Treasurer Mike Nahan has defended legislation he introduced to end the long-running $1.7 billion Bell Group legal story after it was criticised by the Australian and Western Australian bar associations.
Treasurer Mike Nahan has defended legislation he introduced to end the long-running $1.7 billion Bell Group legal story after it was criticised by the Australian and Western Australian bar associations.
In a joint statement, the associations voiced their concerns about aspects of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Bill 2015, including stopping current applicable corporations legislation from applying to Alan Bond’s collapsed Bell Group and its subsidiaries, and transferring power from the courts to the government.
They also said they were worried that the bill, introduced by Dr Nahan, could criminalise any legal challenge to its validity.
“For example, it appears that a person, including a lawyer, who seeks to overturn the legislation in a court may be guilty of taking a course of action for the purpose of defeating the bill, and so become liable to a fine of $200,000 or imprisonment for five years, or both,” the associations said in the statement.
“The bill has, effectively, retrospective application. It provides that certain agreements entered into previously are now void, and are taken to have always been void.”
The associations said the bill represented to overturning of existing rights and the bypassing of established legislation and the position of the courts.
“Rather, the bill replaces them by executive processes which erode the rule of law, and are conducted without transparency and without the protections which the law currently provides," they said.
Dr Nahan said it was disappointing that the bar associations didn’t see the unique and intractable circumstances of Bell as requiring an intervention to bring an end to 20 years of legal and litigation costs that couldn’t deliver an outcome.
“All creditors are facing further decades of litigation and this intractable problem only has a solution in legislation,” Dr Nahan said.
“This is the only way out. The bill means creditors will get paid soon.”
The associations argued that the bill was ‘eroding the rule of law’, but Dr Nahan said that was misplaced.
“The bill uses existing provisions of the Commonwealth’s Corporations Act which preserves the power of the state parliaments to pass laws displacing the operations of the act, in particular for company insolvencies,” he said.
He acknowledged that while the bill may not be popular for some lawyers, who have racked up over $500 million in legal costs without payments being made back to creditors, it was going to stop the gravy train that the legal community had ridden for 20 years.
“The WA Bar Association and the legal fraternity in general have benefited by $200 million by opposing the bill as this is the amount WA taxpayers have footed to date to fund the litigation,” Dr Nahan continued.
“This matter should be wound up, and the money returned to taxpayers and creditors in years and not decades.”
Dr Nahan introduced the bill to dissolve all Bell Group companies and establish the WA Bell Companies Administrator Authority last month, which will give the state government control of the $1.7 billion owed to creditors and ensure a big slice is distributed to the WA taxpayers through the Insurance Commission of WA.
Mr Bond is currently on life support and in an induced coma after undergoing open heart surgery at the Fiona Stanley Hospital.
