Moi's approach is a little bit strange to other 3D software

 From:  Michael Gibson
10154.12 In reply to 10154.1 
Hi Jack, the filleter in the geometry library that MoI uses does not like it if you have planes fragmented into separate faces. If you clean up the model so that coplanar areas are made up of just one large plane instead of multiple fragments then it should work.

So for your case here the easiest way to do it is to select these faces:


Delete them:


Also do the same to these ones on the bottom:


Then select the whole object and run Construct > Planar - that will fill in planar holes with one large trimmed plane and join them in.

After that you can then fillet that edge ok:




- Michael