ASIC fails to nail liquidator who was “too trusting”

Queensland liquidator Jason Bettles might have been naive but he was never complicit. That’s the conclusion of Federal Court judge Brigitte Markovic who in delivering judgment in Australian Securities and Investments Commission v Bettles [2023] FCA 975 has written another chapter in the burgeoning Apocrypha of failed litigation commenced by the corporate regulator.

“A review of his evidence and the way in which he interacted with the director of, and advisors to, MA Group companies suggested a level of naivety on Mr Bettles’ part and a complete lack of scepticism. Mr Bettles was too trusting.” Justice Brigitte Markovic.

Her honour’s judgement, which was made public last Friday, comprises 888 paragraphs. In almost none of them does she identify a reason to criticise Bettles, whose name has been under a cloud since ASIC first initiated proceedings in the Federal Court in November 2019 seeking a judicial inquiry into the Worrells Gold Coast Principal’s conduct in respect of the MA Group of Companies (MA Group).

In dismissing ASIC’s case and ordering the regulator to pay Bettles’ costs, Justice Markovic found time to compliment Bettles for being an agreeable witness, saying he was cooperative during his cross examination and did his best to assist the Court, providing frank answers and concessions where appropriate.

“Overall Mr Bettles struck me as someone who endeavoured to do his best both professionally and in assisting the Court,” the judge said.

Only on rare occasions does the judge find fault, at one point positing the potential likelihood that such preparedness to assist could be exploited by the unscrupulous.

“As is clear from Mr Bettles’ evidence he has many years’ experience as an insolvency practitioner and registered liquidator. That said, my impression was that he had not had significant experience in large group insolvencies,” the judge said.

“A review of his evidence and the way in which he interacted with the director of, and advisors to, MA Group companies suggested a level of naivety on Mr Bettles’ part and a complete lack of scepticism,” she said.

“Mr Bettles was too trusting. While it is not my role to speculate, it was perhaps these qualities that ultimately caused Mr Bettles to manage the liquidations as he did.”

And why the referrers chose him?

In a statement issued following publication of her honour’s reasons Bettles expressed his relief, “saying it marked the end of what had been an emotionally taxing period for himself and his family”.

“I am grateful for the unwavering support of my wife and children, Worrells Queensland, and my referral community, who have supported me at every stage of these proceedings,” he said.

In a media release published on its website ASIC chose not to acknowledge responsibility for the failed litigation or its consequences.

Deputy Chair Sarah Court said ASIC took on the case as part of its work with the Serious Financial Crime Taskforce and that the matter hadn’t necessarily ended.

“Taking action against suspected phoenixing remains a key priority of the Taskforce and we will carefully review the judgment,” she said, foreshadowing the possibility of an appeal.

Foreshadowing works both ways of course and in his statement Bettles said that his legal advisors Norton Rose Fullbright would consider seeking their client’s costs on an indemnity basis.

Those costs will include the deferred costs imposed on ASIC in May 2021 after Bettles successfully applied to have ASIC’s concise statement and supplementary concise statement struck out and orders made requiring ASIC to plead its case by statement of claim.

ASIC has 28 days to lodge its notice of intention to appeal and the parties were invited to file submissions in respect of costs by September 15.

Further reading:

Worrells Partner Wins Round One In ASIC Phoenix Fight

Worrells Partner Seeks To Strike Out Phoenixing Case

Worrells Partner Allegedly Facilitated Phoenix