Qi, in the matter of S& Q Group Pty Ltd

Qi, in the matter of S&Q Group Pty Ltd [2026] FCA 85 is a Federal Court decision about default judgment in a broader company control dispute. The wider conflict involved ASIC records, whether a director appointment had been validly made, alleged misleading or deceptive conduct, and a later cross claim by the companies themselves against Mr Wei and two related entities for alleged breaches of directors' duties and related relief.

The key point is procedural. Kennett J was not conducting a final defended trial on the cross claim. The court had to decide whether the cross respondents' repeated failures to file proper defences, comply with orders and engage with the proceeding justified default judgment under r 5.23 of the Federal Court Rules 2011 (Cth). The court held that they did. Judgment was entered for the cross claimants for damages to be assessed, with costs and further case management directions.

The proceeding began with a dispute about who had been validly appointed as a director of the S&Q companies. Mr Qi said he became aware in early 2024 that he had been appointed as a director of each company. He alleged that documents recording that change, and purporting to contain his signature, had been made without his prior knowledge and filed with ASIC. The judgment identifies a Form 484 lodged on 22 March 2024 and says nearly all relevant forms were filed by AUGE Accounting and Ms Chen.

Mr Qi then filed the main proceeding on 22 April 2024. He sought declarations that he had not been validly appointed as a director by that Form 484, that Mr Wei had not ceased to be a director on 29 February 2024 and remained a director, that the Form 484 lodged by AUGE Accounting and Ms Chen be withdrawn from the registers, and damages for alleged misleading or deceptive conduct under section 236 of the Australian Consumer Law. The companies were joined as defendants so they could be bound by any orders requiring general meetings to elect new directors.

Orders were made for meetings of members of the S&Q companies, and those meetings were held. The matter was referred to mediation. Mr Wei did not attend the mediation, but an agreement was reached between Mr Qi, Ms Chen and AUGE Accounting that would require declarations and orders to rectify ASIC's database. The court noted that those orders had not yet been sought because Mr Wei had not stated his position in relation to them.

The judgment also records that Mr Qi was at some stage properly appointed as a director of the S&Q companies. After that point, the dispute widened. The companies themselves filed a cross claim on 5 June 2025 against Mr Wei and two entities of which he was a director, ANC International Holdings and Gongwei Holdings. The companies alleged breaches of directors' duties under sections 180 to 183 of the Corporations Act 2001 (Cth), involving a large number of transactions and agreements said to have been entered into on behalf of the companies. They sought declarations, compensation, damages, and orders for delivery up of login credentials for Xero software licensed by Mr Wei and Gongwei Holdings.

A useful way to read this case is to separate the underlying commercial dispute from the application that was actually before the court. The underlying dispute concerned the validity of ASIC filings, who was properly a director, and the companies' allegations that Mr Wei had breached directors' duties through numerous transactions and agreements. But the hearing before Kennett J on 4 February 2026 was not a final merits hearing on those issues.

Instead, the court was dealing with an interlocutory process filed on 5 November 2025 seeking default judgment on the cross claim. That distinction matters. The court did not need to decide, after a full contest of evidence, whether every alleged breach of duty had occurred. The court had to decide whether the cross respondents were in default under the Federal Court Rules and whether the history of non-compliance justified entering judgment rather than giving them more time.

The judgment sets out the timetable that had already been ordered. Orders made by a registrar on 16 May 2025 required a defence to the originating process by 6 June 2025, a cross claim by the S&Q companies against Mr Wei by 30 May 2025, and any defence by Mr Wei to the cross claim by 11 August 2025. The cross claim was filed on 5 June 2025. Mr Wei did not file his defence by the original deadline. Extensions were granted more than once, first to 27 August 2025, then to 19 September 2025, and then to 16 October 2025. No defence was filed.

The position of the corporate cross respondents was also poor. Gongwei Holdings had a notice of acting filed by Pancific Legal on 7 August 2025, and was ordered to file and serve any defence by 17 September 2025. Pancific Legal then filed a notice of intention to cease to act on 16 September 2025. No defence was filed, and Gongwei Holdings later remained unrepresented. ANC International Holdings had not officially come onto the court record through a legal representative at all.

There was also an affidavit filed on 1 August 2025 by Mr Wei, purportedly on behalf of ANC International Holdings and Gongwei Holdings, annexing a document entitled Defence of David Wei and another document apparently intended to be a cross claim by Mr Wei. The judge said the purported defence was missing its first page, was a discursive account of the history, did not expressly answer the pleaded allegations, and had not been formally filed as a defence. The purported cross claim had not been filed in its own right or pursued. In short, the court treated the proceeding as one in which no defence to the originating process or the cross claim had been filed to date.

The judgment specifically refers to rr 4.01, 5.22 and 5.23 of the Federal Court Rules 2011 (Cth), and the orders also relied on r 28.61 for the damages assessment referral. Rule 5.22 sets out when a party is in default. A party is in default if it fails to do an act required by the Rules or within the required time, fails to comply with a court order, fails to attend a hearing, or fails to prosecute or defend the proceeding with due diligence.

Rule 5.23 then allows an applicant to seek orders where a respondent is in default. Relevant options include an order requiring a step to be taken within a specified time, judgment for relief claimed where the court is satisfied the applicant is entitled to it, or judgment for damages to be assessed or another appropriate order. The court noted that the power is discretionary and should be exercised cautiously.

The judge adopted a recent summary of the principles from EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328. Those principles included that the discretion is to be exercised cautiously, that the rule should be administered sensibly with an appreciation that some delays are unavoidable, and that the court does not require the applicant to prove the whole claim by evidence at this stage. Instead, the court must be satisfied on the face of the pleading that relief could be granted. The judgment also referred to the importance of the particular facts and circumstances, the nature and extent of the non-compliance, whether the defaults were intentional, and the likelihood of the defaults being remedied.

Rule 4.01(2) was also important for the corporate cross respondents. The court noted that a corporation must not proceed other than by a lawyer unless there is a dispensation. ANC International Holdings and Gongwei Holdings had not obtained any dispensation and were not properly represented. That meant they had not responded to the cross claim in the way the Rules require.

Kennett J looked at the whole history of the matter rather than any single missed deadline. Mr Wei had been required to file a defence to the originating process by 6 June 2025 and a defence to the cross claim by 11 August 2025. He did neither. The deadline for the cross claim defence was extended repeatedly, but still no defence was filed. The filing of the interlocutory process for default judgment also did not prompt a proper response.

The court also took into account that Mr Wei had failed to attend the mediation, in breach of an order requiring him to do so, and that this had frustrated efforts by the other parties to resolve the principal proceeding by consent. That mattered because it showed a broader pattern of non-engagement with the proceeding, not just a technical pleading failure.

The explanations offered were not accepted as satisfactory. Mr Wei appeared in person by video link and said he had provided Alton Legal with the necessary information and did not know why they had done nothing. He said Alton Legal had ceased acting, that he had sought other representation and had recently engaged Hallcross Legal, and he asked for an adjournment. But the court noted several difficulties. No written submissions had been filed for him. A written statement sent to the court just before the hearing was not in affidavit form and was not sworn or affirmed. Emails from Hallcross Legal suggested a possible consent to a guillotine order if the default judgment application was not pursued, but Mr Wei said he was unaware of the contents of that correspondence or what a guillotine order involved. Hallcross Legal had not filed a notice of acting.

As for the corporate cross respondents, ANC International Holdings had effectively taken no step at all. Gongwei Holdings had briefly had a solicitor on the record, but no defence was filed and it remained unrepresented. The court considered that a competent legal practitioner consulted by Mr Wei would at least have stressed that those companies needed to be formally represented if they were to resist the cross claim.

The judge then assessed the position against the relevant discretionary factors. The non-compliance with the orders for filing a defence to the cross claim was described as total. Almost six months had passed since the original deadline and no substantial progress had been made. No satisfactory explanation had been offered. Extensions had not been sought before the relevant times expired. The companies that could only act through lawyers had not obtained proper representation. The court regarded this as indicative of deliberate decisions not to engage with the proceeding. In light of that history, the court was not persuaded that the defaults were likely to be remedied in any timely way.

That is why the court concluded that the relief sought by the cross claimants should be granted. The judge expressly said he was not persuaded that anything other than more delay would be achieved by extending time further, even if the extension were accompanied by a self-executing order.

The court ordered, pursuant to r 5.23 of the Federal Court Rules 2011 (Cth), that there be judgment for the cross claimants in the cross claim filed on 5 June 2025, for damages in a sum to be assessed. That means the cross claimants succeeded procedurally on the cross claim, but the amount of damages still had to be worked out.

The court then used r 28.61 to refer the assessment of damages to a Registrar of the Court acting as a referee, for report by 30 April 2026. The cross respondents were ordered to pay the cross claimants' costs of the cross claim and the interlocutory process filed on 5 November 2025, as agreed or assessed. The proceeding was also listed for a later hearing after 15 May 2026 to consider adoption of the referee's report on damages and the disposition of remaining issues in the proceeding. The parties and the referee were given liberty to apply for further case management or timing orders.

So the judgment was decisive on the default issue, but it did not end every part of the broader dispute. The main proceeding still had unresolved issues, and the damages amount had not yet been fixed. That is important for readers. This was a strong procedural win for the cross claimants, not a final merits judgment on every issue in the litigation.

There are several practical points for business owners and directors. First, disputes about ASIC records can become much larger than a registry correction issue. Here, the dispute began with an alleged unauthorised director appointment and a Form 484, but it expanded into allegations about directors' duties, company transactions and control of Xero credentials. If your business discovers a disputed ASIC filing, gather the underlying resolutions, signed consents, communications with any accountant or lodgement agent, and records showing who authorised the filing. The ASIC record alone may not answer the real dispute.

Secondly, operational control matters as much as formal officeholder status. The cross claim sought delivery up of Xero login credentials. In practice, access to accounting software can mean access to the books, transaction history, payroll information and tax records. Businesses should make sure those systems are registered to the company, that more than one authorised company officer can access them, and that recovery processes are documented.

Thirdly, if litigation starts, do not assume that partial engagement is enough. A narrative document attached to an affidavit may not count as a defence. A company cannot simply rely on an individual to speak for it if the Rules require legal representation. If deadlines are slipping, seek an extension before the deadline expires and support that request properly. Courts may be patient with genuine and explained delay, but repeated non-compliance without a satisfactory explanation can lead to default judgment.

Finally, this case is a reminder that a procedural ruling can have major commercial consequences. Even where the underlying allegations have not yet been tested at a full trial, a party that does not engage properly can lose the chance to defend itself in the ordinary way and face a damages assessment and costs order.

The judgment was delivered on 13 February 2026. It records that the originating process was filed on 22 April 2024, the disputed Form 484 had been lodged on 22 March 2024, the matter was referred to mediation on 21 August 2024, the mediation occurred on 23 April 2025, the cross claim was filed on 5 June 2025, and the default judgment application was filed on 5 November 2025. The hearing of that application took place on 4 February 2026.

The orders required the damages assessment report by 30 April 2026 and contemplated a further hearing after 15 May 2026. This means the judgment explains the procedural outcome on the default judgment application, but not the final end state of the entire litigation.

This page is based on the Federal Court judgment in Qi, in the matter of S&Q Group Pty Ltd [2026] FCA 85, delivered by Kennett J on 13 February 2026. The judgment is detailed enough to explain the procedural history, the nature of the underlying dispute, the rules applied, and the outcome of the default judgment application.

The judgment does not provide a final defended determination of the underlying allegations about the ASIC Form 484, the alleged misleading or deceptive conduct claim, or each alleged directors' duties breach. It also does not fix the final damages amount, because damages were referred for assessment.