arises because, despite the references in the transcript to the topic, the Limitation was discussed only in the context of reinstatement rather than in relation to the ancillary orders. 12 It is also fair to say that neither ASIC nor the Commissioner sought the Limitation which I understood the plaintiffs were proposing at the hearing, if not before. However, this was largely because those parties opposed the relief altogether. The Commissioner and ASIC's position now is that the Limitation should remain.

RELEVANT PRINCIPLES 13 There are several authorities dealing with the circumstances in which a court should give leave to reopen to permit rectification of reasons and proposed orders to address the consequences of a misapprehension. 14 In Davis v Insolvency and Trustee Service Australia (No 2) (2011) 190 FCR 437, the Full Court (Keane CJ, Besanko and Perram JJ) collated the authorities relevant to an application such as this in an important passage as follows (at [4]-[6]): 4 It is a well-established principle that "[a] superior court of justice … has full power to rehear or review a case until judgment is drawn up, passed and entered": Texas Company (Australasia) Ltd v Federal Commissioner of Taxation (1940) 63 CLR 382 at 457 per Starke J, cited with approval in DJL v Central Authority (2000) 201 CLR 226 at [34] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. The Federal Court, by reason of s 5(2) of the Federal Court of Australia Act 1976 (Cth), is a superior court of record and, therefore, subject to the necessary factual precondition of the orders having not been entered, has such a power. Additionally, the Court is empowered to vary or set aside a judgment or order before it has been entered under O 35, r 7(1) of the Federal Court Rules 1979 (Cth). 5 The entry of orders in the Federal Court is governed by O 36, r 3(1) which states that orders may be entered by authentication (defined in r 7) either by a Registrar (under r 3(2)) or a judge of the Court (under r 5). In these proceedings, the orders made on 3 December 2010 have not been entered and, therefore, the Court retains the power to review its own decision. It is important to note that entry of the Court's orders onto its computerised system "Casetrack" (which has occurred in this case) does not constitute the entry of orders for the purposes of the Court's rules. So much was recently made clear by the High Court in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at [152]. 6 The principles surrounding the Court's power to review its own judgment before its perfection are clear: "[w]hat must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing." (Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303 per Mason CJ). Because of the importance of the public interest in the finality of litigation, it is a jurisdiction "to be exercised with great caution"(at 302). The onus is on the applicant to demonstrate that he or she has not been heard: Autodesk at 302 citing Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684 per Mason ACJ, Wilson and Brennan JJ. (Emphasis added.) 15 In Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 (at [24]), Kenny J noted that, while broadly speaking there are four recognised classes of cases in which the Court may grant leave to reopen, the classes are not exhaustive. In every case the overriding principle applicable will be whether or not the interests of justice are better served by allowing or rejecting the application for leave to reopen. 16 It should also be emphasised that the jurisdiction is exceptional and should be exercised with great caution with the onus resting on an applicant to demonstrate that he or she or it has not been heard: see Featherby v Federal Commissioner of Taxation [2016] FCA 454 and Wenkart v Pantzer (No 3) [2013] FCAFC 162 (at [17]-[18]). 17 In The Silver Fox Company Pty Ltd as Trustee for the Baker Family Trust (ACN 083 629 225) v Lenard's Pty Ltd (ACN 010 711 145) (No.2) [2004] FCA 1310, Mansfield J said (at [22]-[23]): 22 In my view the interests of justice require that the oversight or misunderstanding be rectified. No formal orders have yet been made. It is plain that the Court should not provide a back door method by which unsuccessful litigants can seek to re-argue their cases by giving an opportunity to re-open them: see e.g. per Mason CJ in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303. There is a public interest in the finality of litigation. However, I do not think this case is an example of an unsuccessful litigant seeking by a backdoor method to re-argue a case. The Bakers have in fact been successful in their claims, and they thought they were making a claim for damages on a certain basis which, in the circumstances I have described above, was not the understanding either of the respondents or ultimately of the Court. In ICI Chemicals and Polymers Ltd v Lubrizol Corp Inc (1999) 45 IPR 617; [1999] FCA 662, Emmett J permitted the respondent to make submissions after the publication of reasons in respect of an issue which they had overlooked addressing. His Honour permitted that course of action because the oversight did not flow from the neglect or default of the respondent, and the issue was identified as soon as practicable after the reasons were delivered, and (in that case) no further evidence was proposed to be adduced. Similarly, Lindgren J gave leave to a respondent to re-open argument on a limited issue as to interest in LED Builders Pty Ltd v Eagle Homes Pty Ltd (1999) 46 IPR 375; [1999] FCA 1114. 23 The application in this matter is a limited one. It is to enable the Court to address an aspect of the claim for damages which, in the circumstances outlined above, was not addressed. As I have indicated, the applicants assumed or understood that that claim for damages was being pursued, and tfhe [sic] respondents assumed that it was not. (Emphasis added.) 18 In Blank v Federal Commissioner of Taxation (No 2) (2014) 98 ATR 379, Edmonds J said (at [9]): In De L v Director-General, New South Wales Department of Community Services [No 2] (1997) 190 CLR 207; 71 ALJR 588; 143 ALR 171 per Toohey, Gaudron, McHugh, Gummow and Kirby JJ said: The power of this Court to reopen its judgments or orders is not in doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded "on a misapprehension as to the facts or the law", where "there is some matter calling for review" or where "the interests of justice so require". It has been said repeatedly that a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required "without fault on his part", ie without the attribution of neglect or default to the party seeking reopening. By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice. In the case of a final court of appeal, such as this Court, that injustice may be irremediable, unless the Court itself, acting promptly, is persuaded to reopen its orders so as to afford relief in the exceptional circumstances of the case. (Emphasis added [in original])

OPPOSITION TO THE ORDERS 19 By both written and oral submissions in opposition to the plaintiffs' interlocutory application, the Commissioner appears to have, in part, reargued his opposition to the granting of any relief, rather than simply arguing against relief without the Limitation imposed. 20 The Commissioner argues that, consistent with Bell Group No 1, the order for ancillary relief should ensure the tax losses that become available on reinstatement are only available in respect of future income tax years. Any retrospective order, he says, would give rise to: (a) the potential for The Bell Group Limited (in liquidation) (TBGL), in its capacity as appellant in the Tax Appeal (NSD2098/2016) against the Commissioner's assessment of 5 December 2016, to derive a benefit in that proceeding from the availability of prior year tax losses derived from historical GIC; and (b) risks to the revenue arising from the substitution of a likely uncollectable debt comprised of historical GIC for an income tax debt which, if determined to have been correctly assessed in the Tax Appeal, will be recoverable by the Commissioner. 21 The Commissioner says the Limitation imposed under Bell Group No 1 aids in preventing these problems from occurring. He suggests the same reasons why ancillary orders should not have been made at all apply equally to why there should be no revisiting of the reasons in relation to the Limitation. 22 The Commissioner relies on three main factors: (a) the plaintiffs' failure to pursue available avenues of appeal from the Commissioner's private ruling; (b) the pendency of the tax appeal and potential prejudice to the Commissioner's conduct of that proceeding; and (c) the potential implications that would arise from retrospective ancillary orders for the purposes of Pt IVA of the Income Tax Assessment Act 1936 (Cth) (ITAA 36). 23 The Commissioner says no explanation has been provided for not exercising the Pt IVC rights, other than putting forward the self-evident proposition that the consequences of the ancillary orders would not be among the matters arising for consideration in such an appeal. 24 The Commissioner points out in support of his argument on both issues, that Pt IVC of the Taxation Administration Act 1953 (Cth) (TAA) operates as a comprehensive regime for the resolution of disputes to which it applies. The objection, review and appeal procedures provided for in Pt IVC encompass any basis of challenge to the correctness of an assessment (other than a limited basis of challenge to their validity on the grounds that the assessment is merely tentative, provisional or involves conscious maladministration of the assessment process). 25 As to the second matter, the Commissioner relies upon oral submissions made on behalf of the plaintiffs (cited above) to the effect that they do not seek to advance a case which would secure a benefit for them in the Tax Appeal. The plaintiffs, through senior counsel, said: … the reason for that is patently obvious. Whether it will or will not bring about a benefit in the [T]ax [A]ppeal is a matter for the [T]ax [A]ppeal. It would be up to the judge managing the [T]ax [A]ppeal whether the plaintiff in that case, TBGL, was able to advance the argument. TBGL would need to get leave to amend its objection and its grounds. And second, whether it's good or bad is not something that can be litigated here. So we simply put it in terms of the real prospect of benefit as to future tax matters. 26 There are obvious benefits for the Tax Appeal from the plaintiffs' perspective in the ancillary orders being made without the Limitation, the Commissioner says. The consequences would be significant and for that reason the Commissioner submits the relief sought by the plaintiffs should be refused for discretionary reasons. 27 As to the third consideration in relation to public policy and Pt IVA of the ITAA 36, the Commissioner argues that if the Deregistered Companies are incorporated into the TBGL tax consolidated group following the reinstatement they will lack capacity to make payment of historical GIC. The Commissioner argues that the consequence for an order for reinstatement and ancillary orders without the Limitation is that TGBL's income tax liability incurred post-liquidation (which is an amount having priority of payment to the Commissioner under the Corporations Act 2001 (Cth)) will be reduced. At the same time, there would be a significant increase in TGBL's liability for GIC. The consequence of that, the Commissioner says, is that a recoverable income tax debt (one which has already been paid subject to a reservation of the right to object to the relevant assessment) will have been substituted by a debt comprised of GIC that is, effectively, irrecoverable. 28 The Commissioner says that TBGL's proposal for reinstatement in order to utilise prior year tax losses and procure a tax deduction constitutes a scheme to which, in a preliminary view of the General Anti-Avoidance Rules Panel (GAAR Panel), Pt IVA of the ITAA 36 might apply. This was argued by the Commissioner in the course of the original application. I did not accept the argument principally on the basis that I could not form a view in relation to that issue on the information and evidence before the Court. The Commissioner says ancillary orders of the type sought is a crucial step in any relevant scheme to which Pt IVA might apply. The potential for the ancillary orders to aid such a scheme is a further reason why, he says, the discretion to make the orders should not be exercised. 29 On the hearing of this interlocutory application, senior counsel for the Commissioner said: … Whether or not your Honour has proceeded from an understandable misapprehension of the plaintiff's application - and we say it certainly wasn't clear at the end of the hearing what the position was, or at the end of the plaintiff's submissions - the conclusion that your Honour has reached about the proper limits on the orders that should be made is, with respect, the correct conclusion and should be maintained. The discretionary considerations that we point to … compels that conclusion, in our submission.

CONSIDERATION 30 It is now clear the plaintiffs sought to quarantine from their arguments in support of reinstatement the tax implications for previous years' income tax assessments, despite these implications being central to the ancillary orders simultaneously sought in the same application. While this seems a little unusual or confusing that observation goes only to the source of the confusion, rather than the substantive question. 31 It is unnecessary to consider further the question of whether or not the plaintiffs sought the Limitation. I accept that they did not seek the Limitation either in their original written submissions or in the relief sought by their application. To the extent it was a misapprehension, it arose from the transcript exchanges reflected above, together with the content of an aide memoire and an amended minute of relief produced on the day of the hearing. 32 Despite it being relief to be exercised with great caution, I am satisfied these are appropriate circumstances for the plaintiffs to have leave to reopen their case so that it can be determined on the basis the plaintiffs advanced. It is quite clear that any misapprehension was not 'solely' caused by the plaintiffs. 33 The next question then is whether the reasoning in Bell Group No 1 should be amended to reflect the relief the plaintiffs seek in terms of the plaintiffs' minute, specifically, the question is whether the Limitation should be removed. 34 If I am satisfied it is just and appropriate to do so, the relief should be fashioned to put the plaintiffs in a position in which they can, at least, contend in the Tax Appeal that certain Deregistered Companies and other affected Bell Group companies joined the TBGL tax consolidated group with effect from 1 July 2002 so as to enable certain companies in the Bell Group to substantially reduce or completely eliminate tax liabilities for which they had been assessed for previous years (particularly the year ended 30 June 2014) by enabling them to access other tax losses within the Bell Group which would have been accessible for that income year but for the deregistration. Whether or not that contention ultimately succeeds is a matter for the judge determining the Tax Appeal. It is not part of this judgment. 35 Specifically, the ancillary orders were directed to the ownership of shares in Neoma Investments Pty Ltd (in liquidation) ACN 009 234 842, Harlesden Pty. Ltd. ACN 008 773 411, Wanstead Pty Ltd (in liquidation) ACN 008 775 120, Dolfinne Securities Pty Ltd (in liquidation) ACN 009 218 142, Bell Bros Holdings Pty Ltd (in liquidation) ACN 008 695 056 and WAON Investments Pty Ltd (in liquidation) ACN 008 937 166 during the period of their respective holding companies deregistration to enable the Deregistered Companies and other affected Bell Group companies to join the TBGL tax consolidated group with retrospective effect from 1 July 2002. 36 It is clear from the Commissioner's private ruling that he accepts that, where the relevant holding company is reinstated, the companies identified in the previous paragraph would join the TBGL tax consolidated group from the date of reinstatement when their shares that have been held by ASIC would re-vest in the relevant holding company. That would then enable those companies and the first and eight to tenth plaintiffs to gain 'future tax benefits' as a result of the joinder to the TBGL tax consolidated group from the date of reinstatement without further order of the Court. 37 Importantly, in light of the Commissioner's private ruling on this topic, no ancillary orders would be required in order for future tax benefits to be accessed. The ancillary orders were not needed for that purpose and not sought for that purpose. The problem with the Limitation is that the order would have no retrospective effect and would do no more than confirm the position set out in the Commissioner's private ruling. It would not achieve the purpose of the ancillary orders (discussed above), which requires a retrospective vesting of the relevant shares unconstrained by any qualification as to future tax benefits. 38 Opposition is advanced by the Commissioner on public policy grounds, but my impression and understanding from argument before me at the initial hearing accords with that of the plaintiffs, namely, that those grounds were abandoned. I refer to the following exchange: HIS HONOUR: …, one other question before you finish. In the matters that you raised concerning discretion, I didn't understand you to touch on some of the matters which were in your original submissions. [SNR COUNSEL FOR THE COMMISSIONER]: I didn't, your Honour. HIS HONOUR: In your written submissions. [SNR COUNSEL FOR THE COMMISSIONER]: I didn't, and I don't press those matters. HIS HONOUR: Thank you. [SNR COUNSEL FOR THE COMMISSIONER]: I put it on the particular basis on which I've put it orally. 39 Matters no longer pressed include those matters the Commissioner now presses in support of his contention that the ancillary orders ought not to be made without the Limitation, namely, the failure to object to the Commissioner's private ruling under Pt IVC of the TAA regime, the impact the orders would have on the Tax Appeal and considerations of public policy and Pt IVA of the ITAA 36. The plaintiffs complain that the Commissioner, having made the decision to abandon the arguments, is not now entitled to re-agitate them in his opposition to the relief being granted without applying for leave to withdraw the concession. The plaintiffs say that in any such application for leave a full explanation would need to be provided as to why the arguments should be reinstated, particularly as their abandonment appeared to reflect a deliberate forensic choice as opposed to abandonment by accident, mishap or oversight: see Keller v LED Technologies Pty Ltd (No 2) [2010] FCAFC 160 per Emmett and Jessup JJ (at [61] with whom Besanko J agreed (at [84])). 40 As the plaintiffs contend, an application to reopen is not to be used for the re-agitation of arguments already put and dealt with (Wenkart (at [22]) and Blank (at [12])). However, I would be inclined to grant the Commissioner leave to advance the arguments now advanced in opposition to the relief sought. While I have accepted that the plaintiffs were certainly not solely the cause for any misapprehension on this point, I think there is little doubt that there was some confusion on this topic, both on the part of the Commissioner and the Court. While the Commissioner did not expressly seek leave to reagitate these issues on the basis they were abandoned due to a misapprehension as to the Limitation, it is better that the Commissioner have the opportunity to advance the arguments against the relief the plaintiffs seek, now that the picture has emerged with greater clarity. 41 Nonetheless, I do not consider the Commissioner's arguments should be accepted. 42 In relation to the complaint of failure by the plaintiffs to appeal the Commissioner's private ruling, the short answer is that the comprehensive relief sought by the plaintiffs could only be granted by pursuing an application through the Court. In my view, that alone is sufficient to explain why pursuit of an appeal of the Commissioner's private ruling under Pt IVC of the TAA would not have been an adequate vehicle to address all relevant matters. 43 In relation to the Tax Appeal and the contention that the Commissioner would be disadvantaged in that appeal if relief in the terms now sought by the plaintiffs were granted, I am not persuaded that this has been made out. Nor was I so persuaded in Bell Group No 1. In those reasons, I observed in relation to the discretionary considerations relevant to the making of the ancillary orders that (at [146]): [I]f the Commissioner wishes to oppose the tax consequences of the ancillary orders, there remains ample opportunity in other administrative or judicial proceedings to do so. These orders simply allow the plaintiffs to contend for such consequences. The outcome of that debate awaits another day. 44 This has to be a common acceptance, as emphasised orally and in writing, that the Commissioner will have the opportunity to resist the ancillary orders having an impact on the Tax Appeal in the context of the Tax Appeal. Nothing in these reasons purports to, or is intended to, have any bearing or to impose any limitation on any party in the Tax Appeal as to the arguments that may be advanced in relation to the effect of the ancillary orders or any other matter. Neither could the relief sought in this proceeding (taken alone) properly have such an effect. 45 As to the public policy considerations, I refer to Bell Group No 1 (at [87]), where I said the following: The Commissioner also contends, in written submissions, that there are 'strong public policy reasons' for refusing reinstatement. It is not entirely clear whether the Commissioner maintains this argument because, in the context of consideration of the discretion involved in granting the ancillary relief, the Commissioner abandoned reliance on the following factors. Assuming out of caution that the argument is still advanced in relation to whether reinstatement is 'just', the argument is to the effect, that the reinstatement of the companies may have the result that Pt IVA of the Income Tax Assessment Act 1936 (Cth) (1936 Act), containing income tax general anti-avoidance provisions, applies to permit the Commissioner to cancel any tax benefits which may follow from the reinstatement of the Deregistered Companies. I am not persuaded that this factor is presently relevant to the justice of reinstatement. This is because the Court is unable to form any view as to whether what is proposed is a relevant 'scheme' for the purposes of Pt IVA of the 1936 Act. In this context, the Commissioner refers to comments made by the General Anti-Avoidance Rules Panel (GAAR Panel) at a preliminary hearing to the effect that the scheme may be one to which Pt IVA could apply. But, it is clear that some of the assumptions on which the GAAR Panel was relying were debatable and, in any event, the views expressed were no more than a simple expression of a possibility. There is a whole regime under Pt IVC of the Taxation Administration Act 1953 (Cth) (TAA), with objection and appeal procedures, which might deal with the mere possibility that noting upon the ancillary orders (not the orders for reinstatement themselves) may, or may not, constitute a scheme. It is quite inappropriate to attempt to further examine the issue at this point, when no arguments have been put on by either side. 46 The same line of reasoning follows in connection with the argument raised by the Commissioner against the interlocutory relief now sought by the plaintiffs. 47 The aspect of this argument that the Commissioner seeks to advance is that the ancillary orders without the Limitation would result in the substitution of a likely uncollectable debt for GIC for an otherwise recoverable debt for income tax, being the tax assessed for the 2014 income year. While this topic was touched upon by the Commissioner in argument on the original application, it was referred to only in the context of whether the Court should make the orders for reinstatement of the Deregistered Companies, not as a basis for refusing to make the ancillary orders with or without the Limitation. However, the principal difficulty with the argument is that I am far from satisfied that the evidence before the Court permits this conclusion to be reached. Moreover, I accept the plaintiffs' submission that this complaint does not represent a principled basis for refusing to make the ancillary orders in the terms sought for the following reasons: (1) Deregistration is always subject to a possibility of a retrospective reinstatement: Bell Group No 1 (at [78]-[79]). (2) Deregistration is always subject to the possibility of reinstatement with a retrospective order under s 601AH(3)(d) to achieve an 'as-you-were' position, which I emphasised as a driving consideration in Bell Group No 1. (3) If the utilisation of the tax losses relating to GIC is not relevant prejudice to the Commissioner in relation to tax liabilities arising after reinstatement it is difficult to see why the utilisation of those losses in relation to tax liabilities arising during the period of deregistration should be, particularly as this result is entirely consistent with: (a) the purpose of the power under s 601AH(3)(d) which is to achieve an 'as-you-were' position in relation to the period of deregistration: Bell Group No 1 (at [113], [136], [146(c)]); and (b) the regime under which tax consolidation occurs, which contemplates that the choice to form a tax consolidated group may be retrospective to a time before the choice to consolidate is made. 48 The Commissioner is, in substance, simply pointing out that while the plaintiffs could derive a benefit, the Commissioner could suffer a detriment. This may be so, but this is implicit in any event in the decision to reinstate. That decision has been fully explained and orders for reinstatement are to be made.

TERMS OF THE ORDERS 49 The plaintiffs rely on a minute, [1] and [2] of which is in these terms: 1. Pursuant to the Court's jurisdiction as a superior court of record, alternatively rule 39.04 of the Federal Court Rules 2011 (Cth), paragraphs 65, 66, 69, 79 and 147 of the Reasons for Judgment delivered 15 June 2018 (Reasons) be varied to reflect the fact that the plaintiffs did not seek, and do not seek, any of the ancillary orders the subject of paragraphs 6, 7 and 8 of the Plaintiffs' Minute of Proposed Orders (as handed up on 7 February 2018) "for the specific purpose of future tax benefit, not past benefits" or anything to like effect. 2. The plaintiffs have leave to re-open their case as to whether any qualification ought to be made to paragraph 8 of the Plaintiffs' Minute of Proposed Orders (as handed up on 7 February 2018) to address the matters referred to in paragraph 147 of the Reasons and, if so, the extent and form of any such qualification. 50 For the preceding reasons I consider the orders substantially in that form should be made to reflect my views on the appropriateness of the relief in terms actually sought. It is clear that the orders made in Bell Group No 1 were simply procedural directions. It was contemplated that it would be necessary to look to further reasons (these reasons) for the actual orders ultimately made in this proceeding and any reasons for such orders. That was why I ordered the filing of further submissions in Bell Group No 1. It appears to me that orders 1 and 2 will adequately address the issue of removing the Limitation in the specified paragraphs of the reasons.

COSTS 51 There is also an argument in relation to costs. The Commissioner's position was and remains that if the plaintiffs' application was not dismissed, no order for costs should be made. He contends that even if the contest between the Commissioner and the plaintiffs relating to ancillary orders was characterised as adversarial, that contest was focussed in large part upon the state of the evidence available to demonstrate the plaintiffs' status as 'persons aggrieved'. As senior counsel for the Commissioner observed, that evidence was supplemented shortly prior to the first hearing. The Commissioner submits that it only became apparent on the filing of that evidence and the production of the aide memoire at the hearing by senior counsel for the plaintiffs that he would not be required to address the Court on the evidence of the first and eighth to tenth plaintiffs' ability to access current-year additional deductions and tax losses upon their reinstatement with which to offset future assessable income. 52 The costs of the orders seeking reinstatement should be borne by the first to tenth plaintiffs. However, in my view, costs in relation to the ancillary orders are different. There was a strenuous adversarial contest on this topic on which the plaintiffs succeeded. The plaintiffs contend that the order that the Commissioner pay 50% of the plaintiffs' costs of the application would be a reasonable apportionment of time devoted to the respective topics in written and oral submissions. I accept that submission.

CONCLUSION 53 For those reasons, I consider that the plaintiffs are entitled to relief substantially in the terms of their minute. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate: Dated: 7 December 2018 SCHEDULE A - LIST OF PLAINTIFFS First Plaintiff: THE BELL GROUP LIMITED (IN LIQUIDATION) ACN 008 666 993 Second Plaintiff: BELL BROS HOLDINGS LTD (IN LIQUIDATION) ACN 008 695 056 Third Plaintiff: BELL BROS PTY LTD (IN LIQUIDATION) ACN 008 672 375 Fourth Plaintiff: BELCAP ENTERPRISES PTY LTD (IN LIQUIDATION) ACN 009 264 537 Fifth Plaintiff: BELL GROUP FINANCE PTY LTD (IN LIQUIDATION) ACN 009 165 182 Sixth Plaintiff: WANSTEAD PTY LTD (IN LIQUIDATION) ACN 008 775 120 Seventh Plaintiff: WIGMORES TRACTORS PTY LTD (IN LIQUIDATION) ACN 008 679 221 Eighth Plaintiff: DOLFINNE SECURITIES PTY LTD (IN LIQUIDATION) ACN 009 218 142 Ninth Plaintiff: NEOMA INVESTMENTS PTY LTD (IN LIQUIDATION) ACN 009 234 842 Tenth Plaintiff: WANSTEAD SECURITIES PTY LTD (IN LIQUIDATION) ACN 009 218 160 Eleventh Plaintiff: ANTONY LESLIE JOHN WOODINGS

SCHEDULE B LIST OF DEREGISTERED COMPANIES WHOSE REINSTATEMENT IS SOUGHT Company ACN Date of dissolution/deregistration Armstrong Ledlie & 009 656 044 20 October 1992 Stillman Pty. Ltd. Belcap Portfolio Pty Ltd 009 265 169 20 October 1992 Bell Properties Pty Ltd 008 675 625 24 June 1993 Davsell Pty Ltd 002 235 574 24 June 1993 Godine Enterprises Pty Ltd 009 237 316 20 October 1992 Godine Finance Pty Ltd 009 237 325 20 October 1992 Group Color (W.A.) Pty. Limited 008 687 769 20 October 1992 Harlesden Pty. Ltd. 008 773 411 12 January 1994 HJW Engineering Pty. Ltd. 008 975 746 20 October 1992 Overells' Limited 009 658 020 20 October 1992 Savidge & Killer Pty. Ltd. 009 680 639 20 October 1992 TBGL Securities Pty Ltd 008 713 513 20 October 1992 Wanstead Finance Pty Ltd 009 227 570 20 October 1992 W & J Financial Services Pty. Limited 002 407 696 20 October 1992 Wigmores Air Services Pty. Ltd. 008 742 863 20 October 1992 Wigmores Finance Pty. Ltd. 008 679 230 20 October 1992

SCHEDULE C PAYMENT OF THE LEGAL COSTS OF THE PLAINTIFFS AND ASIC (IF ANY) IN THE WINDINGS UP OF THE COMPANIES UPON THEIR REINSTATEMENT Company ACN Proportion of costs of this application to be paid in winding up Armstrong Ledlie & Stillman Pty. Ltd. 009 656 044 1/16 Belcap Portfolio Pty Ltd 009 265 169 1/16 Bell Properties Pty Ltd 008 675 625 1/16 Davsell Pty Ltd 002 235 574 1/16 Godine Enterprises Pty Ltd 009 237 316 1/16 Godine Finance Pty Ltd 009 237 325 1/16 Group Color (W.A.) Pty. Limited 008 687 769 1/16 Harlesden Pty. Ltd. 008 773 411 1/16 HJW Engineering Pty. Ltd. 008 975 746 1/16 Overells' Limited 009 658 020 1/16 Savidge & Killer Pty. Ltd. 009 680 639 1/16 TBGL Securities Pty Ltd 008 713 513 1/16 Wanstead Finance Pty Ltd 009 227 570 1/16 W & J Financial Services Pty. Limited 002 407 696 1/16 Wigmores Air Services Pty. Ltd. 008 742 863 1/16 Wigmores Finance Pty. Ltd. 008 679 230 1/16