A former midwife who was ordered to pay $6.6 million to the family of a boy delivered in a botched home birth has been convicted of sending money to New Zealand instead of giving it to the child's family.
Akal Kaur Khalsa, 73, filed for bankruptcy in 2014 after the NSW Supreme Court ordered her to pay damages for negligence over the October 2006 birth, during which the boy sustained brain damage from a lack of oxygen.
Akal Kaur Khalsa filed for bankruptcy after being ordered to pay $6.6 million by the Supreme Court.
The boy subsequently developed quadriplegic cerebral palsy, epilepsy and an intellectual disability and will require a full-time carer for the rest of his life. A court estimate put the cost of his care at $6,140 per week when he is an adult.
In a 2013 judgment, Justice Peter Garling found Khalsa – who initially defended the Supreme Court case before withdrawing – had been negligent in both recommending and carrying out the home birth.
She was ordered to pay $6.6 million, including $4.24 million for the boy's future care, but ultimately paid about $410,000 to the boy's family and other creditors after filing for bankruptcy.
In several months between the court order and being declared bankrupt, Khalsa sold 4000 shares in Telstra, worth $18,950, organised a removalist company to move household items including a $5000 painting to New Zealand, and transferred $33,000 to New Zealand to fund the purchase of a Toyota Rav 4, which was later transferred into her daughter's name.
Khalsa also sold a caravan worth $13,500, sold $2938 of fashion shares and transferred $25,000 from her ANZ account to a bank account in New Zealand.
A statement of affairs, filed with her bankruptcy application, included portions that were false.
Khalsa was found guilty of eight charges during a District Court trial this year, including disposing of property in the 12 months before bankruptcy, making a false declaration, preparing to leave Australia without her bankruptcy trustee's permission, and disposing of property with intent to defraud.
On Friday, District Court judge Robert Sutherland sentenced Khalsa to a 12-month community corrections order and 150 hours of community service after finding the "piecemeal transfer of funds" was part of Khalsa's ongoing desire to move to New Zealand to be with her daughter.
Judge Sutherland said about $410,000 was distributed to Khalsa's "circling" creditors after she sold her share in a factory, including $407,000 to the family of the boy, $1272 to the Health Care Complaints Commission, and small amounts to the tax office and American Express.
He said a victim impact statement from the boy's mother described "financial loss, pain, anger, hate" and "condemnation" of Khalsa.
"There is no doubt the defrauding of creditors is a very substantial contributing factor to what might be described as the angst, properly felt, by [the boy's] mother," Judge Sutherland said.
The court heard Khalsa was labouring under considerable mental problems as she dealt with the death of her 28-year-old son in a car crash and "the destruction of the life she had been living, both professionally and personally".
"All operated, in my view, to cloud her judgment and to facilitate the decision she reached," Judge Sutherland said.
In February 2014, Khalsa was arrested as she tried to board a flight to Wellington using an Italian passport under the name Margaret Maria Saviane. The Supreme Court had issued a warrant for her arrest because she did not comply with a freezing order on her assets and did not attend court as she was required to.
Eight months later she tried to leave the country again, with a first-class ticket to Christchurch, but was again stopped at the airport because she was bankrupt and did not have permission from her trustee to travel.
On Friday, Judge Sutherland urged Khalsa to comply with the community corrections order, which requires her to be of good behaviour and be supervised by community corrections.
"Don't let yourself get arrested at the airport," Judge Sutherland said. "Don't let it happen for a third time."
Khalsa had her registration as a nurse and midwife cancelled in 2014.