Inspector-General in Bankruptcy claims Beau Hartnett’s insolvency trustees disregarded legal advice

Scathing court documents allege trustees for a disgraced Gold Coast lawyer did not properly probe “very suspicious” creditor claims which enabled him to avoid paying his hefty debts. Read the details

Scathing court documents allege trustees for a disgraced Gold Coast lawyer did not scrutinise “very suspicious” creditor claims which helped him avoid paying his hefty debts.

A three-day Federal Court hearing has been scheduled to examine allegations about how Beau Hartnett, 58, was able to declare he was broke and avoid paying hundreds of thousands to creditors while maintaining a millionaire lifestyle.

Beau Hartnett repeatedly invoiced a client after she died.

Creditors including elderly Lismore man Anthony Robert Bell, owed $584,589 by Mr Hartnett, would see less than three cents for every dollar under what the inspector-general alleges is an “unreasonable” personal insolvency agreement, despite the latter living in a $3.25m mansion.

The agreement was passed by a majority of creditors, the largest of which was a trust held by Mr Hartnett’s wife Suzanne Weel. She became sole shareholder the day before her husband declared insolvency.

An investigation by the Inspector-General in Bankruptcy Timothy Beresford, sparked after Gold Coast Bulletin questions, prompted Federal Court action against Mr Hartnett, as well as his insolvency trustees, Anne Meagher and Adam Kersey of SV Partners.

SV Partners director Anne Meagher. Photo: Supplied.

Adam Kersey of SV Partners

Mr Beresford’s statement of claim, lodged with the court, asks for the agreement to be set aside, saying the trustees should have given greater scrutiny to three minor creditors before allowing them to vote on it.

The motion would not have passed without those creditors.

For a personal insolvency agreement to be accepted, more than 50 per cent of creditors by number – and at least 75 per cent in debt value – must vote in favour.

The statement of claim said the trustees’ own lawyer warned the claims of three minor creditors were “very suspicious and require scrutinising as they will be received by others as being solely a ploy to get the (over) 50 per cent number majority”.

Mr Hartnett’s declared debts included $3.7 million to Hartnett Service Trust; $585,899 to Anthony Robert Bell; and $143,913 to Arawak Holdings, directed by Gold Coast developer Craig Perry.

Minor creditor claims included $1628 from Walsh Accountants, which had worked for Mr Hartnett and his companies since 2012; a $1500 claim from MPB Investments, which is directed by Brett Gardiner; and a $550 claim by the McCallum-Henry Family Trust, which operates HHH Earthworks at Clagiraba.

Only Mr Bell and Arawak Holdings voted against the personal insolvency agreement, which left creditors with 2.9 cents for every dollar owed.

Inspector-General in Bankruptcy Timothy Beresford.

In his advice to SV Partners before the vote, outlined in the statement of claim, lawyer Dan Ryan questioned the inclusion of the debt for McCallum-Henry - owed for work on the Hartnett family’s Surfers Paradise home – when Mr Hartnett claimed he didn’t own the property.

He also queried why the invoice for the work had only been generated the day before it was presented to trustees, when it was purportedly for work done three months earlier.

Mr Hartnett’s $550 debt to MPB Investments was for a valuation of the same home, the court documents said.

The claim said the trustees did not undertake the inquiries recommended by their lawyer to confirm the veracity of those creditors’ claims before admitting them to vote.

It said the creditors who voted in favour all did so via proxy forms provided by Mr Hartnett to SV Partners and that they all appeared to have been filled out by Mr Hartnett, or someone working for him.

“The circumstances ought to have alerted the Controlling Trustees to scrutinise carefully the legitimacy of the claims made by those creditors,” the statement of claim said.

“The Controlling Trustees did not fully investigate the debts claimed by the Minor Creditors.”

The Inspector-General’s claim said the vote would not have passed if the trustees had not allowed the Hartnett debt to be included or if two or more of the creditors had not been permitted to vote.

The pool of the Hartnett waterfront home at Surfers Paradise.

The property is worth more than $3m.

The claim also said they also did not properly investigate the ownership of the Surfers Paradise home – or of another property in the King Tide building on Old Burleigh Rd – and that they had failed to investigate the possibility Mr Hartnett had access to funds not declared in his statement.

Neither Mr Hartnett, nor either of the trustees, had lodged a defence to the claim this week.

The hearing has been set down for three days from January 28, 2025.

Originally published as Inspector-General in Bankruptcy claims Beau Hartnett’s insolvency trustees disregarded legal advice