FEG’s cunning Condev plan foiled

Worrells’ Jason Bettles and James Robba won big time yesterday, with a court declaring an assault brought against them by FEG should fail utterly and that FEG should bear their costs of the attritional litigation, which represented another effort by the Commonwealth to make Section 561 its own.

“The priority unsecured creditor has no right to be paid in priority from any circulating assets that are not the subject of the secured creditor’s claim.” Judge Tom Bradley.

In Condev Construction Pty Ltd (in liquidation), Re [2025] QSC 173 Supreme Court of Queensland judge Tom Bradley rejected FEG’s claim that as liquidators of Condev Construction Pty Ltd (Condev) Bettles and Robba were required to distribute property of Condev comprised in or subject to a circulating security interest of Westpac in accordance with s 561 of the Corporations Act, and that Westpac had no right to exercise or assert set-off pursuant to s 553C of the Act or at general law in respect of the debts owing by Westpac to Condev.

FEG commenced its proceedings in April 2023, two months after Bettles and Robba applied for judicial advice confirming that they’d be justified in not causing Condev to pursue Westpac to recover certain debts Westpac owed to Condev immediately before the commencement of the winding up.

The liquidators also sought guidance on their decision to not treat money paid to Condev by Westpac since the commencement of the winding up as property comprised in or subject to a circulating security interest of Westpac as at the commencement of the winding up.

Having paid out $1,914,343.13 to former employees in respect of entitlements afforded priority under s 556(1)(e), (g), and (h) of the Act, FEG intervened, seeking orders that the liquidators and Westpac repay or remit certain funds to Condev so that the declarations it sought could be given practical effect.

Bolstering its claims, FEG asserted that the liquidators ignored section 561 when distributing funds; wrongly allowed Westpac to exercise a right of set-off; improperly deducted their costs and remuneration from circulating assets and committed breaches so serious they warranted personal liability and a judicial inquiry. Judge Bradley rejected the lot.

The liquidators must be relieved, though Bettles might also wonder if there’s a bullseye on his back given the unwarranted persecution he suffered for several years courtesy of ASIC’s failed case against him in the Members Alliance Group matter.

On the bright side, he’s two wins up to the regulators’ nil, though while FEG did not respond to a request for comment on the possibility of an appeal it cannot be ruled out.

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