Federal Court of Australia

Rix Electrical Contracting Pty Ltd (in liquidation) v Aitchison, in the matter of Rix Electrical Contracting Pty Ltd [2026] FCA 566

ORDERS

THE COURT ORDERS THAT:

1. Pursuant to r 9.08 of the Federal Court Rules 2011 (Cth), the second plaintiff cease to be a party to the proceeding.

2. Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth), leave be granted to amend the originating application by removing the second plaintiff.

3. The second plaintiff, Roberto Crispino, be discharged from any further liability for costs in these proceedings incurred after the date of ceasing to be a party, without prejudice to any liability incurred prior to this date.

4. The Defendant pay the First Plaintiff:

(a) the sum of $70,000 as a debt due;

(b) interest on the sum of $70,000 at the penalty interest rate as fixed under s 2 of the Penalty Interest Rate Act 1983 (Vic) from 17 March 2026 to the date of these orders; and

(c) costs fixed in the amount of $13,000.

5. The proceeding be otherwise dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’BRYAN J:

1 The first plaintiff, Rix Electrical Contracting Pty Ltd (Company), was incorporated on 16 January 2018. Prior to its liquidation, the Company was in the business of providing domestic, commercial and industrial electrical services. The defendant, Rick Aitchison, is and was at all times the sole shareholder, director and secretary of the Company.

2 On 26 March 2025, at a general meeting of the Company, it was resolved that the Company be wound up and that Robert Crispino (the second plaintiff) and Richard Albarran (the third plaintiff) be appointed joint and several liquidators of the Company.

3 By originating application dated 4 December 2025, the Company and the liquidators commenced a proceeding against Mr Aitchison under ss 588G, 588M and 588FF(1)(a) of the Corporations Act 2001 (Cth) (Corporations Act). The originating application was supported by an affidavit sworn by Mr Crispino on 4 December 2025. The plaintiffs sought orders that Mr Aitchison pay to the plaintiffs:

(a) $424,378.75, being an amount equal to the debts incurred by the Company while insolvent, pursuant to s 588M of the Corporations Act;

(b) $386,641.92, being an amount equal to the payments made by the Company to Mr Aitchison which the plaintiffs allege are unreasonable director-related transactions within the meaning of s 588FDA of the Corporations Act, pursuant to s 588FF(1)(a) of that Act; and

(c) $387,055.53, being a debt owed by Mr Aitchison to the Company.

4 On 30 January 2026, the parties entered into a Deed of Settlement and Release (Deed) by which they agreed to resolve the issues the subject of the proceeding without admission of liability on the terms and conditions set out in the Deed. The terms were relevantly as follows:

(a) The Deed was conditional upon the liquidators obtaining approval to enter into the Deed pursuant to s 477(2A) of the Corporations Act by 17 February 2026.

(b) Mr Aitchison agreed to pay the sum of $70,000 (Settlement Sum) to the Company by 16 March 2026.

(c) Upon the payment of the Settlement Sum, the parties agreed to seek an order dismissing this proceeding, with no order as to costs.

(d) If Mr Aitchison defaulted on making payment of the Settlement Sum and the default remained un-remedied for 7 days after being given written notice of the default, then:

(i) the Settlement Sum less any payments already made by Mr Aitchison would become immediately due and payable by Mr Aitchison (Default Sum);

(ii) the liquidators and the Company may, at their absolute discretion:

(A) elect to reinstate and prosecute the original claims in the proceeding; or

(B) proceed against Mr Aitchison to recover the Default Sum without further notice to Aitchison and apply for summary judgment for: the Default Sum; interest at the penalty interest rate as fixed under s 2 of the Penalty Interest Rate Act 1983 (Vic) from the date of default to the date of a summary judgment; and the costs of obtaining judgment on an indemnity basis.

(e) In the event of default as referred to in paragraph (d), and for the purpose of the Company obtaining summary judgment, Mr Aitchison agreed and admitted that:

(i) the Default Sum is a debt due and payable to the Company and Mr Aitchison has no defence to a claim for the Default Sum;

(ii) the Deed may be produced to the Court as evidence of Mr Aitchison’s irrevocable consent to such judgment; and

(iii) an affidavit by the liquidators’ solicitors would be sufficient evidence that the default occurred, that the default notice had been served on Mr Aitchison and that the Default Sum is payable by Mr Aitchison to the Company and as to the amount of the Default Sum.

5 On 10 February 2026, a meeting of the Company’s creditors was held and the creditors resolved to approve the liquidators and the Company entering into the Deed.

6 Mr Aitchison did not pay the Settlement Sum on 16 March 2026 in accordance with the Deed. On 17 March 2026, the solicitor for the liquidators gave written notice to Mr Aitchison of his default and demanded that the default be remedied within 7 days. Mr Aitchison did not remedy the default by 24 March 2026 and, as at the date of the hearing on 7 May 2026, had not paid any part of the Settlement Sum to the Company.

7 On 30 March 2026, Mr Crispino resigned from his appointment as liquidator. Mr Albarran therefore became the sole liquidator of the Company.

8 At a case management hearing conducted on 2 April 2026, the liquidator foreshadowed an application to seek judgment for the Default Sum pursuant to the Deed. Mr Aitchison appeared by video. Orders were made for the filing of the foreshadowed application, for Mr Aitchison to file any responsive evidence and submissions, and the application was listed for hearing on 7 May 2026.

9 On 9 April 2026, Mr Aitchison filed a notice of address for service.

10 On 9 April 2026, the plaintiffs filed an interlocutory application seeking the following orders:

1.     Pursuant to r 9.08 of the Federal Court Rules 2011 (Cth), the second plaintiff cease to be a party to the proceeding.

2.    Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth), leave be granted to amend the originating application by removing the second plaintiff.

3.     The second plaintiff, Roberto Crispino, be discharged from any further liability for costs in these proceedings incurred after the date of ceasing to be a party, without prejudice to any liability incurred prior to this date.

4.     That summary judgment be entered into in favour of the Plaintiff pursuant to rule section 31A of the Federal Court of Australia Act 1976 (Cth) and rule 26.01 of the Federal Court Rules 2011 (Cth).

5.     That the Defendant pay the Plaintiff the sum of $70,000.

6.     Interest at the penalty interest rate as fixed under section 2 of the Penalty Interest Rate Act 1983 (Vic) from 17 March 2026 to the date of final orders made.

7.     Costs pursuant to contract, fixed in the sum of $12,773.25 including GST and disbursements.

8.     Alternative to 7, costs pursuant to statute.

11 The interlocutory application was supported by two affidavits.

12 The first is an affidavit affirmed by Bingqi Zhou, a solicitor at Aitken Partners (the solicitors for the plaintiffs) on 9 April 2026. Ms Zhou gives evidence concerning the Deed and Mr Aitchison’s default under the Deed, and the legal costs incurred by the plaintiffs since 17 March 2026 in obtaining judgment under the Deed on an indemnity basis.

13 The second is an affidavit of Mr Albarran sworn 10 April 2026. Mr Albarran gives evidence concerning Mr Crispino’s resignation as liquidator.

14 Mr Aitchison has not filed any evidence or submissions in response to the plaintiff’s interlocutory application.

15 At the hearing of the interlocutory application on 7 May 2026, Mr Aitchison did not appear. The plaintiffs read an affidavit of Erin Prout, a solicitor at Aitken Partners, made that day. The affidavit evidenced the following facts:

(a) on 24 April 2026, Brett Wiggins of Wiggins Legal, a solicitor representing Mr Aitchison, sent an email to Aitken Partners stating that Mr Aitchison would not be filing any evidence in the proceeding and intended to file for bankruptcy;

(b) on 6 May 2026, Mr Wiggins sent a further email to Aitken Partners advising that Mr Aitchison had filed a debtor’s petition that day; and

(c) on 7 May 2026, Ms Prout caused a search to be conducted on the National Personal Insolvency Index in respect of Mr Aitchison, but there was no record of Mr Aitchison becoming a bankrupt.

16 In light of the evidence adduced by Ms Prout, the plaintiffs’ interlocutory application was heard on 7 May 2026.

17 The relief sought by the plaintiffs in paragraphs 1 to 3 of the interlocutory application follow from Mr Crispino’s resignation as a liquidator and are uncontroversial.

18 The relief sought by the plaintiffs in paragraphs 4 to 7 of the interlocutory application are based upon the terms of the Deed, set out above.

19 Section 31A(1) of the Federal Court of Australia Act 1976 (Cth) provides:

(1)     The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)     the first party is prosecuting the proceeding or that part of the proceeding; and

(b)     the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

20 On the basis of the facts stated above, I am satisfied that Mr Aitchison is in default of his obligation to pay the Settlement Sum to the Company, and he remains in default notwithstanding notice of the default has been given to him. I am satisfied that the terms of the Deed entitle the Company to the relief sought in paragraphs 4 to 7 of the interlocutory application. I am satisfied that Mr Aitchison has no reasonable prospect of success in defending the interlocutory application brought by the plaintiffs.

21 Ms Zhou’s affidavit included the costs incurred by the plaintiffs from the date of Mr Aitchison’s default to the date of the affidavit, as well as an estimate of further costs that would be incurred. The estimate included an amount for considering any affidavit material filed by Mr Aitchison. Those costs were not incurred because Mr Aitchison did not file any affidavit material. However, the plaintiffs incurred further costs in corresponding with Mr Aitchison’s legal representative, Mr Wiggins, and preparing the further affidavit of Ms Prout. Taking all of those matters into account, I consider that an amount of $13,000 is a reasonable amount to award on account of indemnity costs.

Associate:

Dated:    7 May 2026