On 5 October 2018, Ms Akal Kaur Khalsa was sentenced in the Downing Centre District Court to 12 months’ imprisonment to be served by way of an Intensive Corrections Order, for eight offences involving:
- disposing of property with intent to defraud her creditors (five counts)
- removing property valued at $20 or more within 12 months of becoming a bankrupt (one count)
- attempting to leave Australia without the written consent of her trustee (one count)
- making a false declaration on her Statement of Affairs (one count).
The charges stemmed from a home birth on 21 October 2006 where Ms Khalsa, engaged as an independent midwife, was found negligent after the baby suffered hypoxia that left him with cerebral palsy—a permanent lifelong condition.
Negligence proceedings started against Ms Khalsa in the Supreme Court of NSW on 20 October 2009. She was found guilty of negligence and, on 27 September 2013, ordered to pay $6,606,583.00 in damages for the lifelong care of the child.
On 4 February 2014, Ms Khalsa was arrested at Sydney International Airport as she attempted to depart on a business class, one-way flight from Sydney to Wellington, New Zealand.
After she was released, and after knowing she would become bankrupt in the immediate future, Ms Khalsa disposed of a number of assets in a bid to defeat the child’s claim to the payout. These assets included her investment shares, a valuable original oil painting and cars.
Ms Khalsa intended to use the money she raised from selling these assets to support a new life in New Zealand. She also gave her daughter a car.
Ms Khalsa gave her bankruptcy trustee false information on numerous occasions to obfuscate her true financial position and hinder investigation into her assets.
She also attempted to leave Australia for a second time. On this occasion, she attempted to do so using a first class, one-way ticket to New Zealand with a different (but legitimate) passport. She was detected before boarding and denied entry onto the aircraft.
On 30 July 2017, Ms Khalsa was discharged from bankruptcy meaning she is no longer liable for paying the $6.6 million in damages. Ultimately, the child received $407,942.90 in damages. If Ms Khalsa had not offloaded the assets she did, he would have received a further $74,275.62.
Ms Khalsa was 73-years-old at the time of sentence. She had no criminal history and was suffering from depression as a result of the unexpected death of her son in 2011.
Ms Khalsa pleaded not guilty to all but two of the offences on the basis that she denied having the intention to defeat the child’s claim to her assets. The jury found her guilty of the offences.