Culleton v Balwyn Nominees Pty Ltd

Link copied
Case Copied 43 min read

FEDERAL COURT OF AUSTRALIA

Culleton v Balwyn Nominees Pty Ltd [2018] FCA 313

File number: WAD 549 of 2017
Judge: BESANKO J
Date of judgment: 14 March 2018
Catchwords:

BANKRUPTCY AND INSOLVENCY – whether a sequestration order should not have been made against the applicant’s estate – whether an order ought to be made setting aside or annulling a sequestration order against the applicant’s estate

CONSTITUTIONAL LAW – whether the applicant’s place as a Senator for the State of Western Australia should not have been declared vacant – where the Court does not have jurisdiction to make findings or orders in relation to proceedings in the Senate

PRIVILEGE – whether matters are justiciable having regard to s 16 of the Parliamentary Privileges Act 1987 (Cth)

PRACTICE AND PROCEDURE – whether the applicant’s application ought to be dismissed pursuant to r 26.01 of the Federal Court Rules 2011 (Cth) and s 31A of the Federal Court of Australia Act 1976 (Cth) – whether the applicant’s application ought to be permanently stayed – where there are no reasonable prospects of success

PRACTICE AND PROCEDURE – where no power to order that an appeal be heard by the Supreme Court of Western Australia – where no power to refer any matter to the Senate or to order that a Senator stand aside – where no power to make orders either as to subpoenas or costs in the reference proceeding – where no basis for orders sought

COSTS –the first respondent’s costs of the application dated 1 November 2017, including the costs of the interlocutory application dated 27 November 2017 to be paid in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth)
Legislation:

Constitution ss 44, 47

Bankruptcy Act 1966 (Cth) ss 7, 27, 37, 47, 54, 109, 153B

Commonwealth Electoral Act 1918 (Cth) s 376

Federal Court of Australia Act 1976 (Cth) s 31A

Parliamentary Privileges Act 1987 (Cth) s 16

Federal Court Rules 2011 (Cth) rr 26.01, 39.05

Federal Court (Bankruptcy) Rules 2016 (Cth) rr 4.05, 4.06, 7.02

Cases cited:

Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd and Others (1999) 95 FCR 292

Balwyn Nominees Pty Ltd v Culleton [2016] FCA 1578

Bulic v Commonwealth Bank of Australia Limited [2007] FCA 307; (2007) 5 ABC(NS) 122

Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; (2017) 343 ALR 632

Horvath v Pattison [1999] FCA 924

Leeth v Commonwealth of Australia (1992) 174 CLR 455

Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 345 ALR 534

Re Culleton [2016] FCA 1193

Re Culleton [2017] HCA 3; (2017) 91 ALJR 302

Re Culleton [No 2] [2017] HCA 4; (2017) 91 ALJR 311

Rigg v Baker (2006) 155 FCR 531

Spencer v Commonwealth of Australia (2010) 241 CLR 118

Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332

Walton v Gardiner (1993) 177 CLR 378

Wren v Mahony (1972) 126 CLR 212

Date of hearing: 19 December 2017
Registry:
CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Culleton v Balwyn Nominees Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2018] FCA 313
Decision Date

CaseChat Overview and Summary

The case of Culleton v Balwyn Nominees Pty Ltd involved the applicant, a Senator for the State of Western Australia, challenging the validity of a sequestration order made against his estate. The order was issued following a creditor’s petition by Balwyn Nominees Pty Ltd, based on a final judgment for an amount of $271,134.26. The primary judge, in a decision that was upheld by the Full Court of the Federal Court, found that the applicant had committed an act of bankruptcy by being an undischarged bankrupt and, accordingly, made an order for the sequestration of the applicant’s estate.

The court was required to decide several key legal issues. These included whether the sequestration order should not have been made against the applicant’s estate, whether the order should be set aside or annulled, and whether the applicant’s position as a Senator should be declared vacant. The court also needed to determine if it had jurisdiction to make findings or orders in relation to proceedings in the Senate, whether the matters were justiciable under the Parliamentary Privileges Act 1987 (Cth), and if the application should be dismissed or permanently stayed due to lack of reasonable prospects of success.

The court concluded that the sequestration order was validly made and that there were no grounds to set it aside or annul it. It held that it did not have the jurisdiction to make findings or orders regarding proceedings in the Senate or to declare the applicant's position as a Senator vacant. The court further found that the matters were not justiciable due to parliamentary privilege, and that the application was an abuse of process with no reasonable prospects of success. Consequently, the court dismissed the application and ordered that the costs of the application be paid by the applicant's estate.

Orders

Orders of the court

1. There be judgment for the respondents against the applicant.

2. The first respondent’s costs of the application dated 1 November 2017, including the costs of the interlocutory application dated 27 November 2017, be paid from the estate of the applicant bankrupt in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).

3. The parties be heard as to the second respondent’s costs of the application dated 1 November 2017, including the costs of the interlocutory application dated 27 November 2017.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons which follow, in my opinion, the Application has no reasonable prospect of success or it discloses no reasonable cause of action. In the alternative, substantial parts of the Application are an abuse of process. The respondents are entitled to judgment in their favour. THE FACTS To a significant extent, the facts can be related through decisions of this Court and the High Court. Section 44 of the Constitution relevantly provides as follows:Any person who:…(ii)is attainted of treason, or has been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer; or(iii) is an undischarged bankrupt or insolvent; or…shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives. On 19 October 2016, Balwyn filed a creditor’s petition under the Bankruptcy Act 1966 (Cth) seeking a sequestration order against the applicant’s estate. The petition was founded on a final judgment of the District Court of Western Australia for an amount of $271,134.26 dated 24 October 2013 and was preceded by a bankruptcy notice. The judgment was entered by the District Court after a 10 day trial at which the applicant and Mrs Ionna Culleton were represented by solicitors and counsel. The creditor’s petition came on for hearing before Barker J of this Court on 19 December 2016. At the time of that hearing, the applicant was a Senator for Western Australia in the Commonwealth Parliament. A summary of the events between the filing of the creditor’s petition on 19 October 2016 and the making of the sequestration order on 23 December 2016 is set out in the reasons for judgment of the Full Court of this Court in Culleton v Balwyn Nominees Pty Ltd [2017] FCAFC 8; (2017) 343 ALR 632 (Full Court Bankruptcy Proceeding) at [3]-[30] and I will not repeat what is set out in those reasons. There is a shorter summary in the reasons of the judge at first instance (Balwyn Nominees Pty Ltd v Culleton [2016] FCA 1578 (Single Judge Bankruptcy Proceeding) at [14]-[18]). At the hearing before the primary judge on 19 December 2016, the applicant applied for an adjournment of the hearing, but that application was refused. He also made an application that there be a trial by jury, but that application was also refused. Others matters were then argued, including whether the applicant had been served with the bankruptcy notice, the creditor’s petition and related documents. The applicant argued that the judgment of the District Court was flawed, but the primary judge rejected that argument. Further arguments raised by the applicant are dealt with by the primary judge in his reasons at [129]-[160]. The primary judge also addressed the question of whether the applicant had demonstrated his solvency. He concluded that the applicant had not done so. In the result, the primary judge concluded that the applicant had committed the act of bankruptcy alleged in the creditor’s petition and he noted that the date of the act of bankruptcy was 30 August 2016. He concluded that none of the various grounds of objection of the applicant (respondent debtor) had been made out. He was satisfied that the matters in s 52(1) of the Bankruptcy Act had been established. He made an order that the estate of the applicant be sequestrated under the Bankruptcy Act. His Honour stayed all proceedings under the sequestration order for a period of 21 days.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

These conclusions apply, not only to the orders sought in the originating application, but also to the November 2017 orders and the December 2017 orders. Insofar as those orders raise new matters or matters I have not addressed, I make the following comments: With respect to the November 2017 orders, I have no power to order that an appeal be heard by the Supreme Court of Western Australia and, in any event, there is no basis for such an order (paragraph 7). With respect to the December 2017 orders, I have no power to refer any matter to the Senate or to order that a Senator stand aside or to make orders either as to subpoenas or costs in the reference proceeding and, in any event, there is no basis for such orders (paragraphs 3, 4, 6 and 7).CONCLUSION None of the claims or arguments of the applicant have any prospects of success and the pursuit of many of the claims is quite clearly an abuse of process. Judgment will be entered in favour of the respondents against the applicant. I order that the Balwyn’s costs of the application dated 1 November 2017, including the costs of the interlocutory application dated 27 November 2017, be paid from the estate of the applicant bankrupt in accordance with s 109(1)(a) of the Bankruptcy Act. I will also order that the parties be heard as to the Commonwealth’s costs of the application dated 1 November 2017, including the costs of the interlocutory application dated 27 November 2017.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.