Kailash Lawyers Pty Ltd v Patial [2025] FedCFamC2G 1432
File number(s):
SYG 2899 of 2024
Judgment of:
JUDGE OBRADOVIC
Date of judgment:
5 September 2025
Catchwords:
BANKRUPTCY – Service of Bankruptcy Notice – Whether Creditor’s Petition is defective – Claims of procedural and evidential irregularities and deficiencies – Assertion of counter-claim, set-off, or cross demand
INTERIM APPLICATION – Seeking extension of compliance with Bankruptcy Notice – Seeking of stay pending other proceedings and applications
Amended pursuant to r 24.04 of the Federal Circuit and Family Court of Australia (Division2) General Federal Law Rules) 2025 (Cth) on 8 September 2025.
THE COURT ORDERS THAT:
1.The Interim Application filed 15 April 2025 is dismissed.
2.The estate of PratreekPrateek Patial be sequestrated under the Bankruptcy Act 1966 (Cth).
3.The applicant creditor notify the Official Receiver of this order within 2 business days.
4.The applicant creditor’s costs be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).
THE COURT NOTES THAT:
A.The date of the act of bankruptcy was 9 October 2024.
Note: The form of the order is subject…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Kailash Lawyers Pty Ltd v Patial [2025] FedCFamC2G 1432
Case
[2025] FedCFamC2G 1432
Decision Date
CaseChat Overview and Summary
In the Federal Circuit and Family Court of Australia, the case of Kailash Lawyers Pty Ltd v Patial involved a creditor's petition seeking a sequestration order against the debtor, Mr Patial. Kailash Lawyers, the creditor, alleged that Mr Patial had failed to comply with a Bankruptcy Notice and sought a declaration that Mr Patial was bankrupt. Mr Patial, in response, raised various procedural and evidential challenges to the sufficiency of the Bankruptcy Notice and the creditor's petition. He also sought an extension of time to comply with the Bankruptcy Notice and a stay of the proceedings pending other litigation.
The primary legal issues the Court had to decide included whether the Bankruptcy Notice was properly served and whether the creditor's petition was defective due to alleged procedural and evidential irregularities. Additionally, Mr Patial argued for the recognition of counter-claims, set-offs, or cross-demands that might negate the debt claimed by Kailash Lawyers. The Court also needed to consider Mr Patial's applications for an extension of time to comply with the Bankruptcy Notice and for a stay of the proceedings.
The Court found that Kailash Lawyers had complied with the statutory and procedural requirements for serving the Bankruptcy Notice and that the creditor's petition was valid. It dismissed Mr Patial's claims of procedural and evidential irregularities, noting that they were either misconceived or unsupported by the evidence. The Court concluded that there was no sufficient cause to refuse the sequestration order, and it made a sequestration order against Mr Patial's estate. Furthermore, the applications for an extension of time and a stay of proceedings were also dismissed.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
The exhibits in the proceedings were:·Exhibit 1 being document entitled “Sequence for today’s hearing” dated 26 May 2025 handed up to the court at 10:19am on 26 May 2025.·Exhibit 2 being Annexure AP-1 of the Affidavit of Amit Pall dated 14 February 2025.·Exhibit 3 being Annexure GS-1 of the Affidavit of Gaurav Sareen dated 21 March 2025 and filed 24 March 2025.·Exhibit 4 being an email dated 2 May 2025 from Mr Sareen to Mr Patial, and the reply from Mr Patrial dated 5 May 2025 located at pages 637-639 of the Court Book.·Exhibit 5 being an email in relation to service of the written submissions dated 14 May 2025.·Exhibit 6 being searches for “Kailash Lawyers & Consultants” and “Kailash Lawyers and Consultants” and ABN lookup search results for ABN 90 604 582 and ABN 60 173 273 485, being four pages.RELEVANT FACTSBankruptcy Notice On 12 March 2024, Judge Humphreys made costs orders, in favour of Kailash Lawyers against Mr Patial, ordering him to pay within 14 days the amounts of $36,398.05 plus GST,[5] interest on that amount from 1 December 2022,[6] and $7,543.02 pursuant to sch 2 pt 1 of the Rules.[7] [5] Which totals $40,037.86 (rounded up to the nearest cent).[6] These being the costs as awarded by the FWC.[7] Exhibit 3 (page 33); Kailash Lawyers Pty Ltd v Patial (No 2) [2024] FedCFamC2G 269. On 16 September 2024, Kailash Lawyers issued a Bankruptcy Notice for the debt amount of $47,580.87 due to be paid within 21 days after service.[8] [8] Affidavit of Service of Bankruptcy Notice of Gaurav Sareen filed 8 November 2024 at annexure A. Kailash Lawyers asserts that Mr Patial was served with the Bankruptcy Notice on 17 September 2024 by email at two email addresses of Mr Patial.[9] [9] Affidavit of Service of Bankruptcy Notice of Gaurav Sareen filed 8 November 2024 at [2]. Kailash Lawyers further asserts that, as of 9 October 2024, Mr Patial has failed to comply with the Bankruptcy Notice, or to satisfy the Court he had a counter-claim, set-off or cross demand equal to or more than the sum claimed. On 8 November 2024, the applicant filed the Creditor’s Petition commencing these proceedings. The Creditor’s Petition filed on 8 November 2024 is not the first creditor’s petition to have been filed by Kailash Lawyers against Mr Patial. On 3 June 2024, Kailash Lawyers filed the first creditor’s petition. Those proceedings were finalised and that creditor’s petition was dismissed.Other Proceedings The parties have a long and complex litigation history, which is the subject of no less than 20 published decisions. Those decisions are a matter of public record. In 2021, Mr Patial claimed that he had been an employee of Kailash Lawyers, and that he had been unfairly dismissed from his employment. While Mr Patial initially commenced proceedings in the FWC, he has sought to take his claim all the way to the High Court of Australia. A summary of the judgments[10] relating to the unfair dismissal proceedings between the parties is as follows:[10] The summary was created from the published decisions.
Evidence
Evidence Before The Court
Following the filing of written submissions in respect of the Interim Application filed 15 April 2025, and the Creditor’s Petition and opposition thereto, on 10 June 2025 judgment was reserved.EVIDENCEDocuments relied on The Court has read and considered the following documents which Mr Patial relied upon in support of the Interim Application:(a)Interim Application filed 15 April 2025; (b)Affidavit of Prateek Patial filed 15 April 2025; and(c)Closing submissions Part A filed 2 June 2025. The Court has read and considered the following documents which Kailash Lawyers relied upon in support of the Creditor’s Petition:(a)Creditor’s Petition filed 8 November 2024;(b)Affidavit of Service of Bankruptcy Notice of Gaurav Sareen filed 8 November 2024;(c)Affidavit of Amit Pall sworn on 7 November 2024;[3] (d)Affidavit of Search of Gaurav Sareen filed 8 November 2024;(e)Affidavit of Amit Pall filed 14 February 2025;(f)Affidavit of Gaurav Sareen filed 24 March 2025;(g)Affidavit of Debt of Amit Pall filed 26 May 2025; (h)Affidavit of Search of Gaurav Sareen filed 26 May 2025; (i)Outline of Submissions filed 24 March 2025;(j)Applicant’s submission in reply filed 14 May 2025; and(k)Applicant’s closing reply submission filed 6 June 2025.[3] Part of Creditor’s Petition. The Court has read and considered the following documents which Mr Patial relied upon in opposition to the Creditor’s Petition:[4][4] As indicated during the hearing, the matters relied upon by Mr Patial in the Interim Application have also been taken into consideration as part of the grounds in opposition to the Creditor’s Petition.(a)Notice stating grounds of opposition to application, interim application or petition filed 2 December 2024;(b)Affidavit of Prateek Patial filed 2 December 2024;(c)Affidavit of Prateek Patial filed 13 December 2024;(d)Affidavit of Prateek Patial filed 20 February 2025;(e)Affidavit of Prateek Patial filed 21 March 2025;(f)Affidavit of Prateek Patial filed 15 April 2025; (g)Affidavit of Prateek Patial filed 26 May 2025 (sans objections); (h)Closing submissions Part B filed 2 June 2025; and(i)Closing submission in reply filed 10 June 2025. Mr Patial and Mr Pall were both cross-examined. The Court heard oral submissions from both parties. The Court has read the written submissions which have been filed. The submissions made by Mr Patial are, for the most part, misguided and of little assistance to the Court. While all of the submissions have been considered, not all have been addressed in these Reasons for Judgment. The hearing of the Interim Application and Creditor’s Petition occurred on 26 May 2025. That is when the evidence closed. For the avoidance of doubt, the Court notes that the submissions filed by Mr Patial on 2 June 2025, refer to an affidavit that was filed “contemporaneously”. The Court did not grant any leave to Mr Patial to file further evidence. That affidavit has not been read nor considered by the Court in coming to its determination herein.
Decision
Reasons for decision
Ground 6 is not made out. CONCLUSION The Court is satisfied that Kailash Lawyers has proved the matters in s 52 of the Act, and that the requirements of the Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth) have been complied with. In those circumstances, the Court may make a sequestration order. The Court may decline to make the sequestration order and dismiss the petition if “for other sufficient cause a sequestration order ought not to be made”.[37] [37] Act s 52(2)(b). For reasons explained, the Court is not satisfied that there is any sufficient cause as to why a sequestration order ought not be made. The Court is satisfied that a sequestration order should be made against the estate of Mr Patial. The Court so orders.