Worrells principal Jason Bettles offered to agree to a suspension of his liquidator’s registration as part of a counter offer made more than 12 months before his four year legal battle with ASIC ended in August when the regulator’s case was dismissed and it was ordered to pay Bettles’ costs.
As part of those costs orders, Federal Court judge Brigitte Markovic granted leave to the parties to apply to vary the orders and Bettles did so, arguing that the regulator should pay his costs from May 28, 2022 on the indemnity basis.
” … without a sufficient factual foundation to justify ordering that Mr Bettles’ registration be suspended, and the resulting difficulties in the Court’s sanctioning resolution of the proceeding in accordance with the 26 May 2022 Offer, it should not be considered a genuine attempt at compromising the proceeding nor was it capable of being accepted on its terms by ASIC.” Justice Brigitte Markovic.
In Australian Securities and Investments Commission v Bettles [2023] FCA 1442 Justice Markovic yesterday dismissed that indemnity application and in delivering judgment revealed details of a settlement duel fought in mid-2022 that saw Bettles offer to accept an 18 month suspension of his registration and contribute $350,000 to ASIC’s costs on the basis that he be required to make no admissions of liability and that ASIC abandon its pursuit.
In a statement to iNO yesterday Bettles said he would not appeal.
“With respect to the financial costs of my four-year legal case, I would describe them as ‘material’,” Bettles said.
“Today’s judgement marks the legal end of what has been a complex and lengthy court proceeding, which cleared me and vindicated the position that I took – that ASIC did not have a case against me.
“I respect the important role played by ASIC as our corporate regulator and can now put this matter firmly behind me and focus my professional attention on supporting Australian businesses, creditors and individuals through financial adversity.”
ASIC commenced the civil penalty proceedings in the Federal Court in November 2019, seeking orders that Bettles be stripped of his registration and banned for life.
The regulator’s case was based on its belief that Bettles had helped the directors of the Members Alliance and Benchmark corporate groups facilitate the illegal phoenixing of assets during his tenure as liquidator of the group entities from 22 July 2016 until ASIC pressured him to relinquish the appointments in July 2017, at which time he was replaced by Grant Thornton partner Michael McCann.
In dismissing ASIC’s case in August Justice Markovic said Bettles may have been too trusting but that was a far cry from accepting the inferences of complicity that ASIC had urged her to make.
Bettles’ settlement offer was made in May 2022 in response to ASIC’s own compromise, which if accepted would have seen Bettles admit to certain allegations in the regulators pleadings, agree to cancellation of his liquidator’s registration, a five year ban from reapplying, contribute $500,000 for ASIC’s costs and relinquish existing costs orders in his favour in respect of a successful strike out application.
The ASIC offer came in a letter dated May 18, 2022 from its lawyers Colin Biggers & Paisley to Bettles’ legal representatives from Norton Rose Fullbright.
ASIC rejected Bettles response, clearing the way for his application for indemnity costs.
But Justice Markovic found that simply rejecting an offer that turned out to be better than the outcome the application was left with at the conclusion of the trial didn’t automatically render the applicant liable for indemnity costs, particularly in circumstances where a statutory authority is pursuing matters it believes have a public interest justification.
More significantly, her honour agreed with ASIC’s submissions in opposition to an order for indemnity costs that Bettles’ offer to accept an 18 month suspension without making any admissions as to conduct made it impossible for ASIC to accept.
” … without a sufficient factual foundation to justify ordering that Mr Bettles’ registration be suspended, and the resulting difficulties in the Court’s sanctioning resolution of the proceeding in accordance with the 26 May 2022 Offer, it should not be considered a genuine attempt at compromising the proceeding nor was it capable of being accepted on its terms by ASIC,” the judge said.
“ASIC sought orders pursuant to s 45-1 of the IPS which empowers the Court to make such orders as it thinks fit in relation to a registered liquidator.
“That is, as ASIC submits, it is for the Court to determine the appropriate sanction, not the parties.
“The most the parties can do is to jointly propose to the Court the orders that they recommend should be made. The Court then must satisfy itself that those orders are appropriate having regard to the agreed facts,” she said.
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