Bell Group's long-running court dispute with banks ends in settlement
The case began in 1995 after 20 banks, including Westpac and Lloyds TSB Bank, provided various Bell companies with loans amounting to about $265 million.
The liquidators of the Bell companies claimed the loans had been improperly recovered by the banks when Bell collapsed in 1991.
In 2008, the banks were found by West Australian Supreme Court judge Justice Neville Owen to be liable as knowing recipients of the company's trust property.
The next year, Justice Owen ordered the banks to repay about $350 million in principal, which, with compound interest, resulted in a $1.66 billion award to the Bell companies.
In 2012, the Court of Appeal confirmed Justice Owen's findings against the banks and increased the interest rate. The banks paid about $718 million to the liquidators, but appealed the interest rate.
On Tuesday, the parties said the matter had been settled.
"Settling now is a pragmatic decision which will save further time and costs for all the parties involved," the banks' spokesman, John Vaughan of Herbert Smith Freehills said.
Frequently Asked Questions about this Article…
The Bell Group case centred on liquidators' claims that 20 banks had improperly recovered loans from companies in Alan Bond's Bell Group after the group's collapse in 1991. The long-running legal action began in 1995 when the liquidators sued the banks over those loan recoveries.
About 20 banks were involved in the dispute, including major lenders such as Westpac and Lloyds TSB Bank, according to the article.
The banks had provided various Bell companies with loans amounting to about $265 million. In 2009 Justice Neville Owen ordered the banks to repay about $350 million in principal, which with compound interest produced a $1.66 billion award to the Bell companies.
In 2008, West Australian Supreme Court judge Justice Neville Owen found the banks liable as 'knowing recipients' of the company's trust property. In 2012, the Court of Appeal confirmed those findings and increased the interest rate applied to the award.
Yes. After the Court of Appeal's 2012 decision, the banks paid about $718 million to the liquidators, although they continued to appeal the interest rate.
Yes — the long-running Bell Group litigation has been settled. The parties said the matter had been settled for an undisclosed sum, with banks' spokesman John Vaughan of Herbert Smith Freehills calling the decision 'pragmatic' to save further time and costs.
According to the court finding reported in the article, being a 'knowing recipient' meant the judge determined the banks had received the company's trust property in circumstances that made them legally liable for that property. The finding formed the basis for the repayment orders against the banks.
This case shows that long-running corporate legal disputes can be extremely costly and can take decades to resolve. The Bell Group matter — described as Australia’s most costly and long-running court case — ended in a settlement to avoid further time and legal costs, underscoring how protracted litigation can affect companies and their creditors.
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