After nearly five years, Australia's longest-running legal action is back in court, with a consortium of banks appealing against a 2006 decision in which they were ordered to pay more than $1.6 billion to liquidators.
Freehills is acting for the consortium, which comprises 20 banks including Westpac, NAB, HSBC and the CBA, and Blake Dawson is acting for 28 of the 30 Bell Group companies (the companies) and their liquidators.
The original proceedings which are now subject to the appeal involved a main action and numerous subsidiary actions which were heard in the Supreme Court of Western Australia from July 2003 to September 2006.
In the main action, the companies, among other things, sought to have numerous refinancing transactions set aside. These transactions were undertaken in 1990 as part of the Bell Group's strategy to counter losses incurred as a result of the 1987 stock market crash.
The companies also sought repayment from the banks for all monies received by them, and costs incurred by the companies, as a result of the refinancing. In total, the companies sought to recover $350 million.
The original trial, which ran for close to three years, was heard before Justice Neville Owen. It included 404 sitting days, 37,105 pages of transcript, two separate sittings in London, the testimony of over 150 witnesses, 85,000 tendered documents and $300 million in legal costs.
In a 2600-page judgment, Justice Owen found that the directors of Bell Group had breached their fiduciary duties to the companies and the banks were liable as recipients of property from companies whose solvency was in doubt.
Three retired justices of the Supreme Court - Justices Malcolm Lee, Douglas Drummond and Christopher Carr - will hear the appeal, which began yesterday (18 April 2011) and is expected to conclude at the end of June.
Freehills and Blake Dawson declined to comment when contacted by Lawyers Weekly.