Explainer: why has Rod Culleton been disqualified from the Senate?

The ongoing legal controversies surrounding Western Australian senator Rod Culleton – described by a Federal Court judge as “something approaching a carnival, if not a circus” – took a new turn on Wednesday. Senate President Stephen Parry made the constitutional step of notifying the WA government of a Senate vacancy due to Culleton’s disqualification following a long saga over his eligibility to sit in the upper house.

Culleton’s disqualification comes after Parry received formal notification of Culleton’s status as an undischarged bankrupt.

Even before the 2016 election results were formally declared, questions were being asked over whether Culleton was actually eligible to be a senator. Since that time, two key constitutional issues have emerged.

The Court of Disputed Returns

The first issue relates to a larceny charge in New South Wales concerning a A$7.50 tow truck key. Culleton was convicted in March 2016. However, the conviction was annulled in August, meaning it “ceases to have effect”.

While Culleton later pleaded guilty at a rehearing in October, no conviction was ultimately recorded.

In November, the Senate referred this conviction’s constitutional impact to the High Court, sitting as the Court of Disputed Returns. The issue is whether Culleton’s election was valid under Section 44(ii) of the Constitution, which provides a person is incapable of being a senator if they have:

… 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.

The larceny conviction falls squarely within this section’s scope. The critical question is whether Culleton had actually been convicted at the time of his election (and was therefore ineligible), given this was subsequently annulled.

The central issue concerns the word “annulment”. If the Court of Disputed Returns holds that the conviction never existed then this issue falls away. If, however, the effect of an annulment is not retrospective then Culleton was never eligible to be elected.

At the conclusion of hearings on December 7 the court reserved its decision. It is not scheduled to sit again until January 30.

There is no guarantee that a decision will be handed down at the next sittings, or before the Senate next meets on February 7. However, the court has previously recognised the public interest in this matter being resolved expeditiously.

Culleton’s bankruptcy proceedings

The second issue concerns bankruptcy proceedings filed against Culleton.

On December 23, 2016, a Federal Court judge ordered that Culleton’s estate be sequestrated (or seized to pay his debts). All proceedings under the order were stayed for 21 days; this stay was due to be lifted on January 13.

Culleton continues to assert he is not bankrupt, and is able to pay his debts. However, the Federal Court judge dismissed this. He noted that, despite assertions made before the court, there was “no material evidence” produced to support these claims. An appeal against the sequestration order was filed on January 11, but no date has yet been set for the appeal hearing.

The effect of a sequestration order is that the debtor becomes a bankrupt. In Culleton’s case, this then enlivens sections 44 and 45 of the Constitution. These provide that an undischarged bankrupt is incapable of sitting as a senator, and their Senate position becomes vacant.

Parry’s statement indicated he has received from the inspector-general in bankruptcy and the Federal Court registry documents recording Culleton’s status as an undischarged bankrupt. The necessary constitutional implication is that Culleton’s Senate position is vacant.

What happens next?

This saga still has some way to go before its conclusion. But it is almost certain that Culleton will not be able to continue as a senator.

Even if he successfully appeals the sequestration order and the Court of Disputed Returns rules in his favour, Culleton still faces further constitutional hurdles. Another creditor’s petition is yet to be heard by the Federal Court, and a stealing charge is listed for trial in Perth in September 2017. These could each result in Culleton being constitutionally precluded from sitting as a senator.

From a constitutional perspective, however, it is critical that the correct grounds for disqualification are established. This will affect how a replacement senator is chosen.

If the Court of Disputed Returns rules that Culleton was never eligible to be elected, then – based on precedent – the most-likely outcome is that the second-listed One Nation candidate from the 2016 election will be declared elected. This happens to be Culleton’s brother-in-law, Peter Georgiou.

If, however, Culleton was initially eligible but is subsequently disqualified as an undischarged bankrupt, then a casual vacancy would arise to be dealt with under Section 15 of the Constitution. In this case, One Nation would recommend a party member to fill the vacancy, and the WA parliament would formally appoint this replacement.

If the WA parliament is not in session – which is a distinct possibility given a state election will be held on March 11 – then the WA governor will make the appointment, which must then be confirmed at the next state parliamentary sittings. One Nation leader Pauline Hanson has already tweeted that she has selected a “great person” as a replacement if a casual vacancy is declared.

Given these possibilities, it would be prudent to wait until both the existing bankruptcy appeal and the Court of Disputed Returns’ decision are finalised before taking any steps to fill the vacancy. This is far from ideal given both the close numbers in the Senate and that WA will be under-represented in the “states’ house” for as long as the position remains unfilled.

However, the removal of a senator who was duly elected by the people only six months ago is not something to be done lightly. And it is certainly not something to be done on anything other than conclusively determined constitutional grounds.