Kailash Lawyers Pty Ltd v Patial
[2025] FedCFamC2G 1432
•5 September 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
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
Legislation: Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41, 44, 306
Federal Circuit and Family Court of Australia (Division 2) (Bankruptcy) Rules 2021 (Cth)
Cases cited: Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
Deputy Commissioner of Taxation v Cumins [2008] FCA 353
De Robillard v Carver [2007] FCAFC 73
Enersib v Wreckair Pty Ltd (1992) 33 FCR 581
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; [1983] HCA 25
Guss v Johnstone [2000] HCA 26
Health Care Complaints Commission v Qasim, in the matter of Qasim [2025] FedCFamC2G 1176
James v Federal Commissioner of Taxation (1955) 93 CLR 631
Kailash Lawyers Pty Ltd v Patial [2025] FCA 884
Kailash Lawyers Pty Ltd v Patial (No 2) [2024] FedCFamC2G 268
Ling v Enrobook Pty Ltd [1997] FCA 226; (1997) 74 FCR 19
Owen v Sandhu [2024] FCA 198
Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants [2025] FCA 114
Re Goldberg; Ex parte Law Society of NSW (1988) 82 ALR 271
Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) [1994] FCA 376
Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111
Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321
Williams v Spautz [1992] HCA 32; (1992) 174 CLR 509
Division: Division 2 General Federal Law Number of paragraphs: 111 Date of last submission/s: 10 June 2025 Date of hearing: 26 May 2025 Place: Parramatta Counsel for the Applicant: Mr Edney Solicitor for the Applicant: Vexo Lawyers Appearing for the Respondent: In person ORDERS
SYG 2899 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: KAILASH LAWYERS PTY LTD ACN604 582 550 T/AS KAILASH LAWYERS AND CONSULTANTS
Applicant
AND: PRATEEK PATIAL
Respondent
ORDER MADE BY:
JUDGE OBRADOVIC
DATE OF ORDER:
5 SEPTEMBER 2025
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 to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04(h) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).
REASONS FOR JUDGMENT
JUDGE OBRADOVIC:
By way of Creditor’s Petition filed 8 November 2024, the applicant, Kailash Lawyers Pty Ltd ACN 604 585 550 t/as Kailash Lawyers and Consultants (“Kailash Lawyers”), moves the Court for a sequestration order against the estate of the respondent, Mr Prateek Patial (“Mr Patial ), to satisfy a judgment debt in the claimed amount of $54,532.34 (inclusive of post-judgment interest up to 9 October 2024).
Mr Patial filed his grounds of opposition to the Creditor’s Petition on 2 December 2024, raising, in summary, the following:[1]
(a)Defective service of the Bankruptcy Notice;
(b)Material discrepancies in the debt amounts;
(c)Existence of a counter-claim, set-off, or cross demand;
(d)Invalidity of the act of bankruptcy;
(e)Acts of perjury; and
(f)Abuse of process.
[1] Taken from the Notice stating grounds of opposition to application, interim application or petition filed 2 December 2024.
On 14 March 2025, the Creditor’s Petition was set down for hearing on 26 May 2025.
On 21 March 2025, Mr Patial filed an Application in a Proceeding. On the Notice of Filing and Hearing, that Application in a Proceeding was noted as being listed for hearing on 26 May 2025, at 10am.
The Application in a Proceeding moved the Court for orders as follows:
(a)The Law Society of New South Wales (“Law Society of NSW”) Committee, the New South Wales Bar Association, and the Legal Services Commissioner be appointed as independent experts to provide expert opinion and assessment in relation to the matters raised in these proceedings pursuant to r 15.08 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (“Rules”).
(b)For the Court to appoint, pursuant to r 10.01(3)(o) of the Rules, an expert to provide a report no later than 22 May 2025 addressing the following:
(i)The validity of the “Agreement for General Use” signed between the parties.
(ii)Whether the “Agreement for General Use” was approved as standard practice by the Law Society of NSW for restricted practitioners.
(iii)Whether the Fair Work Commission’s (“FWC”) decision Prateek Patial v Kailash Lawyers Pty Ltd T/A Kailash Lawyers and Consultants [2021] FWC 4167 contains errors of law or jurisdiction, including:
(A)Whether there was legal error in the FWC’s findings of the relationship between Kailash Lawyers and Mr Patial;
(B)Whether the FWC applied the correct authorities in determining the employment relationship;
(C)Whether the FWC correctly applied the multifactor test; and
(D)Whether the FWC exceeded its powers in relying on the Small Business Fair Dismissal Code, and whether this was a denial of procedural fairness.
(iv)Whether the FWC correctly calculated costs in Prateek Patial v Kailash Lawyers Pty Ltd T/A Kailash Lawyers and Consultants [2022] FWC 2721.
(v)The accurate calculation of legal costs payable by Mr Patial as assessed by an assessor approved by the Law Society of NSW.
(vi)Whether Kailash Lawyers has failed to pay Mr Patial’s outstanding renumeration for work performed in August 2020.
(vii)Whether Kailash Lawyers had failed to pay an additional 10% of gross billings earned by Mr Patial for the period April 2019 to August 2020.
(viii)Whether Kalash Lawyers deducted the outstanding amount from the Bankruptcy Notice.
(ix)What the exact amount Mr Patial owes to Kailash Lawyers.
(c)For the matter to be referred to a Registrar, pursuant to r 19.01 of the Rules, to conduct an investigation and provide a report and recommendations by 22 May 2025 addressing legal and factual questions, set out in identical terms to those summarised at [5](b)(i)-(ix) above.
(d)That the Court, the expert referred to at [5](b) above, and the Registrar referred to at [5](c) above note, as material considerations, a number of listed points concerning evidence.
(e)Pursuant to r 18.05 of the Rules, the Court dispose of the proceedings.
(f)The proceedings be stayed pending the following:
(i)The completion of the reports as sought above;
(ii)The outcome of judicial review applications with file numbers NSD1/2025, NSD39/2025, and NSD129/2025;
(iii)The outcome of the proceedings in the Federal Court of Australia with file number NSD1016/2021;
(iv)The outcome of the Supreme Court of NSW proceedings with file number 2024/00283199 relating to professional negligence claims as against Kailash Lawyers and where Mr Patial has filed for default judgment;[2] and
(v)The outcome of the Supreme Court of NSW proceedings with file number 2024/00286813 relating to professional negligence, deficient legal advice, and deceptive conduct claims as against Mr Amit Pall (“Mr Pall”, being the sole director of Kailash Lawyers) and where Mr Patial has filed for default judgment.
[2] Though this was not pressed at hearing.
On 15 April 2025, Mr Patial filed an Interim Application. On the Notice of Filing and Hearing, the Interim Application was noted as being listed for hearing on 26 May 2025, at 10am.
The Interim Application filed 15 April 2025, moves the Court for orders as follows:
(a)Pursuant to s 41(6C) of the Bankruptcy Act 1966 (Cth), the time for compliance with the Bankruptcy Notice be extended to 30 November 2025 on the basis of Mr Patial having commenced proceedings raising genuine and substantial counter-claims and challenging the underlying judgment debt, which could not have been raised in the original proceeding.
(b)Pursuant to s 41(6A) of the Act, the Bankruptcy Notice be set aside on the basis:
(i)That Kailash Lawyers failed to disclose to the Official Receiver and the Court the existence of cross-claims and counter claims on foot at the time the Bankruptcy Notice was issued;
(ii)That Mr Patial has a counter-claim and cross demand currently in the Federal Court of Australia; and
(iii)That Mr Patial has lodged judicial review applications challenging the underlying judgment debt of the FWC.
(c)For the proceedings to be stayed pending the outcome of six Federal Court of Australia proceedings, and the Application in a Proceeding filed on 21 March 2025.
(d)For the Court’s orders of 14 March 2025 be stayed pending final determination of the Application in a Proceeding filed on 21 March 2025, and the six Federal Court of Australia proceedings.
On 15 May 2025, Kailash Lawyers filed four Notice of Objection – Subpoena and an Interim Application also seeking that the four subpoenas be set aside.
On 21 May 2025, orders were made for Kailash Lawyers’ Interim Application and the four objections to subpoenas to be listed for determination along with the Creditor’s Petition on 26 May 2025.
On 26 May 2025, the Court heard:
(a)Application in a Proceeding filed 21 March 2025, by Mr Patial;
(b)Interim Application filed 15 April 2025, by Mr Patial;
(c)Objection to Subpoena filed 15 May 2025, by Kailash Lawyers, issued to Australia and New Zealand Banking Group Ltd on 2 May 2025;
(d)Objection to Subpoena filed 15 May 2025, by Kailash Lawyers, issued to Australia Taxation Office on 2 May 2025;
(e)Objection to Subpoena filed 15 May 2025, by Kailash Lawyers, issued to Kailash Lawyers Pty Ltd on 2 May 2025;
(f)Objection to Subpoena filed 15 May 2025, by Kailash Lawyers, issued to National Australia Bank Ltd on 2 May 2025;
(g)Interim Application filed 15 May 2025, by Kailash Lawyers, seeking orders setting aside the subpoenas to Australia and New Zealand Banking Group Ltd, Australia Taxation Office, Kailash Lawyers Pty Ltd, and National Australia Bank Ltd;
(h)Creditor’s Petition filed 8 November 2024 and opposition thereto; and
(i)Oral Application for Recusal.
On 26 May 2025, orders were made:
(a)Dismissing the Application in a Proceeding filed 21 March 2025, by Mr Patial;
(b)For the filing of written submissions by both parties in respect of the Interim Application filed 15 April 2025, by Mr Patial;
(c)Setting aside the Subpoena issued to Australia and New Zealand Banking Group Ltd on 2 May 2025;
(d)Setting aside the Subpoena issued to Australia Taxation Office on 2 May 2025;
(e)Setting aside the Subpoena issued to National Australia Bank Ltd on 2 May 2025;
(f)Setting aside the Subpoena issued to Kailash Lawyers Pty Ltd on 5 May 2025;
(g)Dismissing the Interim Application filed 15 May 2025, by Kailash Lawyers in respect of the four subpoena;
(h)For the filing of written submissions by both parties in respect of the Creditor’s Petition filed 8 November 2024 and the Grounds of Opposition to the Creditor’s Petition filed 2 December 2024; and
(i)Dismissing the oral Application for Recusal.
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.
EVIDENCE
Documents 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.
The Court further notes that Mr Patial has filed a further Application in a Proceeding on 6 June 2025, together with an affidavit. Three further affidavits were filed by Mr Patial, on 9 June 2025, 10 July 2025, and 4 September 2025. None of these documents have been read or considered by the Court in respect of the matters with which this judgment deals with. That further Application in a Proceeding is first returnable on 5 September 2025.
Exhibits
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 FACTS
Bankruptcy 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.
Date Name Summary 6 Aug 2021 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailas Lawyers and Consultants [2021] FWC 4167 Claim by Mr Patial for unfair dismissal. Commissioner McKenna found that Mr Patial was not an employee of Kailash Lawyers and dismissed the application. 24 Nov 2021 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2021] FWCFB 6055 Full Bench of the FWC refused permission to appeal Commissioner McKenna’s first decision. 18 Jul 2022 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2022] FWC 1449 Commissioner McKenna found that Mr Patial was required to pay Kailash Lawyers’ costs subject to quantification. 28 Oct 2022 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2022] FWC 2721 Commissioner McKenna determined the amount of costs Mr Patial was required to pay and made an order accordingly. 6 Dec 2022 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2022] FWC 3199 Deputy President O’Neill dismissed Mr Patial’s application for a stay order over the Commissioner’s costs decision. 19 Apr 2023 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2023] FWCFB 73 Full Bench of FWC refused permission to appeal the earlier appeal decision, refused an extension of time to file Mr Patial’s appeal of the costs liability decision, and refused permission to appeal the Commissioner’s costs quantification decision. 18 Jul 2023 Patial, in the matter of an application for leave to issue or file [2023] HCTrans 95 Chief Justice of the High Court refused Mr Patial’s application for leave to issue or file a proposed application for a constitutional or other writ. 5 Dec 2024 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2024] FWC 3388 Further application by Mr Patial in relation to the alleged dismissal in 2021 summarily dismissed. 20 Feb 2025 Prateek Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2025] FWCFB 41 Application for leave to appeal summary dismissal refused. Decision of the Full Bench of FWC.
On 12 March 2024, in Kailash Lawyers Pty Ltd v Patial (No 2) [2024] FedCFamC2G 269, Judge Humphreys made costs orders, inter alia, enforcing the costs order made by Commissioner McKenna on 28 October 2022 (as noted above).
On 21 February 2025, in Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants [2025] FCA 114, Bromwich J dismissed Mr Patial’s application for leave to appeal the enforcement orders made by Judge Humphreys. The appeal also dealt with the primary judge’s decision[11] not to grant an adjournment of the hearing.
[11] Kailash Lawyers Pty Ltd v Patial (No 2) [2024] FedCFamC2G 268.
The Creditor’s Petition, which is the subject of these proceedings, is grounded upon the costs judgment of Judge Humphreys, and relies on the Bankruptcy Notice dated 16 September 2024.
Mr Patial has made claims in the Federal Court of Australia as well as the District and Supreme Courts of NSW, which may be loosely referred to as off-setting claims for the purposes of the Creditor’s Petition. A summary of these other proceedings between the parties is as follows:
Date Name Summary 9 Jun 2022 Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2022] FCA 662 Statement of Claim struck out and ordered to be removed from the Court file. 29 Jul 2022 Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants (No.2) [2022] FCA 899 Mr Patial ordered to pay the respondent’s costs on an indemnity basis. 25 Aug 2022 Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants (No.3) [2022] FCA 987 Applications by both parties that the other be referred to the Legal Services Commissioner dismissed. 15 Mar 2023 Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2023] FCAFC 217 Application for extension of time and leave to appeal orders striking out statement of claim. Extension and leave granted. 25 Aug 2023 Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2023] FCAFC 155 Appeal against orders striking out statement of claim dismissed. 6 Mar 2024 Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants (No.4) [2024] FCA 179 Application for leave to file further statement of claim dismissed. Patial v Kailash Lawyers Pty Ltd t/a Kailash Lawyers and Consultants [2025] FCA 113 Application for leave to appeal interlocutory order not granting leave to file statement of claim dismissed. 21 Mar 2025 Patial v Kailash Lawyers Pty Ltd [2025] NSWSC 219 Application by Mr Patial that the agreement between him and Kailash Lawyers was a sham, and that he was an employee. Schmidt AJ made orders transferring the District Court of NSW proceedings to the Supreme Court of NSW, then transferring both those proceedings to the Federal Court of Australia, with the view of being heard and determined together with matter NSD1016/2021.
On 4 August 2025, Goodman J handed down a judgment in Kailash Lawyers Pty Ltd v Patial [2025] FCA 884, which sets out in some detail the history between the parties. That judgment, inter alia, dealt with four statutory demands issued by Mr Patial on Kailash Lawyers and three other corporate entities, all of which appear to be related. That judgment related to Federal Court of Australia proceedings with file numbers: NSD970/2025, NSD1041/2025, NSD1042/2025, NSD1043/2025, and NSD1044/2025.
The Court understands that apart from these proceedings in this Court which relate to the Creditor’s Petition, the parties are also presently before the Federal Court of Australia in proceedings bearing file numbers:
(a)NSD1016/2021, which is being case managed by Goodman J. On 13 June 2025, Mr Patial filed an interlocutory application for leave to file a third iteration of his statement of claim.[12]
(b)NSD1/2025, NSD39/2025, NSD129/2025 which are judicial review proceedings in respect of the decisions of the Full Bench of the FWC.
(c)NSD491/2025 and NSD468/2025 which are the transferred proceedings from the District and Supreme Courts of NSW.
[12] Kailash Lawyers Pty Ltd v Patial [2025] FCA 884 at [57].
DETERMINATION
The issue and service of a bankruptcy notice and non-compliance with that notice provides a mechanism through which a creditor may demonstrate an act of bankruptcy and petition the Court for a sequestration order to be made against the estate of the debtor.
Section 40(1)(g) of the Act describes a circumstance in which a debtor commits an act of bankruptcy.
If a debtor fails to comply with the terms of a bankruptcy notice within the specified time, that is, by the end of the 21st day after the day of service, the debtor commits an act of bankruptcy on that day.
Where a debtor has committed an act of bankruptcy the Court may, on a petition presented by a creditor, make a sequestration order against the estate of the debtor in accordance with the provisions of Pt IV Div 2 of the Act.
Interim Application filed 15 April 2025
A bankruptcy notice may be served by email.[13]
[13] Owen v Sandhu [2024] FCA 198 at [27]-[32].
While the need for personal or substituted service of a bankruptcy notice has been removed by the relevant regulations, a strict approach to the satisfaction of the elements of service is still required.[14]
[14] De Robillard v Carver [2007] FCAFC 73 at [67], Buchanan J (with whom Moore and Conti JJ agreed), where the Court was referring to the predecessor of the current reg 102 of Bankruptcy Regulations 2021 (Cth) being reg 16.01 Bankruptcy Regulations 1996 (Cth).
It has, however, been further noted by the Full Court of the Federal Court of Australia that the regulations contemplate the possibility of something less than actual receipt by the person to be served.[15]
[15] Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321 at [29].
On 17 September 2024, bankruptcy notice BN27320 (“Bankruptcy Notice”) was sent to two email addresses of Mr Patial.
The two email addresses are: [email protected] (“first email address”) and [email protected] (“second email address”).
Mr Patial asserts that he did not receive the emails or the attached Bankruptcy Notice at the time of the purported service at either of the email addresses. On the evidence and for reasons which follow, the Court does not accept Mr Patial’s assertion in this regard.
It is clear from Mr Patial’s own evidence, including his many affidavits relied upon, that both email addresses have been utilised by him over many years, and continue to be so utilised.
Furthermore and specifically, Mr Patial conceded in his oral evidence that the two email addresses to which the Bankruptcy Notice was sent, were his email addresses and that they were utilised by him at the relevant time.
The first email address is the email address which Mr Patial has noted as his address for service in these proceedings. It is the email address through which he regularly corresponds with the Court Registry, and the representatives of Kailash Lawyers.
The first email address is the email address which Mr Patial has noted:[16]
(a)Under the heading “Filing Details” on the Statement of Claim filed 2 August 2024, in the Supreme Court of NSW, in proceedings 2024/00283199 in which he is the plaintiff;
(b)Under the heading “Filing Details” on the Statement of Claim filed 5 August 2024, in the District Court of NSW, in proceedings 2024/00286813 in which he is the plaintiff;
(c)Under the heading “Applicant’s address” on the Originating Application filed 2 January 2025, in the Federal Court of Australia, in proceedings NSD1/2025 in which he is the applicant; and
(d)Under the heading “Applicant’s address” on the Originating Application filed 4 February 2025, in the Federal Court of Australia, in proceedings NSD129/2025 in which he is the applicant.
[16] CB: 104, 124, 152, 174; Affidavit of Prateek Patial filed 20 February 2025.
The first email address was used by Mr Patial on 11 September 2024 to send to Kailash Lawyers documents by way of service in proceedings SYG1123/2024 (which were proceedings relating to the previous creditor’s petition as noted at [27] above). Indeed, in those proceedings, Mr Patial raised the very same issue as he does herein, that is, he denied receiving the documents which were served upon him by email, to the first email address, pursuant to an order for substituted service.
The first email address was used by Mr Patial on 30 September 2024 in correspondence to the Department of Home Affairs, requesting information in respect of his “immi account”.[17]
[17] CB: 23; Affidavit of Prateek Patial filed 20 February 2025.
The second email address was utilised by Mr Patial in his correspondence to the FWC at the time of the unfair dismissal proceedings and the costs orders which were made by Commissioner McKenna.[18]
[18] CB: 237-238; Affidavit of Prateek Patial filed 20 February 2025.
There is no evidence, expert or otherwise, of any fault or malfunction of Mr Patial’s emails, computer or similar, at the relevant time.
Kailash Lawyers has not received any automated notification, or similar, of failed email delivery.
Furthermore, the Act requires service of the bankruptcy notice, not proof of actual receipt by the debtor. Proof of non-receipt (as compared with proof of non-delivery) is not sufficient to displace a conclusion that service has been effected.[19]
[19] Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, [1983] HCA 25 at [22], cited in Health Care Complaints Commission v Qasim, in the matter of Qasim [2025] FedCFamC2G 1176 at [71].
On balance, the Court finds that the Bankruptcy Notice was served on Mr Patial on 17 September 2024.
A debtor who has been served with a bankruptcy notice has 21 days from the date of service to apply to the Court to set aside the bankruptcy notice, including on the ground of counter-claim, set-off or cross demand.[20] The debtor must act within the 21 days.
[20] Bankruptcy Act 1966 (Cth) s 40(1)(g) (“Act”).
An application to set aside a bankruptcy notice can only be made before the time for compliance with the bankruptcy notice has passed.
Noting that Mr Patial was served with the Bankruptcy Notice on 17 September 2024, he had to act by the end of the day on 8 October 2024.
Mr Patial’s application to set aside the bankruptcy notice, by way of the Interim Application filed 15 April 2025, was made well after 21 days of service of the notice, and therefore, after time for compliance had passed. The act of bankruptcy had already occurred. It occurred on 9 October 2024.
If an application had been made to the Court, before the expiration of time fixed for compliance to set aside the bankruptcy notice on the ground of counter-claim, set-off or cross demand, and the Court had not before the expiration of time determined that it was satisfied that the debtor has such counter-claim, set-off or cross demand, the time for compliance would have be deemed to have been extended.[21] However, no such application has ever been made.
[21] Act s 41(7).
It is well established that there is no statutory grant of power to annul an act of bankruptcy, or to extend the time for compliance with a bankruptcy notice other than in a case where the conditions of s 41(6A) of the Act have been satisfied.[22]
[22] Guss v Johnstone [2000] HCA 26 at [55].
Therefore, the applications which Mr Patial makes by way of the Interim Application filed 15 April 2025, for the extension of time for compliance with the Bankruptcy Notice and that the Bankruptcy Notice be set aside, are brought too late and must be dismissed.
Lastly, in respect of the relief sought in [5] of the Interim Application filed 15 April 2025, namely, that the proceedings be stayed pending the determination of other proceedings, that application is part and parcel of the applications for extension of time and the setting aside of the Bankruptcy Notice, and is sought on the basis that those proceedings “have a material bearing on the existence, quantum and enforceability of the alleged debt”. There is no utility in the stay given that the act of bankruptcy has already occurred, and that the Bankruptcy Notice cannot now be set aside nor extended.
In so far as the stay is sought in respect of the Creditor’s Petition per se, for reasons which are explained below, a stay will not be granted.
Opposition to Creditor’s Petition
While not formally a ground of opposition, or part of the Interim Application, Mr Patial raises issue with the name of the applicant. Exhibit 6 shows that “Kailash Lawyers Pty Ltd” (being the entity name) and “Kailash Lawyers & Consultant” (being the business name) have the same ABN. Exhibit 6 also shows that Mr Pall personally has an ABN, which is the same ABN for the trading name “kailash lawyers and consultant”.[23] Nothing turns on this.
[23] Small caps.
The Court is not satisfied that the Bankruptcy Notice issued in the name of “KAILASH LAWYERS PTY LTD T/AS KAILASH LAWYERS AND CONSULTANTS ABN/ACN90604582550/604582550”, is invalid due to the use of the word “and” instead of the use of the ampersand.
Any difference in the trading (or business) name, said to arise by the use of the word “and” instead of the ampersand, is at most a formal defect.[24] The Court is not satisfied that the use of “and” instead of “&” has misled Mr Patial, or could reasonably have misled Mr Patial as to what was necessary to comply with the Bankruptcy Notice.[25]
[24] Act s 306.
[25] James v Federal Commissioner of Taxation (1955) 93 CLR 631 at 644.
The orders of 12 March 2024 use the ampersand in the name of the applicant, but do not refer to the ACN. Once again, this cannot of itself invalidate the Bankruptcy Notice which does have the ACN noted.
Likewise, nothing turns on the difference, if any, in the name of the applicant as it appears in the court orders made on 12 March 2024, and in these proceedings. The applicant is one and the same.
In Ground 1, Mr Patial alleges that the Bankruptcy Notice has not been validly served. The Court has already dealt with this issue at [41]-[57].
Ground 1 is not made out.
In Ground 2, Mr Patial alleges that the discrepancy in the debt amounts as between the Bankruptcy Notice and the Creditor’s Petition, means that the petition should be set aside. He offers no authority for such a proposition.
The appeal against the orders of Judge Humphreys has been dismissed. The debt the subject of the Bankruptcy Notice is not an alleged debt. It is a judgment debt.
Kailash Lawyers is a judgment creditor who is owed as at the date of the act of bankruptcy, being the failure to comply with the Bankruptcy Notice, more than the statutory minimum and as such has standing to petition for Mr Patial’s bankruptcy.[26] There is, however, no requirement that the debt relied upon by the petitioning creditor be a judgment debt,[27] or that it be the amount the subject of the Bankruptcy Notice.[28]
[26] Act s 44.
[27] Re Goldberg; Ex parte Law Society of New South Wales (1988) 82 ALR 271.
[28] Enersib v Wreckair Pty Ltd (1992) 33 FCR 581 at 588.
Mr Patial relies on s 41(5) of the Act. There is no evidence that Mr Patial had given the requisite notice, within the time fixed for compliance with the Bankruptcy Notice, that he disputes the validity of the notice on the ground that the sum specified in the notice exceeds the amount in fact due. Section 41(5) is concerned with the Bankruptcy Notice, not the amount said to be owed in the Creditor’s Petition or any discrepancies between the two. Mr Patial’s reliance on s 41(5) is misguided.
Ground 2 is not made out.
In Ground 3, Mr Patial alleges the existence of a counter-claim, set-off or cross demand, as a basis for the opposition to the Creditor’s Petition.
Mr Patial further alleges that Kailash Lawyers falsely stated in the Creditor’s Petition that he has no counter-claims, set-offs or cross demands, and relies upon s 40(1)(g) of the Act to support this assertion that the Bankruptcy Notice has thus been invalidated.
The Court has already noted that Mr Patial did not apply to the Court, before the expiration of time fixed for compliance, to set aside the Bankruptcy Notice on the ground of counter-claim, set-off or cross demand, and that there is no power to extend time for compliance other than where the conditions of s 41(6A) of the Act have been satisfied (and noting the provision of s 41(7) of the Act has not been triggered).
Mr Patial’s reliance on s 40(1)(g) of the Act is misguided. That section goes to the act of bankruptcy having been committed by Mr Patial. Kailash Lawyers has obtained a final judgment or final order which has not been stayed, it has served the Bankruptcy Notice, and Mr Patial has neither complied with the requirements of the notice nor satisfied the Court, within the time fixed for compliance, that he has a counter-claim, set-off or cross demand as applicable.
In the outline of submissions filed 14 May 2025, Kailash Lawyers correctly sets out the relevant principles that apply where an alleged offsetting claim is relied upon in resisting a sequestration order:
(a)The prima facie starting point is that, upon proof of the matters required to be established by a petitioning creditor, the Court will make a sequestration order unless the debtor shows “sufficient cause” why the order should not be made.[29]
(b)The existence of an offsetting claim may provide such “sufficient cause”.[30] However, it must be a claim against the creditor – a claim against a third party will ordinarily not suffice, unless it is litigation that is well advanced and likely to result in the debtor being in a position to pay their debts.[31]
(c)The role of the bankruptcy court is not to try such an offsetting claim, but rather to see if the claim has “sufficient validity […] to justify a dismissal or adjournment of the petition”.[32]
[29] Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) [1994] FCA 376 at 7 (“Re James”).
[30] Ibid at 8-10.
[31] Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 26; [1997] FCA 226 at 13-14.
[32] Re James at 11 citing Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111 at 116.
As noted earlier at [36], Mr Patial and Kailash Lawyers remain embroiled in other litigation.
The fact that Mr Patial had commenced a number of other proceedings which involve Kailash Lawyers, does not of itself mean that these proceedings ought to be stayed.
The proceedings commenced by Mr Patial for judicial review might be loosely referred to as quasi appeals in respect of the unfair dismissal claim determinations.
The Court is mindful that the mere fact that an appeal has been lodged does not, without more, give rise to a duty to postpone the hearing of the petition. Mr Patial must point to grounds having a “real chance of success on appeal”.[33] He has not done so.
[33] See e.g. Deputy Commissioner of Taxation v Cumins [2008] FCA 353 at [16]-[18].
Indeed, Mr Patial has not addressed in his submissions, whether oral and/or written, the merit of any of the claims he makes in the various other proceedings he has on foot. He has not taken the Court to any relevant authority.
The other proceedings on foot[34] are as follows:
(a)Proceedings NSD1016/2021 – These proceedings were initiated by Mr Patial seeking compensation arising out of employment with Kailash Lawyers. The original statement of claim was struck out on 9 June 2022, and Mr Patial was granted liberty to replead. On 6 March 2024, Mr Patial was refused leave to file a new statement of claim as it failed to plead a cause of action. While Mr Patial has filed an interlocutory application for leave to file a third statement of claim, no such statement of claim has been filed. There is no basis to conclude that these proceedings have any merit.
(b)Proceedings NSD1/2025, NSD 39/2025, and NSD129/2025 – These are judicial review proceedings of decisions of the Full Bench of the FWC. There is no evidence as to the merit of these proceedings, nor towards provision of “sufficient reason” justifying going behind the judgment debt. There is no basis to conclude these proceedings have any merit. Furthermore, when considered alongside Mr Patial’s history of litigation challenging the decisions of the FWC, there is no evidence before the Court to indicate or suggest that these proceedings deal with any new matter not previously considered and, consequently, have any greater chance of success. There is no basis to conclude that these proceedings have any merit.
(c)Proceedings NSD491/2025 and NSD468/2025 – These are proceedings which have been transferred to the Federal Court of Australia from the District and Supreme Courts of NSW in which Mr Patil seeks compensation from Mr Pall and Kailash Lawyers arising out of employment with Kailash Lawyers. The claim brought in the District Court of NSW by Mr Patial, seeks compensation and pecuniary penalties for deceptive statements by Mr Pall, alleged to have been made to the Law Society of NSW, Legal Aid NSW, Office of Migration Agents Registration Authority, and FWC. The claim brought in the Supreme Court of NSW by Mr Patial seeks an order for a review of the contract between Mr Patial and Kailash Lawyers (and interestingly, refers to Kailash Lawyers’ trading name with the use of “and” instead of the ampersand which Mr Patial raises as a basis of invalidity of the Bankruptcy Notice in these proceedings). Mr Patial also claims compensation from Kailash Lawyers for professional negligence and damages for breach of duty of care. The statements of claim allege unfair contract, professional negligence, and deceptive conduct. There is no basis to conclude these proceedings have any merit.
[34] See [36].
The Court is therefore not satisfied that any of Mr Patial’s claims are of sufficient validity to justify a dismissal or adjournment of the Creditor’s Petition.
Ground 3 is not made out.
In Ground 4, Mr Patial alleges invalidity of the act of bankruptcy vis-à-vis the service of the Bankruptcy Notice and the existence of a valid counter-claim and cross demand.
For reasons previously explained, the Court is not satisfied that the Bankruptcy Notice is invalid.
In Ground 5, Mr Patial alleges that Mr Pall has knowingly made false and misleading statements under oath. These are very serious allegations.
It is apposite to be reminded of the wording of s 140 of the Evidence Act1995 (Cth):
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject - matter of the proceeding; and
(c) the gravity of the matters alleged.
In order to be satisfied as to proof of any act, the Court must feel an actual persuasion of its occurrence or existence before it can be found:
It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of the given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect references.[35]
[35] Briginshaw v Briginshaw (1938) 60 CLR 336 at 343; [1938] HCA 34 at [32].
None of these very serious allegations have been made out on the evidence:
(a)Mr Patial takes issue with the affidavit verifying the creditor’s petition where Mr Pall affirmed his statement on 7 November 2024 but the verification under the affidavit is dated 6 November 2024. The explanation provided by Kailash Lawyers was that this was a typographical error, and Mr Pall confirmed the affidavit before being cross-examined. The Court is not persuaded Mr Pall made a false or misleading statement under oath.
(b)Mr Patial asserts that Mr Pall’s statement, at [3] of the affidavit verifying the Creditors Petition was misleading. There is no evidence that Mr Patial has paid or made any arrangements to pay the debt, either before or after service of the Bankruptcy Notice. The fact of Mr Patial making claims in other proceedings against Kailash Lawyers does not mean that the debt has been paid or appropriate arrangements have been made. Nor does it, or could it, satisfy the Court that he had a counter-claim, set-off or cross demand before 9 October 2024 as no application had relevantly been made. The Court is not persuaded Mr Pall made a false or misleading statement under oath on this basis.
(c)Mr Patial asserts that Mr Pall affirmed debt amounts which included overstated interest calculations. The debt claimed in the Creditor’s Petition is not limited to the amount claimed in the Bankruptcy Notice. The Court is not persuaded Mr Pall made a false or misleading statement under oath on this basis.
Ground 5 is not made out.
In Ground 6, Mr Patial alleges that Kailash Lawyers has engaged in abuse of process.
The allegations which Mr Patial makes against Kailash Lawyers and/or Mr Pall are very serious.
None of these very serious allegations have been made out on the evidence.
The abuse of process claim raised by Mr Patial is that, in bringing this application, Kailash Lawyers are seeking to frustrate or supress Mr Patial’s legitimate claims in the proceedings NSD491/2025 and NSD468/2025 (being the proceedings transferred to the Federal Court of Australia from the District Court and Supreme Courts of NSW). It is on the person claiming abuse of process to show that the predominant purpose of the legal process has been for a purpose other than for which it was designed.[36]
[36] Williams v Spautz [1992] HCA 32; (1992) 174 CLR 509 at 529.
Kailash Lawyers have standing to seek a sequestration order. Kailash Lawyers are seeking satisfaction of a debt owing.
Aside from a bare assertion, Mr Patial has not provided any evidence which would go towards a finding that the filing and pressing of the Creditor’s Petition is an abuse of process.
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.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic. Associate:
Dated: 5 September 2025
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