Former George Town councillor Graeme Neilsen's request to set aside a bankruptcy notice has been dismissed by the Federal Court in Hobart.
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Justice Susie Stone ruled in favour of the respondent George Town Council stating the bankruptcy notice will be upheld in addition to Mr Nielsen having to pay the lawyers' cost from proceedings on Monday.
The bankruptcy filing relates to a previous incident where Mr Nielsen challenged the George Town Council regarding a car park planning matter, where he alleged the council submitted a "false plan" that differed from the plan that was approved in 2007 by councillors.
Mr Nielsen alleged a second plan was drawn up that was unknown to councillors that "obliterated the approved plan".
"The council has been in disarray," Mr Nielsen said.
When Mr Nielsen took this matter to the Resource Management and Planning Appeal Tribunal in 2014 it ruled in favour of the council leaving Mr Neilsen owing around $60,000 in legal costs.
Mr Neilsen defended himself against the bankruptcy notice.
"I cannot afford a solicitor. What I can do is stand in front of you and tell the truth," Mr Neilsen said.
Mr Neilsen argued there were errors in the serving of the notice, including miscalculations of the taxable amount, the fact it was served outside the six month validity period and the misspelling of his surname on a document, and that he had been denied natural justice because a hearing he missed due to health reasons was never rescheduled.
"That chain of events that led to me receiving a bankruptcy notice is challengeable and so I am challenging it," Mr Nielsen said.
"We're here five years later on with error upon error upon error, none of them my making."
Mr Nielsen said he ideally wanted to resolve the matter through mediation with the council.
Lawyer Catherine Scott, representing the George Town Council, said there was insufficient evidence of Mr Nielsen's claims of a "fake plan" and that, although there were some errors in the serving of the bankruptcy notice, it was still valid.
Justice Stone ruled she was not satisfied with Mr Nielsen's grounds for having the bankruptcy notice dismissed and there was insufficient grounds for a go behind of the RMPAT's decision.
Upon being given the ruling, Mr Nielsen said the court assigning a cost order for the proceedings was a "fruitless exercise on the grounds it is apparent I can't afford it".
"My life and family are $40,000 poorer from gaining solicitors," Mr Nielsen said.
"I will wear it as a badge of honour I did my best for George Town."