ODE TO A DYING CORPORATION: “THE SMELL OF CORDITE, GUN POWDER AND NAPALM NO LONGER FILLS THE AIR”

The heading of the judgment of Master Sanderson in Bell Group (UK) Holdings Limited (In Liquidation) [2020] WASC 347 includes “Corporations law – Ode to a dying corporation – Turns on own facts”.  This led me to want to investigate more. This judgment is partly a warning of the dangers of litigation, partly a brilliant piece of prose.  It is the first judgment I have read that ends with the words “amen”.

 

“Thousands of people worked on this case. Most have put the experience behind them and moved on; many, shattered by the experience, have retired; more than a few have gone mad. Now the guns have fallen silent. The smell of cordite, gun powder and napalm no longer fills the air. The dead and wounded have been removed from the battle field. The victors have divided the spoils and departed.”

THE JUDGMENT
  1. These reasons are not so much a judgment as a requiem.
  2. This was an application to terminate the winding up by Bell Group (UK) Holdings Ltd (In liq) (the company) of Western Interstate Pty Ltd. This was one of a group of companies around which what is known as the ‘Bell litigation’ swirled for 25 years.
  3. Thousands of people worked on this case. Most have put the experience behind them and moved on; many, shattered by the experience, have retired; more than a few have gone mad. Now the guns have fallen silent. The smell of cordite, gun powder and napalm no longer fills the air. The dead and wounded have been removed from the battle field. The victors have divided the spoils and departed.
  4. The trial involving this company, and others, lasted for 404 days between July 2003 and September 2006. The judgment took two years and ran to 2,643 pages. The trial judge was Justice Neville Owen. No Australian judge before or since could have handled the case better than his Honour. Anyone who dips into the judgment – and I do not for a moment suggest anyone should read it in its entirety – will be struck by the detailed consideration of the evidence, the careful balancing of the issues and the clear exposition of a difficult area of the law.
  5. The defendants in the action were a group of banks. At first instance they were held liable. They appealed. Not only did they lose the appeal, they lost the cross‑appeal and the amount of damages was increased. The banks made an application for special leave to appeal to the High Court. Astonishingly, they were successful. At this point even the bare‑knuckled litigators were exhausted. The action was settled. More than a billion dollars was to be divided between the plaintiffs.
  6. The plaintiffs then set to squabbling among themselves. For years they had an uneasy relationship with one another but were united against a common foe. Now the prospect of vast riches proved too much. The relationship rapidly became poisonous. Years passed and no resolution proved possible. The battle lines were drawn. The State government attempted to resolve the matter by effectively confiscating the proceeds of the case and paying to each of the parties what they deemed to be a fair entitlement. This strategy failed spectacularly – the legislation was struck down by the High Court. At a directions hearing, not long after the High Court decision, I was told by counsel they anticipated the trial of the issues between the plaintiffs would take longer to hear than the original case. A date was set for trial. Then someone blinked. Further negotiations took place. Mercifully, the matter settled.
  7. Over the years, I dealt with the case on more than a dozen occasions. Most of these hearings were for judicial directions. It was clear there existed between counsel a mutual loathing. That was probably due to frustration – not only frustration with the glacial progress of the case, but frustration with the clients. Occasionally, agreement was reached – the time of the day, the day of the week – but agreement was otherwise rare. Invariably, the liquidator was represented by Vaughan SC (as his Honour then was). There were times when I thought even his sphinx‑like visage would crack. But somehow, the matter edged forward. Now it is settled and it remained for me to give this, and other companies in the group, a decent burial.
  8. It was tempting to drive a wooden stake through the heart of the company to ensure it does not rise zombie‑like from the grave. As an alternative, I considered ordering the files be removed to a secure facility in Roswell and marked: ‘Never to be opened’. In the end, trusting in divine providence, I made the following orders:
    1. The applicant have leave to discontinue the winding up application.
    2. The applicant’s winding up application is hereby dismissed.
    3. There be no orders as to costs as to the winding up application.
  9. Amen.