FEDERAL COURT OF AUSTRALIA
Sandhu v Owen (No 2) [2025] FCA 878
File number: WAD 69 of 2024 Judgment of: JACKSON J Date of judgment: 1 August 2025 Catchwords: BANKRUPTCY - sequestration order based on costs order - application for review of decision of Registrar - application for extension of time to file review application - ground alleging bankruptcy notice and creditor's petition have not been issued in good faith because original decision was erroneous and outside jurisdiction and tainted by fraud and collusion - ground alleging costs order on which the petition debt is based was erroneous and unreasonable - ground alleging service of bankruptcy notice invalid - ground alleging creditor's petition served not given to Official Receiver contrary to s 13 Bankruptcy Regulations 2021 (Cth) - extension of time granted - review application dismissed Legislation: Bankruptcy Act 1966 (Cth) ss 40, 44, 52, 60, 156A, 306
Evidence Act 1995 (Cth) s 91
Federal Court of Australia Act 1976 (Cth) s 35A
Federal Court (Bankruptcy) Rules 2016 (Cth) rr 2.02, 4.04, 4.06
Bankruptcy Regulations 2021 (Cth) ss 10, 13, 66, 67, 68, 70, 72, 73
Mining Regulations 1981 (WA) r 168
Cases cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Bechara v Bates [2021] FCAFC 34; (2021) 286 FCR 166
Daly v Watson (1994) 50 FCR 544
de Robillard v Carver [2007] FCAFC 73; (2007) 159 FCR 38
Katter v Melhem (No 2) [2014] FCA 1176
Kitay, in the matter of Frigger (No 2) [2018] FCA 1032
Lowbeer v De Varda [2018] FCAFC 115; (2018) 264 FCR 228
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Psevdos v Commonwealth Bank of Australia (No 2) [2017] FCA 19
Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; (2017) 261 CLR 132
Re Flatau; Ex parte Scotch Whisky Distillers Ltd (1888) 22 QBD 83
Simon v Vincent J O'Gorman Pty Ltd (1979) 41 FLR 95
Totev v Sfar [2008] FCAFC 35; (2008) 167 FCR 193
Tristan David Owen v Tavanth Singh Sandhu [2021] WAMW 18
Waterton v Lafferty, in the matter of Lafferty [2019] FCA 1267
Division: General Division Registry: Western Australia National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 170 Date of last submissions: 26 May 2025 and 14 July 2025 (applicant)
27 May 2025 and 28 July 2025(respondent)Date of hearing: 20 May 2025 Counsel for the Applicant: Mr WB Macdonald Solicitor for the Applicant: Roe Legal Services Counsel for the Respondent: The respondent appeared in person Counsel for the Trustee in Bankruptcy: Mr S Taylor Solicitor for the Trustee in Bankruptcy: Lavan ORDERS
WAD 69 of 2024 BETWEEN: TANVANTH SINGH SANDHU
Applicant
AND: TRISTAN…
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- AGLC
- Sandhu v Owen (No 2) [2025] FCA 878
- Case
- [2025] FCA 878
- Decision Date
CaseChat Overview and Summary
The court meticulously evaluated the arguments presented by Mr Owen, who claimed that the bankruptcy notice and the creditor's petition were issued in bad faith, that the costs order on which the petition was based was erroneous, and that the service of both the bankruptcy notice and the creditor's petition was invalid. The court also examined whether the extension of time for filing the review application should be granted. In its reasoning, the court held that Mr Owen's allegations, though numerous, did not sufficiently demonstrate fraud, collusion, or any miscarriage of justice that would warrant a review of the decision. The court found that the proceeding before the Warden was conducted with the expected rigor and that the Warden's decision was well-reasoned and based on the evidence presented. Therefore, the court dismissed the application for review and affirmed the Registrar's orders.
In light of the findings, the court granted an extension of time for filing the application for review and affirmed the Registrar's sequestration order. The court also ordered that the costs incurred by the petitioning creditor and the trustee in bankruptcy in the application for an extension of time and the application for review were to be treated as costs in the bankruptcy. Additionally, the trustee in bankruptcy was granted liberty to apply in relation to the costs.
Orders
Orders of the court
1. The time for filing an application for review of the orders made by the Registrar on 14 January 2025 is extended to 5 March 2025.
2. The Registrar's orders are affirmed and the application for review is dismissed.
3. The reasonable costs of each of the petitioning creditor and of the trustee in bankruptcy, incurred in the application for an extension of time and the application for review, are costs in the bankruptcy.
4. The trustee in bankruptcy has liberty to apply in relation to paragraph 3 above.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Mr Owen also relied on the temporary cancellation of his Starlink service, what he says is Ms Dunn's attempt through Telstra to have it reconnected (after a request from the Court) and the freezing of his bank accounts, as further evidence of collusion. The evidence concerning those matters, if there is any, is however impossibly unclear, and I will not attempt to describe them further.Consideration The threshold question to be answered now is whether the matters advanced by Mr Owen provide sufficient reason to embark on an inquiry into whether the petition debt should not truly be taken to be owing, because the Warden's Decision on which it is based is tainted by fraud, collusion or miscarriage of justice, or because there are other circumstances that have been shown which make it appropriate to conduct an inquiry into the existence of the petition debt. That question needs to be answered in the context of the overall issue being whether Mr Sandhu, on whom the onus rests, has proven that the petition debt is truly owing. That question also needs to be answered in the context of the observations in Ramsay Health Care at [68] about the ability of the Court to rely on the ordinary processes of the adversarial system. In making the Warden's Decision, the Warden was acting in an administrative capacity, not in a judicial one: see Judicial Review Decision at [26]. But neither party submitted to me that anything about the jurisdiction or procedure in the Wardens Court affected the application of the observations from Ramsay Health Care. The transcript of the forfeiture hearing and the Warden's Decision itself reveal that the proceeding was conducted by the Warden and the legal practitioners who appeared before him with the degree of rigour to be expected of formal legal proceedings. In answering the threshold question, I need to consider the matters advanced by Mr Owen as a whole; a matter which would not by itself justify an inquiry into the judgment debt may still provide relevant support when considered with all the other matters relied on. Also, I will proceed on the basis that matters occurring after the Warden's Decision may be taken into account as supporting an inference that fraud, collusion or other improper conduct occurred before the Warden's Decision and so tainted that decision. I have, however, concluded that the matters on which Mr Owen relies, taken together, do not provide good reason to embark on an inquiry into whether the Warden's Decision was affected by fraud, or collusion, or was a miscarriage of justice, or should otherwise not be treated as proper basis for the petition debt. Mr Owen's contentions about the Warden's Decision are palpably an attempt to relitigate the proceeding that was before the Warden. To a large extent, Mr Owen points to minutiae concerning matters such as HGS's invoices or lists of tenements in authorisation letters and tenement reports, and then expands those points into large allegations of fraud. But even taken together, the matters on which he relies do not provide any sound support for such serious allegations. To address them all:(1)Mr Sandhu was found not to be an honest witness in the proceeding before Warden Hills-Wright (see above [53]), but he did not give evidence at the forfeiture hearing. What Mr Owen wanted the Court to take from that circumstance was never made clear. An assessment made of a witness in a different proceeding provides a slender basis for impugning the evidence adduced by senior counsel on behalf of that person (not being any testimony by the person himself), and the decision of an impartial and independent Warden after thorough consideration of that evidence.(2)One incorrect reference to a prospecting licence in a letter from Mr Sandhu is hardly significant and by no means points to any fraud. What Mr Owen wanted the court to take from that letter was entirely unclear.(3)The complaints about the HGS invoices were properly characterised by Mr Sandhu's counsel at the hearing before me as concerning minutiae. Mr Hawker's explanation for them was essentially that he did not check the tenements properly. The Warden appeared to accept that. The minor respects in which the invoices have been shown to have been incorrect do not provide any reason to think that the main body of the expenditure on the existing tenements which they evidenced was never conducted, let alone that the invoices as a whole were fraudulent fabrications. It was not at all clear why the proposition that Mr Hawker was, effectively, being paid for his work in shares was indicative of fraud. If anything, the fact that it was disclosed on the face of the invoices that were put into evidence was suggestive of transparency. If the suggestion was this disclosure was anachronistic or proleptic, that suggestion was never made clear. The Warden took Mr Owen's complaints about the invoices into account but did not find that they showed fraud or dishonesty or that the expenditure relied on had not occurred. To the contrary, the Warden accepted that the activity that it reflected had occurred in relation to the disputed ground, albeit that a small proportion of it had been attributed to an incorrect tenement.(4)Mr Owen's complaints about Mr Hawker's report about the Shallow Mining Gold project were unclear. To the extent that they identified that six prospecting licences had been incorrectly identified in the report as pending, it does not follow from that error that the report as a whole was falsified. Mr Hawker explained the error at the forfeiture hearing. Nothing in the nature of the explanation justifies this Court as treating the error as potential evidence of fraud.(5)Nor can Mr Owen's broader attack on Mr Hawker's credibility provide support for an inquiry behind the Warden's Decision. The Warden heard all the evidence and was in a position to weigh and assess it, as he did. The main specific matter on which Mr Owen relied in this regard, being Mr Hawker's evidence about a drilling program supposedly conducted in December 2018, was considered by the Warden. The Warden did not rely on Mr Hawker's evidence in that regard; he relied on other evidence produced by Mr Hawker, including documentary evidence, and on oral, documentary and photographic evidence produced by a different witness. An error in referring to parts per million rather than parts per billion is more indicative of inattention than fraud; if, as Mr Owen asserts, an experienced geologist would not make that error, it is a mystery as to what would be gained by deliberately falsifying a report in that way. And, again, the Warden specifically (and emphatically) rejected Mr Owen's claims that evidence had been fabricated.(6)Mr Owen's complaint about the Warden's treatment of the evidence about his own activities on the contested ground is merely an expression of disagreement with the Warden. The Warden's line of reasoning was open to him. While Mr Owen may be right to say that he could not have photographed all the ground, he could have taken photographs that could have been presented as samples. I would be slow to look behind the conclusion of an experienced Mining Warden about a matter such as this.(7)Mr Owen's submission that Mr Sandhu did not rely on Mr Scattini's evidence before the Warden is inaccurate. The transcript of the forfeiture hearing reveals that, initially, Mr Sandhu sought to adduce Mr Scattini's evidence as expert evidence. Counsel for Mr Owen objected to this, and ultimately the objection was resolved by senior counsel for Mr Sandhu effectively stipulating that he only relied on Mr Scattini as a witness of fact, concerning various observations he had made, and not as an expert witness as to his opinions. Mr Sandhu did not rely on a particular calculation and graph found in Mr Scattini's report. So it was open to the Warden to rely on the rest of Mr Scattini's evidence as to factual observations he had made, and that is what the Warden did: see e.g. Warden's Decision at paras 298 and 300-301.(8)Mr Owen's evidence that Mr Kavenagh accompanied Mr Scattini on a visit to relevant tenements does not establish anything untoward. It is commonplace for solicitors to participate in the engagement and briefing of expert witnesses and they have professional obligations not to interfere with the experts' independence when they do so. In any event, Mr Scattini's evidence did not end up as expert evidence. While it is unnecessary to make a finding about what Mr Kavenagh meant when he said 'we probably shouldn't be talking', one obvious explanation is the rule of courtesy that prevents solicitors from talking to legally represented parties on the opposing side without those parties' lawyers present.(9)As to Mr McCarty's evidence, the reason why he terminated the audio link during the forfeiture hearing is unclear. The material piece of evidence on which the Warden relied was a satellite image that Mr McCarty had supplied to Mr Hawker. It does not follow from Mr McCarty's conduct in the witness box that the image was fabricated, and it was open to the Warden to accept it as relevant evidence. The reason why Mr McCarty refused to supply the satellite image to Mr Owen is also unclear. Mr McCarty's own explanation was he did not have the time to deal with Mr Owen as a customer. It was open to the Warden to accept that, as he did, and Mr Owen has not advanced any good reason for thinking that anything untoward was behind Mr McCarty's refusal.