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Tuesday, 7 February 2017
Page: 2


The PRESIDENT (12:32): I wish to inform you that on the 7 November 2016 the Senate referred to the Court of Disputed Returns questions about the eligibility of Rodney Norman Culleton to sit as a senator. The court delivered its judgment in the matter on Friday, 3 February 2017. Today, I have tabled a copy of the order made by the Court and a copy of its reasons for judgment. To quote the judgment summary published by the Court:

…the High Court unanimously held that Rodney Norman Culleton was a person who was convicted and subject to be sentenced for an offence punishable by imprisonment for one year or longer at the time of the 2016 federal election, and therefore was incapable of being chosen as a Senator under s 44(ii) of the Constitution.

…   …   …

The subsequent annulment of that conviction had no effect on that state of affairs.

The court ordered that the resulting vacancy in the representation of Western Australia be filled by way of a special count of the ballot papers. I will inform the Senate of the outcome of that process in due course.

While the matter referred by the Senate was on foot, Mr Culleton became subject to disqualification under sections 44 and 45 of the Constitution. In a proceeding in the Federal Court under the Bankruptcy Act 1966, Balwyn Nominees Pty Ltd v Culleton [2016] FCA 1578, a sequestration order was made against the estate of Rodney Norman Culleton on 23 December 2016. The same bankruptcy was entered on the National Personal Insolvency Index on that same day. The court ordered a stay of proceedings under the sequestration order for a period of 21 days, which was later extended, which had the effect of pausing and restraining certain proceedings under the Bankruptcy Act. However, such a stay does not prevent the order itself operating.

Section 44 (iii) of the Constitution provides that a person who:

… is an undischarged bankrupt or insolvent …

…   …   …

shall be incapable of being chosen or of sitting as a senator …

Section 45 provides that if a senator becomes subject to such disability, that senator or member's place shall thereupon become vacant. This does not depend upon any decision of the Senate or of myself as the President. It is a necessary and automatic consequence of the declaration that a serving senator is an undischarged bankrupt, that his or her place as a senator becomes vacant.

This was later confirmed in the Federal Court judgment handed down on 3 February 2017, dismissing Mr Culleton's appeal in the bankruptcy matter, which records:

The prima facie effect of the order of the Court on 23 December 2016 was to cause the vacation of his office as a Senator for Western Australia …

I received documentation from the Inspector-General in Bankruptcy on 10 January this year and from the Federal Court Registry the following day, which recorded the status of Rodney Norman Culleton as an undischarged bankrupt. On 11 January, having received that advice, I therefore notified the Governor of Western Australia, Her Excellency the Hon. Kerry Sanderson AC, that there was a vacancy in the representation of that state as a consequence of the disqualification of Senator Culleton. I also informed Her Excellency that the method for filling that vacancy depended on the matter then before the Court of Disputed Returns. Those documents were presented to the Senate out of session on 12 January.

Mr Culleton sought, by several means, to avoid the consequences of his bankruptcy. He wrote to me on 4 January 2017 asking that I recall the Senate to resolve his status as a senator. I made a statement on 9 January outlining my response, noting that I was not empowered to recall the Senate in such circumstances and that, in any case, the Constitution did not give the Senate discretion to disregard a disqualifying event such as the bankruptcy of one its members.

Mr Culleton, through his lawyers, later served a summons upon me and upon the Attorney-General, seeking, among other things, orders restraining me from taking steps to remove him from the Senate consequent upon his becoming bankrupt. That summons was dismissed in the High Court on 31 January past. While the Federal Court rejected Mr Culleton's appeal on the bankruptcy matter on 3 February also, the bankruptcy disqualification is somewhat academic given the judgement of the Court of Disputed Returns.

I have been asked two questions, in particular, about the consequences of Mr Culleton sitting in the Senate despite being ineligible to do so. The first is what effect his disqualification has on Senate proceedings in which he took part and the second is whether Mr Culleton will be required to repay any salary or allowances paid to him as a senator. On the first matter, Odgers' Australian Senate Practice notes:

The presence in the Senate of a senator found not to have been validly elected or to be disqualified does not invalidate the proceedings of the Senate in which the senator participated …

If you wish to read it, you will find that on page 174 of the new edition. This matter was determined by the High Court in the 1907 case Vardon v O'Loghlin (1907) 5 Commonwealth Law Report201, per Griffiths Chief Justice, at 208, and restated by the court in the 1988 case involving Robert Wood, 167 Commonwealth Law Report.

On the second matter I am advised that in previous cases opinions were provided by attorneys-general that those whose elections were declared void were not entitled to retain salary payments made to them. Currently the Remuneration Tribunal Act 1973 provides for the payment of salaries to senators. Under section 16A of that act any such benefit paid without authority becomes a debt due to the Commonwealth. In earlier cases such debts have in effect been waived. However, I am advised that the decision whether to waive such debts is a decision for the government and not the Senate. I have written to the finance minister seeking further advice on this matter.

For the information of senators I have tabled, with the usual start of day documents, each of the statements I made on this matter in January, together with the published reasons for each of the judgements I have referred to. I thank senators for bearing with me on that long statement.