FEDERAL COURT OF AUSTRALIA

Bell Group N.V. v Bell Group Finance Pty Ltd, in the matter of Western Interstate Pty Ltd [2018] FCA 1440

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be transferred to the Supreme Court of Western Australia pursuant to s 1337H of the Corporations Act 2001 (Cth).

2.    The costs of the transfer application be reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER J:

1    The fifth defendant, Bell Group (UK) Holdings Limited (in liquidation) (BGUK) applies for the transfer of this proceeding to the Supreme Court of Western Australia pursuant to s 1337H of the Corporations Act 2001 (Cth). This proceeding is, in substance, but one part of a very much larger, notorious dispute generally described as the ‘Bell Litigation’. Most of the Bell Litigation is being, and has been, conducted in the Supreme Court.

2    This proceeding, commenced by the plaintiff, Bell Group N.V. (in liquidation) (BGNV), raises what might be regarded as a distinct issue which needs to be resolved before determination of many of the issues outstanding in the Bell Litigation. As I think BGNV fairly points out, this transfer application is somewhat unusual because BGUK does not emphasise to any great degree the risk of inconsistent findings between this case and the litigation being conducted in the Supreme Court. Rather, BGUK focuses on commercial and case management factors, which it says clearly supports the transfer of the proceeding to the Supreme Court.

3    The transfer of a proceeding under the Corporations Act, or otherwise, will not be made lightly. A judge docketed with a particular proceeding fully expects to dispose of that proceeding. Nonetheless, in my view, the circumstances in this instance are exceptional and an order for transfer should be made. (Amongst all the relevant considerations examined in the cases, one consideration which does not, of course, feature is the preference of the initially docketed judge to hear the matter.) If, as circumstances transpire, it is not convenient for the Supreme Court to deal with this proceeding, I would fully expect the proceeding to be transferred back to this Court.

4    The Bell Litigation appears to produce endless twists and turns. As such it is impossible to predict with certainty whether issues raised in this proceeding, either in its present form or in accordance with a foreshadowed cross-claim and a foreshadowed joinder application, will give rise to different courts determining the same issue. That is but one consideration. Another is that no party, other than BGNV, opposes the proposed transfer and some parties actively support the transfer to the Supreme Court, which has been described by French CJ in the High Court of Australia as the ‘natural home’ of Bell Litigation: Reasons for Judgment in P28 of 2016, Insurance Commission of Western Australia v Woodings as Liquidator of The Bell Group Ltd & Ors, delivered 2 September 2016 (at 5).

THE PRINCIPLES

5    In considering this application, the focus is upon the ‘interests of justice’: s 1337H(2) of the Corporations Act.

6    Section 1337H of the Corporations Act relevantly provides:

1337H    Transfer of proceedings by the Federal Court and State and Territory Supreme Courts

(1)    This section applies to a proceeding (the relevant proceeding) in a court (the transferor court) if:

(a)    the relevant proceeding is:

(i)    a proceeding with respect to a civil matter arising under the Corporations legislation; or

(ii)    a subsection 1337B(3) proceeding; and

(b)    the transferor court is:

(i)    the Federal court; or

(ii)    a State or Territory Supreme Court.

(2)    Subject to subsections (3), (4) and (5), if it appears to the transferor court that, having regard to the interests of justice, it is more appropriate for:

(a)    the relevant proceeding; or

(b)    an application in the relevant proceeding;

to be determined by another court that has jurisdiction in the matters for determination in the relevant proceeding or application, the transferor court may transfer the relevant proceeding or application to that other court.

…

(emphasis added)

7    In the context of an application such as the present, the determination of the interests of justice necessitates a balancing of relevant factors in a practical manner. In Hancock Prospecting Pty Ltd v 150 Investments Pty Ltd (2017) 120 ACSR 495, Yates J examined the relevant considerations (at [65]-[68]) as follows:

[65]    There is authority to the effect that s 1337H(2) of the Corporations Act, unlike s 5(4) of the Cross-vesting Act, contains a residual discretion not to transfer a proceeding even though the requirements for transfer are made out: Re Westgate Wool Co Pty Ltd (in liq) (2006) 206 FLR 190; [2006] SASC 372 at [31]. The circumstances in which such a discretion would be exercised are not clear to me. Whilst I acknowledge the permissory terms in which s 1337H(2) is cast (“…the transferor court may transfer the relevant proceeding…”), I would have thought that any relevant circumstance tending against the exercise of the discretion in favour of transfer would have fallen into the mix of factors to be taken into account in determining where the interests of justice lie, rather than standing outside those factors. I need not dwell on that matter because, in the present case, HPPL did not suggest that there were any separate considerations standing outside the considerations relevant to where the interests of justice lie.

[66]    Section 1337L of the Corporations Act provides that, in deciding whether to transfer a proceeding under s 1337H, a court must have regard to the principal place of business of any body corporate concerned in the proceeding; the place or places where the events that are the subject of the proceeding took place; and the other courts that have jurisdiction to deal with the proceeding. As I have noted, HPPL places reliance on the fact that Western Australia is the principal place of business for HPPL and the fact that the Articles, the 1962 Agreement and the 1968 Agreement were all entered into in Western Australia.

[67]    In Yara Pilbara Fertilisers Pty Ltd (formerly known as Burrup Fertilisers Pty Ltd) v Oswal (No 8) [2015] FCA 49, McKerracher J summarised the guiding principles to be applied on a transfer application as follows:

24    The leading authority which canvasses many of the issues to be taken into account is BHP Billiton Limited v Schultz (2004) 221 CLR 400; 211 ALR 523; [2004] HCA 61 (BHP). As the case law reflects, it is necessary to conduct a balancing exercise between relevant factors that inform as to whether or not it is in the interests of justice to transfer a proceeding. The weighing of considerations, such as cost, expense and convenience, even when they conflict, is a familiar aspect of the kind of case management involved in many cross-vesting applications: BHP per Gleeson CJ, McHugh and Heydon JJ (at [19]). While BHP considered the cross-vesting regime, for practical purposes the criteria for determining whether a proceeding should be transferred are broadly consistent with the criteria for determining cross-vesting: see Dwyer v Hindal Corporate Pty Ltd (2005) 52 ACSR 335; [2005] SASC 24 per Debelle J (at [13]). The question is essentially practical, or in the words used in BHP, it is essentially a “nuts and bolts” management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute: BHP per Gleeson CJ, McHugh and Heydon JJ (at [13]); Bankinvest AG v Seabrook (1988) 14 NSWLR 711; 90 ALR 407 per Street CJ (at NSWLR 713–14; ALR 408–9). The ‘interests of justice’ is an expression to be interpreted broadly: BHP per Gleeson CJ, McHugh and Heydon JJ (at [15]).

25    The Court should not approach the transfer question with any presumption as to where the interests of justice lie: BHP per Gleeson CJ, McHugh and Heydon JJ (at [25]). It is not a circumstance in which an applicant has an onus of persuasion analogous to an onus of proof: BHP per Gummow J (at [71]). The disposition of an application for transfer of a proceeding does not require weight to be given to the plaintiff’s choice of forum, which is essentially a neutral factor: BHP per Kirby J (at [168]) and per Gummow J (at 77).

26    As I noted in Commissioner of Taxation v Residence Riverside Pty Ltd ([sic]as trustee for the D & J Discretionary Trust and as Trustee for the D& J Investment Trust [2013] FCA 720 (at [17]), this Court has previously recognised many factors as being relevant to the decision, which will vary in weight from case to case, including:

(1)    the stage of the proceedings in the respective courts;

(2)    the commonality or diversity of the parties;

(3)    the nature of the proceedings;

(4)    the commonality or diversity of issues;

(5)    the risk of conflicting findings of fact or conflicting orders;

(6)    a costs benefit analysis;

(7)    the potential unnecessary drain on judicial and other public and private resources; and

(8)    whether there is any particular judicial expertise residing in one court of the other.

[68]    HPPL drew attention to Spigelman CJ’s observation in James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357; [2000] NSWCA 353 at [20] that the interests of justice lie with the efficient and expeditious disposal of the proceedings. On the question of onus, it also relied on his Honour’s observation at [100] that where the application involves the exercise of a judicial discretion according to proper principle, it is natural to regard the applicant as carrying at least the persuasive onus with respect to how that discretion should be exercised, even if the applicant does not, strictly speaking, bear an onus of proof.

THE CONTEXT

8    From affidavits relied upon by the parties in relation to this application, the following salient facts emerge.

9    The original Bell Group proceedings, in which the liquidators and various companies in the ‘Bell Group’ brought proceedings against the former bankers of the Bell Group, were settled (ostensibly) in late 2013. As a result of the settlement, the first defendant, Bell Group Finance Pty Ltd (in liquidation) (BGF) has approximately $1.3 billion available for distribution to creditors. With those funds available, the second defendant, Mr Woodings commenced proceedings as liquidator of BGF and TBGL in August 2014 in the Supreme Court, COR 146 of 2014, by which he seeks orders concerning the distribution of the assets, including those to BGF. He also seeks a special order for the ‘Indemnifying Creditors’, including the Insurance Commission of Western Australia (ICWA) and possibly BGNV, with the remaining funds to be applied to ordinary creditors of BGF. Significantly, BGUK is not currently a party to COR 146. However, BGUK does have an interest in the outcome of that proceeding, partly by reason of the amended cross-claim it seeks leave to file in this proceeding. That application, yet to be heard in this Court, depends upon the outcome of this transfer application. On the other hand, BGNV, ICWA, and W.A. Glendinning & Associates Pty Ltd (WAG), are already parties to the Supreme Court proceedings. Both ICWA and WAG have foreshadowed applications to be joined, or at least heard, in this proceeding if this proceeding is not transferred to the Supreme Court. Similarly, if this proceeding is transferred to the Supreme Court there may be no need for BGUK to be joined to the Supreme Court proceedings.

10    COR 146 has been provisionally set down by the Hon Justice Pritchard, the docketed judge, for a hearing in the Supreme Court between September and December 2019 and February and April 2020 and is intended to be heard with CIV 2666 of 2016 (to which I refer in greater detail below) (collectively the Supreme Court Bell proceedings).

11    The third defendant in this proceeding, Western Interstate Pty Ltd (in provisional liquidation), has lodged a proof of debt of approximately $758 million in the liquidation of BGF, representing approximately 34% of all creditor claims. Mr Woodings has not yet adjudicated on that proof. It is contended by BGUK that the reason for this deferral is that Mr Woodings is conflicted from doing so such that it may be necessary to appoint a Special Purpose Liquidator or otherwise resolve the issue. It is unnecessary for me to resolve that question. What is important, however, is to understand the basis of Western Interstate’s claim.

12    It is contended that Western Interstate is a creditor of BGF because BGUK directed BGF to repay to Western Interstate certain funds that BGUK had lent to BGF primarily in late 1988 in exchange for the issue by Western Interstate of 43,405 redeemable Preference Shares to BGUK (Share Subscription). BGNV challenges the validity of Western Interstate’s proof in this proceeding, essentially on the basis that the Share Subscription was a ‘fraudulent artificial arrangement concocted after the event’ and that BGUK did not pay any consideration to Western Interstate such that the purported on-loan by Western Interstate to BGF ‘never occurred’. It also challenges Western Interstate’s capacity in respect of the Share Subscription. The issue in the proceeding in this Court is whether Western Interstate is a creditor of BGF or whether BGUK, or some other entity is, in fact, a creditor.

13    The issue has been dormant for a long time. Indeed, it appears that whether BGUK was a creditor of Western Interstate, or of BGF, is a matter that was referred to as a material uncertainty 22 years ago, in 1996, by Templeman J in the Supreme Court in Bell Group Ltd (In Liq) v Westpac Banking Corporation (1996) 18 WAR 21 (at 33).

14    The practical or commercial context is significant. BGNV is already admitted as a creditor of BGF for about $394 million. However, if Western Interstate is not a creditor of BGF then BGNV will obtain a considerable further financial advantage. WAG has also been admitted as a creditor of BGF for about $183 million. The outcome of the relief sought in this proceeding is almost certainly to have a bearing on the bigger issues in COR 146 regarding the distribution of the assets of BGF.

15    A not insignificant factor, in my view is that ICWA strongly supports the transfer of this proceeding to the Supreme Court. Mr Woodings also strongly supports the transfer. WAG neither opposes, nor supports the transfer.

16    In the other Supreme Court proceeding, CIV 2666, ICWA seeks declarations that it is a creditor of BGF, at least for the purpose of s 564 of the Corporations Act (which facilitates court ordered recovery of funds in relation to certain creditors). That proceeding addresses certain funding arrangements between ICWA, BGNV and other parties. A number of those agreements concern Western Interstate and certain ordinary shares, specifically 57,000 ordinary shares in Western Interstate held by Mr Woodings on trust for the ‘Indemnifying Creditors’. ICWA’s possibility of obtaining a return as a beneficiary of that trust will depend on Western Interstate having a surplus in its winding up to be returned as capital. This will only occur if Western Interstate is admitted as a creditor of BGF. However, if BGNV’s contention is correct and Western Interstate is, in fact, not a creditor of BGF, then there will be little value in those ordinary shares. ICWA, as an ‘Indemnifying Creditor’, would not receive one of the benefits contemplated by the funding agreements. On this basis, BGUK emphasises that the determination of ICWA’s contentions regarding Western Interstate will be relevant to the assets which will ultimately be available for distribution in the liquidation of BGF. This is, in essence, the significant commercial consideration to which BGUK points.

17    At the time of preparing these reasons, the Court of Appeal of the Supreme Court has reserved judgment on BGNV’s application for leave to appeal from its unsuccessful strike out application in respect of ICWA’s pleading raising the Western Interstate issue. BGNV opposes the transfer, partly because of the possibility it may succeed on that appeal which would support its ‘no overlap’ argument (discussed further below). Counsel for BGNV submitted that I should defer delivery of my reasons and determination of this application until the outcome of its application for leave is determined. BGUK opposes that course. I see no reason to defer as the reason for transfer is not based to any significant degree on ‘overlapping issues’.

18    As another part of this history, it is to be noted that ICWA filed its writ of summons in the High Court on 9 June 2016, apparently in order to overcome potential jurisdictional difficulties. On 2 September 2016, however, French CJ remitted those proceedings from the High Court to the Supreme Court, not to the Federal Court as sought by BGNV. It was in the reasons for remittal that French CJ noted that the Supreme Court was the ‘natural home’ for disputes in connection with the distribution of the proceeds of the settlement of the long running Bell Litigation. While ‘natural home’ may not be a technical term, its meaning, in the context set out here, is clear. This proceeding is also undoubtedly a dispute in connection with the distribution of the proceeds of the settlement of the long running Bell Litigation.

CONTENTIONS IN SUPPORT OF THE TRANSFER

19    The connection between this dispute and the Supreme Court Bell proceedings is obvious. While BGNV focusses in great detail on why there is not an overlap, let alone a ‘significant overlap’ of issues, that is but one consideration. On the principles indicated above, including Yates J’s statement in Hancock, the risk of overlap need not be a central consideration. Certainly, it has not been the focus of attention by BGUK in its arguments on the transfer application. BGUK does not rely on ‘overlap’ or ‘substantial overlap’ as the primary reason why this proceeding should be transferred.

20    It seems apparent that the Supreme Court is already mindful of the possibility of hearing the Western Interstate issue, which embraces the issue in this proceeding in this Court. On 26 July 2017, Pritchard J ordered in the Supreme Court Bell proceedings that the parties indicate at a ‘Strategic Conference’ (ultimately held on 2 February 2018) what ‘[o]ther matters’ they considered ‘must be determined before the Bell Matters can proceed to trial (e.g. tax liability, Western Interstate, JNT Holdings proof of debt, etc.)’. The reference to ‘Western Interstate’ was, essentially, a reference to the dispute presently advanced in the proceeding in this Court. Pausing to deal with ‘tax liability’, there are two matters in this Court affecting tax liability. One is a proceeding seeking the resuscitation of deregistered companies and ancillary relief, in part directed to deriving tax benefits (WAD 270 of 2017), and the other is a significant tax appeal (NSD 2098 of 2015). There are exclusive federal jurisdiction elements in those disputes.

21    As Pritchard J noted in reasons delivered on 1 February 2018, one issue not then resolved was whether there should be one single trial or whether some parts of the action should be the subject of an initial separate trial, with the remaining parts to be resolved later: Insurance Commission of Western Australia v Woodings (No 2) (2017) 124 ACSR 45 (at [211]); Insurance Commission of Western Australia v Woodings (No 3) [2018] WASC 44 (at [26]). That, of course, is entirely a matter of case management for the docketed judge of the Supreme Court Bell proceedings. In this regard, BGNV suggested that there may be a difficulty in Pritchard J determining this particular issue if the proceeding was transferred to her Honour’s docket by reason of her Honour having been invited to examine various purportedly privileged material relevant to the issue. I would regard this factor as neutral. If this proceeding were transferred, it would be entirely a matter for the Supreme Court to determine how it and the other Bell Litigation would be managed, whether it be by her Honour and/or some other judge. However, if some other judge were to determine one aspect of the matter, that is not, as I see it, relevant to any question of the desirability of one court handling the related facets and issues arising in the Supreme Court Bell proceedings. BGNV’s argument about partial difficulty, which was raised for the first time in oral reply submissions, should be rejected or given no weight in the exercise of the Court’s discretion. The Court is not in a position to pre-judge this hypothetical issue or assess whether any hypothetical application has any merit. Any such application would need to be determined by Pritchard J or whomever the docketed judge may be if and when a moving party makes such an application at some future point in time. This Court is not in a position to form a view as to the outcome or chance of success of any such hypothetical application should it ever be made. (I note in passing that since hearing this application, Pritchard J has been appointed to the Court of Appeal of the Supreme Court so that whether various assumptions on which argument was based will still apply is, yet again, entirely a matter for that Court.)

22    It is common ground, at least at present, that the Western Interstate issue arising in this proceeding will need to be determined either at the same time or before the other issues arising in the Supreme Court Bell proceedings. The outcome of the issue will affect the availability of funds of BGF for distribution to creditors. Again, taken alone, this is a neutral factor on the transfer question provided this Court could deal with the current proceeding expeditiously and without compromising the case management of the Supreme Court Bell proceedings. However, about that question, there is real doubt.

OPPOSITION TO THE TRANSFER

23    BGNV strongly opposes the transfer application, stressing that the transfer should only be made if this Court is satisfied that it is ‘more appropriate’ for this proceeding to be determined by the Supreme Court. If it were simply ‘equally appropriate’ for the Supreme Court to determine the matter, there should be no transfer. I accept this contention. It accords with the language of s 1337H and the case law concerning the provision: see, for example, Re HIH Insurance Ltd (in liq) (2014) 104 ACSR 240 per Brereton J (at [7]); Seven Network (Operations) Limited and Anor v Amber Harrison [2017] NSWSC 405 per Sackar J (at [33]); and Coshott v Crouch [2018] NSWSC 853 per Parker J (at [65]).

24    The point on which BGNV places great emphasis is that BGUK cannot point to any factual or legal overlap between this proceeding and the Supreme Court Bell proceedings such that the two Courts may be called upon to make the same or similar findings with consequent potential inconsistencies. BGNV argues that BGUK’s argued case management efficiencies are simply asserted, rather than demonstrated. BGNV says these contended efficiencies are ‘contradicted by the case management reality on the ground’.

25    BGNV points to the fact that while BGUK is a party to the Federal Court proceeding it is not a party to the Supreme Court Bell proceedings. The whole controversy between BGNV and BGUK, as currently articulated, is being litigated in this Court. The fact that no party to the Supreme Court Bell proceedings (or BGUK) has seen it as necessary or appropriate to join BGUK as a party to the Supreme Court Bell proceedings confirms that none of those parties regard BGUK as a necessary or proper party.

26    While other parties to the Federal Court proceeding (BGF, Western Interstate and Mr Woodings) are also parties to the Supreme Court Bell proceedings, there are a number of other parties to the Supreme Court Bell proceedings, namely, The Bell Group Limited (in liq) ACN 008 666 993, Bell Bros Pty Ltd (in liq) ACN 008 672 375, Mr Garry John Trevor (liquidator of BGNV), Law Debenture Trust Corporation plc, the Commonwealth of Australia, ICWA and WAG, that are not presently parties to the Federal Court proceeding, although some of them may become parties.

27    BGUK has suggested that ICWA and WAG wish to be heard in the Federal Court proceeding and that this which is a factor in favour of transfer because they are already parties to the Supreme Court Bell proceedings. BGNV says this contention should be rejected for three reasons:

(1)    WAG supports BGNV’s opposition to the transfer application;

(2)    BGUK’s submission assumes that ICWA’s joinder/interventer application will be successful. An assumption BGNV contends is not safe. It is opposed on substantive grounds with the merits of the application yet to be determined. BGNV also notes that there is no certainty ICWA will proceed with its application having made it clear that it does not want to jeopardise the prospect of the Supreme Court Bell proceedings going to trial in September 2019; and

(3)    BGUK’s suggestion that WAG wishes to be heard in this Court does not accurately reflect its position.

28    In relation to BGNV’s first argument, this is expressly no longer WAG’s position as evidenced by a letter tendered at the hearing of this application. While I accept the suggestion that WAG wishes to be heard is not a factor of great moment, I consider ICWA’s joinder application relevant.

CONSIDERATION

29    In my view, the commonality of issues is not a particularly significant consideration in respect of this application. I accept the submissions for BGNV that to the extent there is, or may become, a commonality of issues giving rise to potentially conflicting findings, this is, at its highest, a minimal factor for consideration in the present situation. I note the decision of Winpar Holdings Ltd v National Consolidated Ltd [2001] FCA 1663 (at [16]) and what was said there by Allsop J (as his Honour then was) concerning the inappropriateness of two courts deciding the same issues. However, accepting entirely the observations there stated as to the need for a ‘substantial’ overlap and the insufficiency of ‘mere’ overlap, those observations are directed to circumstances where the nature of the overlap is the reason pressed for the transfer. That is not the primary reason pressed for the transfer in this instance.

30    Without traversing the entirety of the issues examined at very considerable detail by BGNV, I accept that the prospect for overlap is limited for a variety of reasons, not least of which is the fact that the events the subject of this proceeding relate to circumstances occurring several years before the events under examination in the Supreme Court. I also reiterate that I accept that there are other substantive tax related proceedings still being conducted in this Court. However, these tax matters are discrete and, as noted, they must be conducted in this Court due to this Court’s exclusive jurisdiction in respect of many of the claims ventilated. I also accept that those proceedings may have an impact upon the pool of funds available for distribution.

31    Accepting BGNV’s arguments that there is very little overlap as the pleadings are presently structured (although with cross-claims and the joinder application, this may well change), BGNV contends that the argument by BGUK as to the likelihood of less delay on transfer is completely theoretical. BGNV points out that in the Supreme Court Bell proceedings there are six main parties, being, ICWA, BGNV, Mr Woodings and the related Bell Companies, Law Debenture Trust Corporation plc, WAG and the Commonwealth. Given the number of parties, BGNV says it has been notoriously difficult to find times for directions and other hearings that are both convenient to the Supreme Court and the parties. BGNV contends this problem would be compounded if the Federal Court proceeding were transferred to the Supreme Court to be case managed with the Supreme Court Bell proceedings. BGNV points out that at the moment if a hearing date in this Court is needed the convenience of only two parties needs to be accommodated given that Mr Woodings is not taking an active role in the litigation. If there is a transfer to the Supreme Court fixing a date for even a simple directions hearing will require finding a date convenient to seven parties and the Supreme Court. BGNV argues that this will inevitably increase the prospect of delay compared with the present position in this Court. Further, BGNV points to the fact that Pritchard J has indicated to the parties that available time next year is already quite limited for the Supreme Court.

32    BGNV also suggests that there will be added cost to BGUK associated with attending case management hearings that will inevitably be longer than case management hearings would be in this Court given the additional parties and additional issues. Given the sums claimed, this generalised suggestion is not a significant factor in my view.

33    BGNV rejects BGUK’s argument about the past procedural relationship between this proceeding and the Supreme Court Bell proceedings. However, I do not consider it is necessary in deciding this application to delve in any great degree into any contended for ‘procedural interrelaionship’. I am prepared to decide this application on the assumption that there is, as this proceeding is presently structured and pleaded, little overlap of issues.

34    I accept BGNV’s submission that one consideration is the likely hearing date of the proceeding if it remains in this Court compared with if it is transferred to the Supreme Court. BGNV points out that if the proceeding is transferred that there is uncertainty regarding when the matter would go to trial. One possibility is for this proceeding to take place in this Court before the trial of COR 146 or CIV 2666 in the Supreme Court. The second possibility is for this proceeding to be heard at the same time in the Supreme Court. BGNV points out there is no guarantee that the provisionally allocated six months, commencing from September 2019, is a date that can be met. Rather, BGNV says that there is no reason why BGUK and BGNV, consistent with their overarching obligations, could not be ready for trial of the Federal Court proceeding later this year. On this topic, BGNV says that its consistent position has been that it wants this proceeding to proceed as quickly as possible. BGNV submits that despite BGUK’s previous manifest position supporting the timely progression of this proceeding, its filing of this transfer application and subsequent portrayal of this proceeding as long and complicated, requiring both lay and expert evidence, is contrary to that position. BNGV argues the Court should place little weight on BGUK’s contentions regarding the timely disposition of this proceeding in circumstances where BGUK refuses to identify the lay witnesses it says it intends to call and has not yet retained an expert.

35    Insofar as lay witnesses are concerned, extensive witness statements dealing with the issues the subject of this proceeding were obtained on BGUK’s (and BGNV’s) behalf in 2003 and 2004 as part of the main Bell Litigation before Owen J. Those witness statements are exhibited to Mr Lipman’s affidavit of 13 May 2016, filed in this proceeding. The bulk of the work in proofing the lay witnesses has therefore already been done. The process of conferring with those witnesses to refresh those statements should not be an extensive exercise. BGNV contends it is a process that should be measured in days, not weeks or months.

36    Additionally, as alluded to above, BGUK’s case is that meetings of its directors in fact occurred between 1 September and 10 November 1989 at which resolutions in terms of those recorded in the minutes of December 1988/January 1989 were passed. Those minutes apparently confirm that the only attendees at those meetings were Mr Alan Bond and Mr Michael Edwards. Both men are now deceased. I say ‘apparently’ as one cannot eliminate entirely the possibility of other witnesses who were not recorded in the relevant minutes. BGUK says that it does not accept BGNV’s statement that this is a documentary case. BGNV responds by querying how then does BGUK intend to prove that the meetings it relies upon did in fact take place when the only participants to those meetings cannot be called to give evidence.

37    BGNV says that in this context, it is apposite to note the submission of BGUK’s senior counsel to this Court in March 2017:

Bearing in mind this happened decades and decades ago. And it’s highly unlikely any live witness is going to have a recollection, even if they’re still alive.

38    BGNV agrees.

39    As to the question of the need for expert accounting evidence to ‘explain’ the journal entries upon which BGUK relies, the short point is that the meaning of the journal entries is not likely to be in dispute. What is contended to be in dispute is whether those entries are genuine (in the sense of recording transactions that in fact took place as opposed to back dated fabrications) and, even if they are genuine, whether the entries establish, as a matter of law, the matters that BGUK seeks to prove. BGNV submits these are not matters for expert evidence.

40    BGNV says it is in the interests of justice to bring this proceeding to a timely hearing in this Court, rather than transfer the proceeding to the Supreme Court where it may not be able to be heard before September 2019 at the earliest, not least because if the proceeding is determined favourably to BGNV it will have efficiency consequences for the conduct of the Supreme Court Bell proceedings as certain of ICWA’s prayers for relief will fall away. Accordingly, BGNV argues that it is highly likely that the matter will be dealt with more expeditiously in this Court.

41    BGNV submits that other factors on the checklist that I outlined in Yara Pilbara Fertilisers Pty Ltd [formerly known as Burrup Fertilisers Pty Ltd] v Oswal (No 8) [2015] FCA 49 (followed by Yates J in Hancock and extracted above) are neutral. I also accept this submission. I do not regard other factors as being seriously in dispute or relevant.

42    I note that s 1333L of the Corporations Act records certain mandatory considerations to which the Court must have regard in determining whether to transfer proceedings under s 1337H. These considerations are:

(a)    the principal place of business of any body corporate concerned in the proceeding or application; and

(b)    the place or places where the events that are the subject of the proceeding or application took place; and

(c)    the other courts that have jurisdiction to deal with the proceeding or application.

43    These are relatively neutral factors in respect of this application, particularly as the transfer contemplated is from the Perth Registry of the Federal Court to the Supreme Court of Western Australia. Further, the Courts shared jurisdiction to entertain this proceeding is not controversial.

44    In my view, the similarities between Hancock and the present case are obvious. There can be no doubt that even if the issue of whether Western Interstate is a creditor of BGF is discrete, its resolution may well assist in narrowing the broader issues in dispute in COR 146. There is no doubt that the Supreme Court has access to the same case management principles and flexibility as this Court. The observations of Yates J in Hancock (at [70]) are, in my view, entirely applicable to this case where his Honour said:

Be that as it may, I also accept that, within the context of the Trust proceeding, a resolution of the issues raised in the present proceeding may well assist in narrowing the broader issues in dispute between the parties. HPPL may well be correct when it says that the efficient determination of the issues raised in the present proceeding would assist the efficient determination of the Trust proceeding and may result in a substantial saving of legal costs and court resources. But assuming those observations to be correct, as they well might be, it does not follow that those advantages can only be secured by the present proceeding remaining in this Court. If those advantages are real and capable of attainment, they can just as readily be realised by transferring the present proceeding to the Supreme Court, where the standard principles of case management can be equally deployed to ensure that the Trust proceeding is conducted as quickly, inexpensively and as efficiently as the just determination of the case requires. Indeed, to my mind, it makes no sense that an apparently anterior but nevertheless central question in a case raising a broad range of issues for determination in one court should be treated, effectively, as a separate question for resolution in another court having the same jurisdiction as the first court to hear and determine that separate question. It seems to me that fragmentation of that kind can only lead to manifest inefficiency and certainly greater cost brought about by the inevitable and unnecessary duplication of work. In this connection, I accept the thrust of BHR’s submission that, regardless of the findings that might be made if the present proceeding were to be heard and determined in this Court, much of the evidence to be relied on is likely to be relied on (BHR says will be relied on) in the Trust proceeding, including in relation to GHR’s state of mind at relevant times. There is also the real likelihood of delay arising from an inability to co-ordinate court events optimally while (what is essentially) one dispute straddles two courts. Such fragmentation is not conducive to efficient case management or to outcomes that serve the interests of justice.

(emphasis added)

45    I respectfully agree with his Honour’s observations about the real likelihood of delay arising from an inability to coordinate court events optimally while what is essentially part of one substantial dispute straddles two courts. That has clearly been the experience already in the progress of this proceeding. There have been indications already of the need to, or requests to, await the outcome of the events in the Supreme Court before this matter could be further advanced in this Court. I say that without the slightest criticism of any party or any court. It is simply a function of matters proceeding in more than one location.

46    As the authorities dictate and as already observed in both Oswal and Hancock, the decision to commence proceedings in the Federal Court should not be given undue emphasis and certainly could not be given any precedence. There is no real advantage in continuing in this Court, having regard to the quite substantive interlocutory matters which still require resolution and will almost inevitably, on their own, lead to further applications for leave to appeal. Once the appeals are heard and determined in respect of the two substantive interlocutory applications already foreshadowed in this proceeding, the prospects of a Full Court of this Court resolving those matters prior to the targeted September 2019 deadline is not strong. One need only examine the history of the Bell Litigation over several decades to take a sobering reality check as to assurances of swift resolution. The Bell Litigation’s true ‘seat’ (to coin the term employed by Yates J in Hancock at [72]), or ‘natural home’ as French CJ has previously noted, has been the Supreme Court since the proceeding were transferred by Carr J from the Federal Court: Bell Group Ltd v Westpac Banking Corporation (2000) 104 FCR 305.

47    The fact that BGNV foreshadows firm opposition to ICWA being joined as a party to this proceeding is another issue which will assume less significance if there is a transfer to the Supreme Court where the ICWA is already a party. As explained, ICWA applied in June 2016 to be joined to these proceedings and it is anticipated ICWA will advance certain abuse of process and estoppel arguments if joined. Those arguments were originally pleaded by it in CIV 2666. At least to the extent that ICWA proposes to advance those arguments, BGNV opposes the joinder. There is talk of ICWA’s interlocutory application for joinder requiring a four day hearing. While I am not satisfied that four days would be required, there would certainly be a day required. It seems improbable that there would be such a hearing, four days or otherwise, if the proceeding were transferred.

48    As matters presently stand, it is clear that there is a strong connection between the proceedings in the two courts, of which this proceeding is just a part. If BGNV succeeds in its appeal to the Court of Appeal, perhaps that strength of connection may be different, but there is no doubt that there is both a present connection and an increasing likelihood of further connection between the Supreme Court Bell proceedings and this proceeding as matters evolve in the Supreme Court. In this regard, I note in its unsuccessful strike out application, BGNV claimed that ICWA’s pleadings concerning Western Interstate had ‘no present utility’ because, inter alia, they assumed that Western Interstate was a creditor of BGF: Woodings (No 2) per Pritchard J (at [214]). However, in truth, that claim depends on the validity of the Share Subscription which is the ‘very transaction impugned in the Federal Court proceedings’: Woodings (No 2) per Pritchard J (at [215]).

49    Pritchard J was not persuaded that those parts of ICWA’s pleadings were ‘so clearly irrelevant’ to the relief sought by ICWA so as to be likely to ‘prejudice, embarrass or delay the fair trial of the action, or that their continued inclusion in the SFIC [Statement of Issues and Contentions] would give rise to an abuse of the process of the Court’: Woodings (No 2) (at [215]). Her Honour also rejected (Woodings (No 2) (at [216]-[218]) and, see also, Woodings (No 3) (at [28])) the submission by BGNV that the inclusion of [978A] by ICWA was an abuse of process, being:

a transparent attempt on the part of ICWA to conjure up a non-existent overlap between CIV 2666/16 and [the Federal Court proceedings] to enhance ICWA’s foreshadowed application to the Federal Court (if it is joined as a party) to transfer [the Federal Court proceedings] to this Court ... Paragraph 978A is an attempt to create such a common sub-stratum and is an abuse of process.

50    BGNV has repeatedly asserted that the issue in this proceeding is narrow and that a short expedited hearing is possible in this Court, well before hearings in the Supreme Court could occur. On the face of the matters as they presently stand, there is room for that submission as there is primarily documentary evidence of the two relevant directors, Messrs Bond and Edwards who are no longer alive. But, in reality, this contention does not withstand scrutiny. Assuming BGUK obtains leave to file its proposed amended cross-claim and ICWA succeeds in its application for joinder (both of which are not on their face unreasonable assumptions) the proceeding has the potential, not only to be significantly more protracted, but also significantly to overlap with events in the Supreme Court Bell proceedings.

51    Who should have access to the BGF asset pool, and in what proportions, are issues centrally focussed in the Supreme Court Bell proceedings. This Federal Court proceeding is but one part of that bigger question. While the risk of conflicting factual findings may presently be low, it makes no sense to have this particular issue dealt with separately from the bigger question on foot in the Supreme Court.

ICWA’S POSITION

52    I also heard argument from ICWA in support of the transfer application. I heard that argument notwithstanding opposition by BGNV to ICWA being heard as ICWA is not presently a party. I consider ICWA is entitled to be heard just as I consider the claim in this proceeding to be but part of the bigger dispute in the Bell Litigation. The opposition to ICWA being heard, in my respectful view, just illustrates the artificiality of severing off this proceeding in its current format, without regard to the entirety of the dispute, which, in essence, is the manner of distribution of the funds to creditors by Mr Woodings. Mr Woodings very strongly supports the transfer. In an earlier hearing senior counsel appearing for Mr Woodings stated that there is ‘just an overwhelming case for transfer’. As ICWA points out, BGNV is the only party that actively opposes the transfer and if the proceeding is transferred it will be open to the Supreme Court to ensure that all the distribution matters, including the Western Interstate issue the subject of this proceeding, are able to be determined in a sequence which Pritchard J (or such other judge to whom the Supreme Court Bell proceedings may be docketed), having regard to the entirety of the distribution issues, regards as being a logical sequence. As ICWA observes, in some respect, the Supreme Court Bell proceedings are at least as advanced as this proceeding in that there is at least a provisional listing for six months from September 2019. There is little prospect, ICWA argues with some force, that the interlocutory matters foreshadowed in this Court (the primary judgment, appeals from those judgments and determinations of the Full Court) would be resolved before September 2019. This is in circumstances where the issue of the proper parties to this proceeding is still in dispute and pleadings are not closed in light of BGUK’s application to file an expanded cross-claim. There is at least some prospect that if the proceeding is transferred and heard before or concurrently with the other distribution issues in the Supreme Court, the primary instance decision will be subject to just one appeal. I accept ICWA’s submissions that this is a more orderly outcome for the efficient use of public resources and the due administration of justice.

53    ICWA also contends that there are several overlapping issues. As I have indicated elsewhere in these reasons, I am not persuaded that that is (at least at present), a factor of significance. Rather, I think the case management issue is the relevant factor overwhelmingly in support of the transfer to the Supreme Court.

54    For all those reasons, having regard to the interests of justice, it is more appropriate that this proceeding be transferred.

CONCLUSION

55    It is a matter for the Supreme Court as to whether or not the transferred proceeding be case managed with the existing Supreme Court Bell proceedings and whether it be case managed by any particular judge. It is inappropriate that I make any suggestions, let alone orders in that regard as sought.

56    In relation to the costs of this application, no party has suggested that costs should not follow the event or that some other order would be suitable. However, I consider that costs of the application should be reserved to the Court which ultimately determines this proceeding.

Associate:

Dated:    20 September 2018

SCHEDULE OF PARTIES