Federal Court of Australia

Copeland (Liquidator) v Berry, in the matter of GCGroup Pty Ltd (in liq) [2026] FCA 867

ORDERS

THE COURT ORDERS THAT:

1.    Judgment be entered for the First Plaintiff against the Defendant, Michael Berry, as a debt due to the Second Plaintiff, GCGroup Pty Ltd (in liquidation), in the sum of $1,977,644.32.

2.    The defendant pay interest on that sum pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) at the rate specified in para 2.2 of the Interest on Judgments Practice Note (GPN-INT) dated 18 September 2017.

3.    The Defendant pay the Plaintiffs’ costs of and incidental to the proceeding as against the Defendant, including the interlocutory application for default judgment.

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

REASONS FOR JUDGMENT

Delivered ex tempore, revised from transcript

JACKMAN J:

1    This is an interlocutory application filed 9 June 2026 in which the plaintiffs seek orders for default judgment pursuant to r 5.23 of the Federal Court Rules 2011 (Cth) (the Rules) against the defendant.

2    The defendant (Mr Berry) was the sole director of GCGroup Pty Ltd (in liquidation) (the Company) from 12 March 2013 until the Company was wound up. The first plaintiff, Mr Brendan Copeland (the Liquidator) was appointed liquidator of the Company on 27 November 2024 (the Date of Liquidation). He has formed the view that Mr Berry caused the Company to trade whilst insolvent in contravention of s 588G(2) of the Corporations Act 2001 (Cth) (Act). An ASIC search of the Company identifies Mr Berry’s residential address as 5 Helena Street, Biggera Waters, Queensland, 4216 (the Biggera Address). On 3 March 2026, a letter of demand was sent to Mr Berry by email and post at the Biggera Address in respect of the Liquidator’s insolvent trading claims.

3    The proceeding was commenced by Originating Process which was accepted for filing on 1 April 2026 (the Originating Process). On 1 April 2026 the solicitors acting for the Liquidator engaged a licensed process server to personally serve the Originating Process and the affidavit of the Liquidator sworn on 30 March 2026 (collectively, the Originating Documents) on Mr Berry. On 7 April 2026, an attempt to personally serve the Originating Documents on Mr Berry was made at the Biggera Address, however the Originating Documents were not served because the process server spoke with a male occupant who said that he and another two friends had moved in three weeks previously. The process server also spoke with a female neighbour at 2/3 Helena Street, Biggera Waters, who said that Mr Berry had sold the property and moved out a month beforehand, and that new people had recently moved in.

4    An RP Data search found a listed address for Mr Berry and his wife, Ms Nicole Condilis, at 24 Daru Avenue, Runaway Bay, Queensland, 4216 (the Runaway Address). On 8 April 2026 and 14 April 2026, the licensed process server attempted to personally serve Mr Berry with the Originating Documents at the Runaway Address, but on both occasions Mr Berry was not at home. His wife, Ms Condilis, offered to take the documents but the licensed process server said he would come back.

5    On 17 April 2026, the licensed process server called Mr Berry on his mobile number and Mr Berry advised that he was in Townsville working until the following Tuesday and would call the process server when he returned. On or around 24 April 2026, the licensed process server spoke with Mr Berry on his mobile phone to arrange personal service of the Originating Documents. Mr Berry requested the process server meet him at 112 Pohlman Street, Southport, Queensland, 4216 to accept service of the Originating Documents. On 27 April 2026, the licensed process server personally served Mr Berry at 112 Pohlman Street, Southport, with the Originating Documents together with a letter informing him that the matter had been listed for a case management hearing at 9.30 am on 30 April 2026, and that he was required to attend.

6    Mr Berry failed to appear at the case management hearing on 30 April 2026. I made orders that the proceeding continue by way of pleadings and requiring the filing and service of pleadings and evidence by certain dates, including that Mr Berry file any defence by 28 May 2026. On 21 May 2026, the Liquidator’s solicitor posted a letter to Mr Berry at the Runaway Address enclosing a copy of the orders made on 30 April 2026 and informing him that he had been ordered to file and serve his defence by 28 May 2026.

7    On 5 May 2026, the Liquidator’s solicitor posted a letter to Mr Berry at the Runaway Address enclosing by way of service the plaintiffs’ statement of claim and placing him on notice that should his defence not be received by 28 May 2026, the plaintiffs would proceed to apply for default judgment against him without further notice. Mr Berry failed to file and serve any defence in accordance with those orders. On 2 June 2026, a licensed process server personally served Mr Berry at the Runaway Address with a letter from the Liquidator’s solicitor dated 29 May 2026 giving him one final opportunity to file and serve his defence within seven days of the date of the letter, failing which the plaintiffs were instructed to apply for default judgment without further notice. The process server, Mr Rodney Thistlethwaite, deposes in his affidavit sworn on 5 June 2026 that Mr Berry said to him words to the effect “Legal action is inevitable. I do not have any financial capacity to pay the matter.” On 22 June 2026, Mr John Kepreotes served Mr Berry by express post at the Runaway Address with the interlocutory application and the affidavit of Ms Suzie Rule affirmed on 9 June 2026, together with a letter informing him that the hearing had been listed at 9.00 am on 3 July 2026 and if he did not attend, orders may be made in his absence.

8    Mr Berry has failed to respond to any correspondence or provide any indication that he intends to file any notice of appearance or otherwise participate in these proceedings. The matter was called outside the court today and there has been no appearance by Mr Berry. The plaintiffs submit, and I accept, that Mr Berry has been afforded ample opportunity to defend the proceedings but has failed to do so.

9    Rule 5.23(c) of the Rules provides relevantly that where the court has ordered that the proceeding continue on pleadings (which I did on 30 April 2026), and a respondent is in default, an applicant may apply to the Court for an order giving judgment against the respondent for the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled.

10    In Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 at [13]–[14], Yates J said the following:

13    The power to give judgment against a defaulting party is undoubtedly discretionary. The discretion must be exercised cautiously. Where the defaulting party is a respondent to a pleaded claim, the giving of judgment for final relief on the application will deliver complete success to the applicant without investigation of the merits of the pleaded claim: ACOHS Pty Ltd v Ucorp Pty Ltd [2009] FCA 577 at [27]. There is no requirement that the act or acts of default be intentional or amount to contumelious conduct. There is no requirement that the act or acts of default result in inordinate or inexcusable delay. That said, such features, if present, will be relevant to the exercise of the Court’s discretion. So too will conduct that persuades the Court that the defaulting party is manifesting an inability or unwillingness to cooperate with the Court and the other party or parties to the proceeding.

14    Rule 5.23(2)(c) requires the Court to be satisfied that the applicant is entitled to the relief claimed in the statement of claim. This requirement has been interpreted as meaning that the Court must be satisfied that “on the face of the statement of claim” the applicant is entitled to the relief that is claimed. It is not a requirement that the applicant prove its claim by way of evidence. Put another way, the facts alleged in the statement of claim are taken to have been admitted: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [42]. If, on inspection of the statement of claim, the Court is satisfied that the applicant would be entitled to the relief sought then this requirement of r 5.23(2)(c) will be met: CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170 at [18]–[19]; Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [23]. The Court may permit further evidence to be adduced, but not evidence that would alter the pleaded case: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; 236 ALR 665 at [45], [48]–[50]; United Broadcasting International Pty Ltd v Turkplus Pty Ltd (No 2) [2010] FCA 1413 at [42]–[44]; Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352; 195 FCR 1 at [62]–[63].

11    Accordingly, the Court’s task on an application for default judgment of this kind is not to conduct a trial of the proceeding, but to determine whether the pleaded facts, if accepted, disclose a cause of action entitling the applicant to the relief sought. The statement of claim pleads, with sufficient particularity, each element of the plaintiffs’ insolvent trading claim. In summary, it alleges that:

(a)    the Company is presumed to be insolvent throughout the period from November 2017 to 27 November 2024 by operation of s 588E(4) of the Act;

(b)    alternatively, the Company was in fact insolvent within the meaning of s 95A of the Act from at least 26 August 2019 to the Date of Liquidation;

(c)    Mr Berry was a director of the Company at all material times from 12 March 2013 to the Date of Liquidation;

(d)    the Company incurred debts totalling $1,977,644.32 while it was insolvent during that period;

(e)    at the time the debts were incurred there were reasonable grounds for suspecting the Company’s insolvency; and

(f)    Mr Berry was aware, or a reasonable person in his position would have been aware, of those grounds and failed to prevent the Company from incurring those debts.

12    Those matters, taken as admitted, establish each element of liability under s 588G(2) of the Act, and entitle the Liquidator to the relief claimed pursuant to s 588M of the Act. Further, the procedural history demonstrates sustained non-compliance and a failure by Mr Berry to engage with the proceeding despite repeated notice. Accordingly, I make the above orders.

Associate:

Dated:    3 July 2026