ACN 603 710 274 Pty Ltd (in liq) formerly known as Klyp Australia Pty Ltd v Nabi [2026] FCA 1032
RA Law Group has obtained default judgment in the Federal Court for a liquidated company and its liquidator against a former director who ignored the proceedings from start to finish. The result: judgment for $4,024,511.51, plus pre-judgment interest of $591,466.83, bringing the total to $4,615,978.34.
The company, ACN 603 710 274 Pty Ltd (in liquidation), formerly Klyp Australia Pty Ltd, went into liquidation on 13 September 2024. Its liquidator, Steven Naidenov, sued the company’s former director, Gawad Nabi, on two fronts. First, a straightforward debt claim: the company’s Xero ledger carried a loan account in Mr Nabi’s name, sitting at $1,596,433.75 at the time of liquidation, made up of payments the company had made to him and money owed to the company that he had diverted to himself instead.
Second, an insolvent trading claim under s 588M of the Corporations Act, seeking recovery of $2,428,077.76 in debts, mostly ATO liabilities and unpaid superannuation, incurred while the company was trading insolvent from late 2020 onward.
Mr Nabi was served, was given multiple extensions to file a defence, and appeared to have a solicitor on record who was also notified of the proceedings. None of that led anywhere. No defence was ever filed. Neither he nor his solicitors turned up to a single directions hearing. The plaintiffs moved for default judgment, and the Court granted it.
Justice Derrington’s reasons are a useful reminder of how default judgment applications actually work: the pleaded facts in the statement of claim are treated as admitted once a defendant is in default, and the Court’s job is simply to check whether those admitted facts, on their face, make out each element of the causes of action pleaded. Here they clearly did.
On the debt claim, the Xero records were treated as prima facie evidence of the debt under s 1305 of the Corporations Act. On the insolvent trading claim, the liquidator relied on a detailed solvency report, pointing to an operating loss in FY21, mounting unpaid ATO debt, the company having stopped its ATO payment plan back in October 2020, negligible cash at bank, and an unsatisfied statutory demand for over $2.5 million. That evidence comfortably supported a finding of insolvency from 26 November 2020.
It is a strong result, and a clean illustration of two things worth keeping in mind: properly kept accounting records can carry real weight in proving a director’s loan account, and directors who think they can simply not respond to a well-pleaded claim are taking a significant risk. The matter can, and often will, proceed to judgment without them.
RA Law Group, led by Mr D Alexander, acted for the liquidator and the company in liquidation.