Insolvent lawyer Beau Hartnett retains directorships while law practising certificate on hold

A disgraced Gold Coast lawyer - who was listed as a director of five companies while insolvent - has been allowed to keep practising law, despite his certificate being on hold.

A disgraced Gold Coast lawyer - who was listed as a director of five companies while insolvent - has been allowed to keep practising law, despite his certificate being on hold.

Beau Timothy John Hartnett, 58 “exorbitantly” charged an elderly client $288,000 to enforce a $30,000 mortgage and then spent almost a decade in court trying to avoid repaying the money.

When he’d exhausted his appeals, he claimed he was broke and couldn’t pay, entering a personal insolvency agreement but avoiding bankruptcy.

National Personal Insolvency Index records show Mr Hartnett remained subject to a “Part X” personal insolvency agreement on Tuesday and was also listed as a director of five companies – two as sole director.

After the Gold Coast Bulletin queried Mr Hartnett and ASIC about the directorships, ASIC’s records were adjusted.

Company extracts taken on Tuesday this week list him as a director of the companies in the morning. By that afternoon the records said his directorship had ceased on April 23.

In June the Australian Financial Security Authority (AFSA) said Inspector-General in Bankruptcy Timothy Beresford would investigate “circumstances surrounding the personal insolvency” of Mr Hartnett.

Under the Corporations Act, a person is automatically disqualified from managing corporations if they are subject to a Part X arrangement – an offence publishable by five years jail and a fine of $187,800.

However, just being a director is not an offence in itself, if the insolvent person is not actively involved in the management of companies.

Gold Coast solicitor Beau Hartnett.

Suzanne Weel.

Mr Hartnett vacated director roles for nine other companies in the weeks before he signed the insolvency agreement, and transferred shares to his wife Suzanne Weel in forms lodged the day before.

Ms Weel has never been accused of any wrongdoing.

An email from Ms Weel from a Hartnett Lawyers address, which began “we act for Mr Beau Hartnett”, said creditors received their final dividend on June 4.

“The trustees issued Mr Hartnett a certificate advising that the (Personal Insolvency Agreement) has now been completed,” Ms Weel said.

“Mr Hartnett automatically ceased to be a director, alternate director, or secretary of a company under the Corporations Act 2001 whilst subject to the terms of a personal insolvency agreement. This restriction was lifted when the agreement ended.”

Ms Weel did not answer a question on who was managing the companies that listed Mr Hartnett as sole director, if it wasn’t him.

The National Personal Insolvency Index still listed Mr Hartnett’s insolvency as current on Wednesday.

Bankruptcy trustee Adam Kersey of SV Partners confirmed Mr Hartnett had fulfilled the terms of his insolvency agreement - which left creditors with a fraction of what they were originally owed.

He said the trustees had been unable to complete the administration due to AFSA’s review.

ASIC said it was up to individuals to ensure they don’t manage companies while disqualified.

“ASIC expects anyone who is automatically disqualified from managing companies to resign their appointments as director and abide by the prohibition,” the regulator said.

“ASIC will consider action if we have sufficient evidence of an individual managing companies while disqualified from doing so, which is a criminal offence.”

Insolvency documents obtained by the Gold Coast Bulletin showed Anthony Robert Bell, who was owed $584,589 by Mr Hartnett, would see less than three cents for every dollar despite the latter living in a $3.25m mansion with $9.5m in declared interests in trusts.

Beau Hartnett.

Under Queensland’s Legal Profession Act, personal insolvency is considered a “show cause event”, and lawyers have 28 days to explain why they should retain a certificate to practice law. Mr Hartnett’s insolvency arrangement was executed on April 23.

Queensland Law Society President Rebecca Fogerty said Mr Hartnett was “being afforded due process” under the Legal Profession Act.

“QLS hasn’t completed this process and as such, it would not be appropriate to comment further,” she said.

“The solicitor hasn’t had his practising certificate renewed, it is on hold, pending the above determination.”

Ms Fogarty said a solicitor was entitled to practice on their current practising certificate until a determination was made.

AFSA said its investigation into the insolvency was ongoing.

Originally published as Insolvent lawyer Beau Hartnett retains directorships while law practising certificate on hold