Actgall Pty Ltd (in liq) v Morella - [2025] FCA 830

FEDERAL COURT OF AUSTRALIA
Actgall Pty Ltd (in liq) v Morella [2025] FCA 830

File number: ACD 13 of 2025

Judgment of: STEWART J

Date of judgment: 18 July 2025

Catchwords: PRACTICE AND PROCEDURE – application for default judgment – competing application for adjournment – where defendants did not attend case management hearing or defend proceeding with due diligence – where defendants only filed notice of acting the day prior to the default hearing – where defendants clearly on notice of claims and proceeding – where no defence apparent – where substantial evidence adduced to support the plaintiffs’ claims – application for adjournment dismissed and application for default judgment granted

Legislation:
Civil Dispute Resolution Act 2011 (Cth) s 6

Corporations Act 2001 (Cth) ss 588FDA, 588FDB, 588FF(1)(a), (c)

Federal Court of Australia Act 1976 (Cth) s 51A

Federal Court Rules 2011 (Cth) rr 5.22(c), (d), 5.23(2)(b)

Cases cited:
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175

Chamberlain Group, Incorporated v Giant Alarm Systems Co, Limited (No. 2) [2019] FCA 1606

EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328

Hugo Boss AG v Hardge [2024] FCA 1325

Stone v Mizzi (No 2) [2024] FCA 927

Division: General Division

Registry: Australian Capital Territory

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Number of paragraphs: 55

Date of hearing: 18 July 2025

Counsel for the Plaintiffs: M A Karam

Solicitor for the Plaintiffs: Thomson Geer

Solicitor for the Defendants: S Mattiussi of Addisons Lawyers

ORDERS

ACD 13 of 2025

BETWEEN:
ACTGALL PTY. LIMITED ACN 080 502 272 (IN LIQUIDATION)

First Plaintiff

HENRY JOSEPH KAZAR

Second Plaintiff

AND:
FRANCESCO ANTHONY MORELLA

First Defendant

CANBERRA COMMERCIAL (ACT) PTY LTD ACN 662 472 595

Second Defendant

RHCF PTY LTD ACN 611 225 659

Third Defendant

ORDER MADE BY:

STEWART J

DATE OF ORDER:

18 JULY 2025

THE COURT ORDERS THAT:
1.The defendants’ application for an adjournment be dismissed.
2.The first defendant pay the first plaintiff $2,447,518 in respect of the first defendant’s loan account with the first plaintiff, plus:
(a)interest of $425,583.12 under s 51A of the Federal Court Act 1976 (Cth) (FCA Act) calculated on principal of $2,063,125.00 for the period 21 December 2022 to 18 July 2025; and
(b)interest of $73,646.52 under s 51A of the FCA Act calculated on principal of $384,393.00 for the period 10 March 2023 to 18 July 2025.

3.The first defendant and second defendant (jointly and severally) pay the first plaintiff and the second plaintiff $524,467 in respect of the Business Sale, plus prejudgment interest of $18,467.70 under s 51A of the FCA Act for the period 14 February 2025 to 18 July 2025.
4.The first defendant and third defendant (jointly and severally) pay the first plaintiff and the second plaintiff $145,000 in respect of the RHCF Payments, plus prejudgment interest of $26,116.69 pursuant to s 51A of the FCA Act for the period 8 May 2023 to 18 July…

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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Details

Case: [2025] FCA 830
Decision Date: 18 July 2025

CaseChat Overview and Summary

Actgall Pty Ltd (in liquidation) was the plaintiff and Morella and others were the defendants in the Federal Court. The plaintiff sought a default judgment against the defendants, who did not appear or defend the proceeding. The defendants filed a notice of acting the day before the default judgment hearing, but the Court found this did not excuse their failure to act with due diligence. The defendants were clearly aware of the claims and the proceeding, and no defence was apparent.

The court considered the defendants' lack of participation in the proceeding, including their failure to attend a case management hearing or file a defence. The plaintiff presented substantial evidence to support its claims. The court held that the defendants' application for an adjournment was without merit given their apparent awareness of the proceeding and their failure to act diligently. The court granted the plaintiff's application for a default judgment.

The court ordered that the defendants pay the plaintiff significant sums for the outstanding loan, business sale, and RHCF payments, with interest and prejudgment interest as specified. The defendants were also ordered to pay the plaintiffs' costs of the proceeding, which were to be assessed on a lump sum basis. The court directed that the plaintiffs file and serve a costs summary and submissions by a specified date and referred the determination of the lump sum costs to a registrar for further process. The proceeding was dismissed in all other respects.

Orders

Orders of the court

1. The defendants’ application for an adjournment be dismissed.

2. The first defendant pay the first plaintiff $2,447,518 in respect of the first defendant’s loan account with the first plaintiff, plus:

(a) interest of $425,583.12 under s 51A of the Federal Court Act 1976 (Cth) (FCA Act) calculated on principal of $2,063,125.00 for the period 21 December 2022 to 18 July 2025; and

(b) interest of $73,646.52 under s 51A of the FCA Act calculated on principal of $384,393.00 for the period 10 March 2023 to 18 July 2025.

3. The first defendant and second defendant (jointly and severally) pay the first plaintiff and the second plaintiff $524,467 in respect of the Business Sale, plus prejudgment interest of $18,467.70 under s 51A of the FCA Act for the period 14 February 2025 to 18 July 2025.

4. The first defendant and third defendant (jointly and severally) pay the first plaintiff and the second plaintiff $145,000 in respect of the RHCF Payments, plus prejudgment interest of $26,116.69 pursuant to s 51A of the FCA Act for the period 8 May 2023 to 18 July 2025.

5. The defendants pay the plaintiffs’ costs of the proceedings, such costs to be to be assessed on a lump sum basis in accordance with part 4 of the Costs Practice Note (GPN-COSTS).

6. The plaintiffs file and serve a costs summary and submissions by 25 July 2025.

7. The determination of the lump sum costs be referred to a registrar, including in accordance with any further process determined by the registrar to whom it is referred.

8. The proceeding is otherwise dismissed.

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

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	ACD 13 of 2025
Judgment of:	STEWART J
Date of judgment:	18 July 2025
Catchwords:	PRACTICE AND PROCEDURE – application for default judgment – competing application for adjournment – where defendants did not attend case management hearing or defend proceeding with due diligence – where defendants only filed notice of acting the day prior to the default hearing – where defendants clearly on notice of claims and proceeding – where no defence apparent – where substantial evidence adduced to support the plaintiffs’ claims – application for adjournment dismissed and application for default judgment granted
Legislation:	Civil Dispute Resolution Act 2011 (Cth) s 6 Corporations Act 2001 (Cth) ss 588FDA, 588FDB, 588FF(1)(a), (c) Federal Court of Australia Act 1976 (Cth) s 51A Federal Court Rules 2011 (Cth) rr 5.22(c), (d), 5.23(2)(b)
Cases cited:	Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 Chamberlain Group, Incorporated v Giant Alarm Systems Co, Limited (No. 2) [2019] FCA 1606 EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328 Hugo Boss AG v Hardge [2024] FCA 1325 Stone v Mizzi (No 2) [2024] FCA 927
Division:	General Division
Registry:	Australian Capital Territory
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	55
Date of hearing:	18 July 2025
Counsel for the Plaintiffs:	M A Karam
Solicitor for the Plaintiffs:	Thomson Geer
Solicitor for the Defendants:	S Mattiussi of Addisons Lawyers

ORDER MADE BY:	STEWART J
DATE OF ORDER:	18 JULY 2025