The Culleton bankruptcy – part 2

In my earlier commentary, I reported that Mr Rodney Norman Culleton had been made bankrupt by the Federal Court on 23 December 2016: Balwyn Nominees v Culleton [2016] FCA 1578.  Mr Culleton has now appealed from that decision, filing a notice of appeal on 11 January 2017, and he has obtained an extension of the stay. And another (misconceived) creditor has had his later bankruptcy petition dismissed.  

Apart from making a sequestration (bankruptcy) order against Mr Culletin on 23 December 2016, Justice Barker had ordered that “there be a stay of all proceedings under the sequestration order for a period of 21 days”.  As I explained, even though a stay is granted, Culleton is still a bankrupt, but the consequences of the Bankruptcy Act do not impact him while the stay is in operation.

In filing his appeal, Mr Culleton also asked for an extension of the existing stay.  Justice Dowsett, the Judge hearing the matter on 12 January 2017, did so, ordering that “all proceedings under the sequestration order of 23 December 2016 … be stayed until 4.00pm on Friday 20 January 2017 or other order”.  The appeal was adjourned to a date on or before 20 January.

It remains therefore that Culleton is still a bankrupt, but the consequences under the Bankruptcy Act do not have legal effect on him while the stay is in operation.

The stay may or may not be continued beyond 20 January when the matter next comes before the court.  This will depend on legal arguments raised, in relation to issues explained in my earlier comments.  Whether the grounds of appeal are ‘arguable’ is an important issue.

Other proceedings

Apart from Mr Culleton’s parliamentary issues – the parliamentary website records him as a “former” Senator “disqualified 11.1.17 under sections 44 and 45 of the Constitution” – the questions referred to the High Court as the Court of Disputed Returns remain to be answered.  The Court remains reserved in its judgment.

The Federal Court records also showed that another creditors petition in bankruptcy, filed by a Francis Peter Bertola on 22 December 2016, was filed. Unless it was in respect of a debt that post-dated the 22 December 2016 bankruptcy (which was most likely), it would be invalid.

Nevertheless, the Court listed it for hearing on 16 January 2017 – WAD591/2016.  Sure enough, it was dismissed, with Mr Bertola ordered to pay Mr Culleton’s costs, if any. He can lodge his claim in the existing bankruptycy instead.

So, Mr Culleton is bankrupt, he is not a member of parliament, and his next opportunity to reverse this is on 20 January 2017.

Stay tuned.

No legal advice is given in this commentary, nor can it be relied upon as a statement of the law. In fact that is the case with most of my writings…..