Banks to pay after Bell ruling
A COURT appeal has backfired for 20 banks, which will have to pay up to $3 billion to the liquidators of Alan Bond's former company Bell Group.
A COURT appeal has backfired for 20 banks, which will have to pay up to $3 billion to the liquidators of Alan Bond's former company Bell Group.The WA Court of Appeal yesterday upheld a previous decision ordering the banks including Westpac, the National Australia Bank and Commonwealth to pay Bell Group and also increased the amount from $1.56 billion to a total that is likely to approach $3 billion.In the longest running and most expensive case in Australian legal history, the court accepted part of Bell's counter-appeal, agreeing that the trial judge erred in his calculations and that damages and interest awarded should be higher.The banks were also ordered to pay costs for both sides, estimated to be hundreds of millions of dollars.Acting Justices Malcolm Lee, Douglas Drummond and Christopher Carr returned from retirement to hear the case because all other judges had been involved in earlier litigation. The saga began in 1990 when banks took out the corporate equivalent of mortgages over Bell Group's assets to try and keep the company afloat.When Bell Group collapsed on April 18, 1991, the banks reaped $280 million from the sale of assets. The company's liquidators claimed the banks were also liable because they knew Bell Group was in trouble and sought to recoup the $280 million.Acting Justices Lee and Drummond determined that the principal orders made by Chief Justice Neville Owen in 2006 were properly based on findings the banks knew the Bell Group directors had breached their duty.Acting Justice Carr disagreed, finding no breaches had occurred.Despite yesterday's decision, the case could continue to the High Court.Outside court, Bell Group liquidator Tony Woodings urged the banks to accept the courts' decision. "I invite the banks to now take that decision, accept it, and allow the process of distribution to begin."