Liam Bellamy.
It’s been some time coming – perhaps the elevation of Labor to federal eminence got in the way – but down under’s most intimidating creditor has resumed flexing its litagatorial muscle, in this case in respect of fees the now ex-receivers of Castel Electronics Pty Ltd paid themselves and the divvy they fed the secured.
iNO first canvassed the possibility that the FEG Recovery Unit might pursue such a course in April when we reported on an urgent application by lawyers for FEG seeking orders preventing ASIC from deregistering Castel following the retirement of both the receivers and the company’s liquidators.
The court obliged by ordering that Castel not be deregistered before April 2024 but it wasn’t until the middle of last month that FEG fired its next salvo.
On August 16 FEG – now residing within the Department of Employment and Workplace Relations (DEWR) after its stint in the Attorney General’s Department – filed an originating process naming Jirsch Sutherland Victoria partner Malcolm Howell and RRI Advisory principal Liam Bellamy as defendants.
In the Federal Court yesterday the parties sought by consent an order transferring the proceedings to the court’s Victorian Registry on the basis that the defendants are based there and so are their solicitors and counsel.
As was revealed in the April 13, 2022 judgment of Justice Michael Lee in the Commonwealth of Australia v Castel Electronics Pty Ltd, in the matter of Castel Electronics Pty Ltd [2022] FCA 432 FEG is of the view that Howell and Bellamy incorrectly paid their fees and the debt owed to secured creditor Thorn Australia out of proceeds of a circulating asset as defined in s 340 of the Personal Property Securities Act 2009 (Cth) and that by virtue of the operation of s 433 of the Corporations Act, FEG’s priority advance should have been satisfied ahead of the claims of others.
Bellamy told us yesterday that his position hadn’t changed since we asked him about the matter in April.
Confirming he had not at this time engaged separate legal representation to Howell Bellamy said he will vigorously defend any proceedings brought against him personally, via reliance on “the indemnities provided to me by Jirsch Sutherland”.
Howell did not respond to a request for comment.
Howell and Bellamy were appointed receivers of Castel back in January 2018. Bellamy retired from the appointment in 2019 when he left Jirsch to start RRI Advisory.
The pair were appointed pursuant to trade and debtor finance agreements Castel’s directors entered into with 1st Cash Pty Ltd, which trades as Thorn Australia Pty Ltd.
iNO’s mail is that while only Howell and Bellamy have so far been served the dividend 1st Cash received is also in FEG’s sights.
And if the defendants don’t settle and the proceedings are resolved in FEG’s favour then interest as well as costs will be sought.
With Treasurer Chalmers eager to be out from underneath a $1 trillion wrecking ball he’ll be happy for FEG to go for whatever it can get.
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