Court rules Culleton bankrupt

On Sunday night, Senator Culleton announced he’d quit the One Nation party that he was initially elected on at the July 2 poll, after a fall-out with leader Pauline Hanson, ahead of his Monday court hearing over the bankruptcy charges.

The bankruptcy ruling has allowed Senator Culleton 21 days to appeal the court’s decision, which will determine whether he is eligible to remain a federal Senator.

The bankruptcy charges relate to a claim made by former Wesfarmers director Dick Lester for $280,000, over a soured farming property deal.

Senator Culleton said the court had “stayed” the bankruptcy and he now planned to appeal the decision within the 21-day limit.

“This is not over – far from it – but what a bear trap mate,” he said.

Senator Culleton said he told the Judge after the decision was announced, “You’ve just cut my throat your Honour”.

“I didn’t scream at the Judge, I just said ‘you’ve cut my throat and I’m bleeding’,” he said.

“I’m caught in a legal rip but I’m going to float along and not panic and when the time’s right I’ll swim to the side.

“I’m going to appeal – this is only round one.”

Judge Barker’s judgment order said the estate of Rodney Norman Culleton would be sequestrated under the Bankruptcy Act 1966 and also noted that the date of the act of bankruptcy was August 30, 2016.

It also said there would be a stay of all proceedings under the sequestration order for a period of 21 days.

The petitioning creditor’s costs (Mr Lester) - including any reserved costs – were also ordered to be taxed and paid out of Senator Culleton’s estate.

The 40-page judgement rejected Senator Culleton’s claims that he wasn’t insolvent.

“The respondent debtor (Senator Culleton) has repeatedly asserted that he is solvent, that he has demonstrated his solvency – that is to say, that he can pay his debts – and so the Court should dismiss the creditor’s petition,” it said.

“Despite assertions made from the bar table by the respondent debtor, which included assertions that on his oath he was solvent and had the wherewithal to meet the judgment debt the subject of the bankruptcy notice, no material evidence, sufficient to satisfy the Court, has been adduced in that regard.”

The judgement said the only relevant evidence before the Court regarding Senator Culleton’s solvency claim was contained in an affidavit by his Melbourne based solicitor, John Maitland; although the WA politician represented himself, at Monday’s hearing.

That affidavit said substantial payments had been placed into a trust account which the solicitor had been instructed can be used to pay the Senator’s creditors - but the Judge was not satisfied with that claim.

“The respondent debtor, in submissions made from the bar table, also was careful not to specify any amount his solicitor was holding in the trust account, but rather, with a flourish, indicated that he was solvent and could pay the judgment debt,” he said.

“There is no material evidence before the Court to support his assertion.

”Secondly, the statement made by Mr Maitland to the effect that he is instructed the substantial payments “can be used” to pay the respondent debtor’s creditors is far from unambiguous and leaves the impression that those funds do not necessarily have to be used for that purpose.

“Thirdly, it should also be observed that it is not at all clear whether the payments made into the trust account have been made by the respondent debtor or by third parties, and if the latter, the extent to which the respondent debtor exercises control over any of the funds.

“In short, there is a complete lack of clarity and indeed much ambiguity about the nature and amount of funds that have been paid into Mr Maitland’s trust account.

“The respondent debtor has been far from frank about just what funds he has at his disposal.

“There is no other material evidence to suggest that the respondent debtor is able to pay his debts.”

The judgment also rejected claims the issue was somehow linked to Senator Culleton’s “counterclaim” against the ANZ Bank and its purchase of the Landmark loans book which he says impacted his farm valuation and related horse feeding business.

It said Senator Culleton’s December 16, 2016 filed written submission had asserted “The very first thing the court should decide is if these proceedings are politically motivated, given that the Petitioning Creditors Lawyer firm also acts for the ANZ Banking Corporation and ANZ is one of the Banks potentially liable for the huge damages if ever made accountable in the Federal Court of Australia”.

But the Judge said, “It may be said, without flourish and very shortly, that I take the intent of this allegation to be that the petitioning creditor has somehow conspired with ANZ Bank to bring and maintain this particular proceeding concerning the respondent debtor”.

“There is no evidentiary support for this allegation,” he said.

“It appears to be made wildly, very much as a political flourish.

“The allegation is followed…by further statements by the respondent debtor that, as a Senator, he has been “gathering and disseminating evidence against this bank in particular, in an attempt to hold a Banking Royal Commission. It would grant them enormous benefit if I were to be bankrupted and forced to resign from the Senate”.

“There is, as I say, no evidence to support this allegation and I do not consider that there is any evidence at all of the petitioning creditor bringing and maintaining the proceeding in order to achieve some ulterior motive such as that ascribed by the respondent debtor in these submissions.”

Senator Culleton is also anxiously awaiting a High Court ruling following a hearing held in Canberra earlier this month on a matter referred by the Upper House to answer whether he’s entitled to stay in federal parliament and was eligible for election.

Under section 44 of the Australian constitution, any person who is an undischarged bankrupt or insolvent is ineligible for election.

Senator Culleton said his political career wasn’t over as the judgement order had been “stayed” for 21-day and he would appeal.

“I’ve got plenty of options and plenty of arrows in my bag to fire and fight this thing and I’ll be calling on Robin Hood to help me out,” he said.