Petrou v Vassiliadis

[2025] NSWCA 174

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Petrou v Vassiliadis [2025] NSWCA 174

Hearing dates:

25 July 2025

Date of orders:

1 August 2025

Decision date:

01 August 2025

Before:

Stern JA;
Free JA

Decision:

(1) Leave to appeal refused.

(2) The applicants are to pay the costs of the first respondent.

Catchwords:

CIVIL PROCEDURE – undefended judgment – setting aside – where respondent did not appear at hearing of proceedings – whether primary judge erred in describing the principles for setting aside an undefended judgment under r 36.16(2)(b) – primary judge did not err having regard to the transcript of the hearing as a whole

CIVIL PROCEDURE – undefended judgment – setting aside – explanation for non-attendance – whether primary judge erred in taking into account or giving inappropriate weight to the medical evidence – primary judge did not err

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Family Law Act 1975 (Cth), s 79

Supreme Court Act 1970 (NSW), s 101(2)(e)

Uniform Civil Procedure Rules 2005 (NSW), r 36.16(1), (2)(b), 36.16(3A)

Cases Cited:

AHB v NSW Trustee and Guardian [2014] NSWCA 40

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 2

Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61

Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164

Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2

House v The King (1936) 55 CLR 499; [1936] HCA 40

Jaycar Pty Ltd v Lombardo [2011] NSWCA 284

Macedonian Orthodox Community Church StPetkaIncv His EminencePetarthe Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42

McEvoy v Wagglens Pty Ltd [2021] NSWCA 104

Nguyen v Northern Sydney Local Health District (No 2) [2025] NSWCA 129

Pham v Gall (2020) 102 NSWLR 269; [2020] NSWCA 116

Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR (NSW) 239

Wakim v Senworth Capital Pty Ltd [2024] NSWCA 102

Category:

Principal judgment

Parties:

Peter Petrou (First Applicant)
Helen Petrou (Second Applicant)

Jim Vassiliadis (First Respondent)
Kali Vassiliadis (Second Respondent)

Representation:

Counsel:
Q Rares, S Hanscomb (Applicants)
F Maghami, T Ross (First Respondent)

Solicitors:
McEvoy Legal (Applicants)
Branston Neville Lawyers (First Respondent)
St. Clair and Associates (Second Respondent)

File Number(s):

2025/104274

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of NSW

Jurisdiction:

Equity Division

Date of Decision:

19 February 2025

Before:

Lindsay J

File Number(s):

2021/350671

JUDGMENT

1. THE COURT: By summons filed on 28 April 2025 Peter and Helen Petrou (the applicants) seek leave to appeal under s 101(2)(e) of the Supreme Court Act 1970 (NSW) against orders dated 19 February 2025 of Lindsay J (19 February 2025 orders) setting aside earlier orders his Honour had made on 18 November 2024 (18 November 2024 orders). The 18 November 2024 orders were made following a hearing at which the respondent, then the first defendant, failed to appear. The 18 November 2024 orders in substance constituted judgment in favour of the plaintiffs, albeit his Honour expressly reserved liberty to the first defendant to apply for the orders to be discharged or varied. The 19 February 2025 orders setting aside the earlier orders were made on condition that the respondent pay $120,000 into Court (on account of costs thrown away by the hearing having to be re-run and for the costs of the application to set aside the earlier orders on or before 21 March 2025). His Honour also ordered that the parties were not entitled to rely at the hearing of the matter on any evidence not already served, save with the leave of the Court.

2. The applicants’ contention, as set out in a draft notice of appeal, is that his Honour erred in failing “to find that the setting aside of the judgment was not in the interests of the proper administration of justice”. They say this is so for three reasons:

1. his Honour failed to take into account the material considerations of the non-financial prejudice to them;

2. his Honour wrongly took into account medical evidence, contrary to AHB v NSW Trustee and Guardian [2014] NSWCA 40, or otherwise gave that evidence inappropriate weight; and

3. his Honour applied the wrong test, being what “is the interest of the parties in the administration of justice” rather than “what is in the interests of the administration of justice” and in so doing failed to take into account the finality principle and in particular the general public’s interest in finality.

3. The discretionary power exercised by Lindsay J to set aside his earlier orders is found in Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 36.16(2)(b). That rule provides that the court may set aside or vary a judgment or order after it has been entered if it has been “given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order”. The rule does not specify how the discretion it confers ought to be exercised or expressly identify matters to be taken into account. As Leeming JA observed in Pham v Gall (2020) 102 NSWLR 269; [2020] NSWCA 116 at [2] (relying upon Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2 at [5] (Gaudron ACJ, McHugh, Hayne and Callinan JJ)), the meaning of the rule “depends on a background of concepts, principles, practices and circumstances that the drafters took for granted or understood, without conscious advertence, by reason of their common language or culture”. His Honour proceeded to explain in Pham v Gall at [43], [55]-[56], [102] that the discretion is encapsulated by the question whether there was “a real likelihood that it would be unjust to the defendant to allow the judgment to stand”, as held by Jordan CJ in Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR (NSW) 239. This involves at least consideration of whether any useful purpose would be served by setting aside the judgment and how it came about that the applicant found himself bound by a judgment regularly obtained (see also Payne JA in Pham v Gall at [92]-[102], McCallum JA agreeing).

4. Payne JA explained in Pham v Gall at [110] (Leeming and McCallum JJA agreeing) that:

“UCPR r 36.16(2)(b) provides an unfettered, though judicial, discretion. It is unwise to attempt to lay down rules of universal application in the exercise of that broad discretion which, as I have said, necessarily involves the Court in making a broad evaluative judgment”.

5. One of the arguments advanced by the applicants to justify a grant of leave is that this statement of principle by Payne JA exposed or created some uncertainty in the law. A related submission was that his Honour had erroneously drawn the notion of an unfettered discretion from the different context of the discretion as described by Jordan CJ in Vacuum Oil Pty Co Ltd v Stockdale in circumstances where the discretion must now properly be understood as being informed by the Civil Procedure Act 2005 (NSW).

6. Those submissions must be rejected. In describing the discretion conferred by the rule as “unfettered” Payne JA was not overlooking that there are principles that have been developed by the courts which provide guidance as to the manner of its exercise. Nor was his Honour saying anything in tension with the notion that the exercise of the discretion is informed by the objects of the Civil Procedure Act. There is no substance to the submission that Payne JA’s analysis became untethered from the statutory moorings.

7. His Honour used the words “unfettered, though judicial, discretion” at [110] to describe the discretion conferred in terms by r 36.16(2)(b) of the UCPR. That is a textually accurate description. After noting the uncontroversial proposition that it is unwise to attempt to lay down rules of universal application in the exercise of that discretion and the broad evaluative judgment it requires, his Honour proceeded to identify the kinds of questions that remain appropriate.

8. One such question is whether any useful purpose would be served by setting aside the judgment. A significant aspect of that is whether the applicant has at least a reasonably arguable defence: [99]-[102] (see also Wakim v Senworth Capital Pty Ltd [2024] NSWCA 102 at [62] (Griffiths AJA, White JA and Basten AJA agreeing)). As to this, the applicants conceded before Lindsay J that the respondent had an arguable case.

9. A further matter highlighted by Payne JA as appropriate for consideration in exercising the discretion under r 36.16(2)(b) is “how it came about that the applicant became bound by a judgment regularly obtained”.

10. In seeking to develop an argument that there is some tension in the authorities in this Court following Pham v Gall the applicants rely upon the recent decision of this Court in Nguyen v Northern Sydney Local Health District (No 2) [2025] NSWCA 129 and the Court’s emphasis there upon the power conferred by UCPR, r 36.16(1) being exercised “sparingly and with caution, having regard to the importance of finality of litigation”. That decision does not reveal any relevant conflict or uncertainty about the principles governing r 36.16(2)(b). There is no doubt that considerations of finality underpin each of the sub-rules in r 36.16. However, it is important to recognise that distinct considerations arise where a party who has participated in a hearing and suffered an adverse judgment seeks to have the matter revisited, as opposed to a situation where the judgment or order was made in the absence of the relevant party. That difference in context explains why the cases considering the exercise of the power under UCPR, r 36.16(2)(b) have something of a different emphasis.

11. As is well recognised, a House v The King (1936) 55 CLR 499; [1936] HCA 40 error must be established in order to challenge a discretionary judgment such as that made by Lindsay J on 19 February 2025. The applicants’ contention to the contrary must be rejected. Moreover, the weight to be given to the various relevant factors was a matter for his Honour: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 at [137]-[138] (Gummow ACJ, Kirby, Hayne and Heydon JJ); Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 at [20] (Bathurst CJ and Leeming JA). Both of these matters constitute substantial impediments to the applicants’ contentions in support of their application for leave to appeal.

12. Further, to obtain leave to appeal, the applicants need to demonstrate that the proposed appeal raises issues of principle, questions of general public importance, or an injustice which is reasonably clear in the sense of going beyond what is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [6], [32]-[39]). In an application involving a discretionary decision to set aside orders, an applicant for leave to appeal faces a very high hurdle: McEvoy v Wagglens Pty Ltd [2021] NSWCA 104 at [46] (Bell P and Payne JA).

13. Kali Vassiliadis filed a submitting appearance on 30 May 2025.

14. For the reasons set out below, leave to appeal should be refused, with costs.

The hearing on 18 November 2024

15. A thirteen-day contested hearing of proceedings brought by the applicants against the first respondent (who for convenience we will describe as the respondent) and Ms Vassiliadis, the daughter of the applicants and the ex-wife of the respondent, was due to be heard from 18 November 2024. The proceedings had been set down for hearing on 30 May 2024. On 30 October 2024, at the applicants’ request, there was a pre-trial directions hearing before Lindsay J at which his Honour confirmed the hearing date. This was in circumstances where, on 18 October 2024, the respondent’s then solicitor, Branston Neville Lawyers, had filed a notice indicating that it would cease acting for the respondent on 15 November 2024, the Friday before the hearing was to commence. At the hearing on 30 October 2024 the respondent was represented by counsel who told his Honour that the instructions at that stage of Branston Neville Lawyers were limited to providing prospects advice and that counsel were no longer retained for trial.

16. As at 15 November 2024, the respondent had not filed submissions, objections or a chronology in accordance with court orders. On 16 November 2024, he sent an email to both the tipstaff to Lindsay J and the applicants’ solicitor which said:

“To his honor, [sic]

I am unwell and unable to attend court this coming Monday, 18 November 2024.

I kindly request an adjournment as I have seen my doctor today. Please find attached medical certificate and a referral to my cardiologist from my doctor.

I look forward to hearing from you.

Kind regards,

Jim Vassiliadis”

17. The email attached a medical certificate from Dr Jeyaratnam at Putney Medical Practice, also dated 16 November 2024, which provided as follows:

“Mr Jim Vassiliadis has been feeling overwhelmed and unwell, and requires review with a cardiologist to check his cardiac status.

It is my medical opinion, given his medical history, that his court appearance on Monday 18/11/2024 should be adjourned until after cardiac review.

I have referred him to a cardiologist today.”

18. The attached referral to Dr Chandar, Cardiologist, also dated 16 November 2024 noted that the respondent was a new patient to Dr Jeyarathnam who stated that the respondent had been feeling “SOBOE [shortness of breath on exertion] and having some vertigo, fatigue and some chest heaviness when going for a walk” and that his blood pressure was 158/80 but he had not taken his blood pressure medications that day.

19. On 16 November 2024 the applicants’ solicitor responded by email to the respondent’s email, in both English and Greek, stating that it would be “ordinarily expected that you appear in Court and tell the Court why you say an adjournment should be granted” and that “[w]e want to tell you now that we oppose your request to adjourn the hearing”.

20. On 18 November 2024, the respondent failed to appear, whether in person or by legal representative. The hearing of the proceedings commenced and there was a short adjournment until midday, during which various messages were sent to the respondent unsuccessfully seeking to secure his attendance. Presumably in response to these messages, the respondent’s former lawyers sent an email to the tipstaff to Lindsay J, at about midday on 18 November 2024, passing on a message from the respondent that he had been advised that the hearing was to proceed that morning but that he had been unwell, was confined to bed rest and was not well enough to attend court or participate in the hearing that day. He sought an adjournment for three days on that account, and also because his aunt had passed away and he wanted to attend her funeral. That email was provided to Lindsay J. The applicants opposed any further adjournment. This was a matter his Honour later regarded as having some significance, given that the applicants made a conscious choice to proceed in the absence of the first respondent in circumstances where there was a risk that he would later seek to have any adverse orders set aside. The substantive hearing of the proceedings went ahead that day, although his Honour noted that the respondent could apply to set aside orders made in his absence.

21. The proceedings involved, essentially, claims of misappropriation by the respondent and Ms Vassiliadis of partnership monies (there having been, from 1998, a partnership between the applicants, the respondent and Ms Vassiliadis). The plaintiffs alleged that the misappropriated funds had been used by the respondent and Ms Vassiliadis, in part, to purchase properties for themselves at 425 Wisemans Ferry, Somersby NSW (the Somersby property) and 59 Victoria Street, East Gosford, NSW (the East Gosford property). Ms Vassiliadis had also instituted related, and overlapping, proceedings, which were to be heard at the same time, seeking orders under s 79 of the Family Law Act 1975 (Cth).

22. At the hearing on 18 November 2024 the applicants’ evidence was tendered (including pars [234] and [235] of an affidavit of the respondent sworn 24 April 2023) and having heard submissions from counsel for the applicants and Ms Vassiliadis respectively, Lindsay J made the 18 November 2024 orders. These included a declaration that the applicants had beneficial ownership of both the Somersby property and the East Gosford property, of which the respondent holds the legal interest, and consequential orders. His Honour also gave judgment for the applicants against the respondent in the amount of $3,449,694.149. Ms Vassiliadis submitted to those orders but reserved her right to enter a contest if application was subsequently made to set aside the orders. Lindsay J ordered that the respondent pay the costs of both the applicants and Ms Vassiliadis. His Honour granted the respondent liberty to apply for the orders to be discharged or varied.

Lindsay J’s decision to set aside the 18 November 2024 orders

23. On 2 December 2024, the respondent, who was again represented by Branston Neville Lawyers, filed a notice of motion seeking that the judgment be set aside pursuant to UCPR, r 36.16(3A) (although the substantive rule he relied upon was UCPR, r 36.16(2)(b)). The matter came on for hearing before Lindsay J on 19 February 2025. Both the respondent and the applicants relied upon affidavit evidence and written and oral submissions at that hearing, and all parties were represented by counsel. The respondent’s position was, in summary, that he had not attended the hearing on 18 November 2024 because of issues with his health and he also relied upon difficulties he had had in obtaining funding for the litigation, which led to Branston Neville Lawyers ceasing to act for him on 15 November 2024. As to the improvement in his position that had made his participation in a hearing now viable, the respondent relied upon an affidavit from his solicitor showing that he had paid monies on trust and had arranged to borrow money from a friend to fund the proceedings.

24. The applicants argued before Lindsay J that the respondent had not provided any good reason why he had not secured some form of representation for the hearing on 18 November 2024, and also relied upon evidence that they were concerned that they would not be able to recoup costs thrown away if the 18 November 2024 orders were to be set aside, that the stress of the hearing had had consequences for their health and that the first applicant had health issues which might make him unavailable if a new trial were listed.

25. At the conclusion of that hearing his Honour said (with emphasis added):

“I think the exchanges between bench and bar have … [made plain] the basis upon which I’m making these orders, so I don’t propose to deliver any reasons beyond what I have. But I will say that the notice of motion that was filed on 2 December was filed pursuant to a grant of leave that was reserved by me when I made orders on 18 November. The application made at that time was supported inter alia by reference to r 36.16 of the Uniform Civil Procedure Rules.

Having regard to the fact that the orders made on 18 November 2024 were made in the absence of the first defendant, the principles to be applied, I don’t think, were in dispute. The overriding question is what is the interest of the parties in the administration of justice, that taking into account the existence or otherwise of an arguable case to be presented by the first defendant, and his explanation for not turning up on 18 November. It seems to me that the discretion that I need to exercise would be a close-run thing if the first defendant did not come up with hard money to pay for the costs of the motion before the Court, and the costs thrown away by setting aside the orders of 18 November. However, if the sum of $120,000 is paid into court on account of the costs of the parties affected by the setting aside of the orders, it seems to me that that tips the balance in favour of a grant of orders for the setting aside of the orders.

I’ve endeavoured to express, in broad terms, what I hope has earlier been conveyed to the parties in exchange between bench and bar.”

26. A significant flaw in the applicants’ argument in this Court was their attempt to treat the first two paragraphs in this passage as constituting a complete statement of the reasons for judgment of Lindsay J. That is not a proper characterisation of the record. His Honour made plain, in the two emphasised statements, that he was not purporting in that brief summary to provide a comprehensive statement of his reasons. To the contrary, his Honour relied on the exchanges that had occurred between bench and bar as having already exposed the basis upon which his Honour was exercising his discretion to make the 19 February 2025 orders. A fair assessment of the matters that his Honour took into account, and of the reasons leading to the ultimate conclusion, must therefore take account of the entirety of the exchanges that occurred on 19 February 2025.

27. A related and significant point is that the applicants, who were represented by senior counsel on 19 February 2025, did not cavil with this approach or seek a more formal statement of his Honour’s reasons. To the extent that now presents difficulties for the applicants in discharging their onus of demonstrating error on the part of the primary judge, that is a problem of the applicants’ own making. At the hearing of their application for leave the applicants sought to call in aid authorities dealing with an alleged failure to give reasons. That exercise was misdirected. The applicants do not allege that his Honour fell into legal error by failing to give adequate reasons. Nor could they have any basis to do so in the circumstances of this case. The principles sought to be invoked by the applicants relating to the duty to provide reasons do not assist in resolving the real issue in the present application, which is whether the applicants have demonstrated error in light of what the record shows about the matters taken into consideration and the principles applied by his Honour.

28. Given the contentions which the applicants now make, the following aspects of the exchanges between bench and bar on 19 February 2025 are of particular relevance:

1. it was accepted at the hearing that the respondent had an arguable case and Lindsay J characterised the "real question" as "was there a proper explanation for the no-show, and what discretionary factors would be involved if the orders were to be set aside";

2. his Honour said that:

“At the end of the day, the question is the proper administration of justice.”

His Honour added that the case law shows that that is the “head concept”, and then there is “good arguable defence and explanation”;

3. as to the reason for the respondent not attending the hearing on 18 November 2024, his Honour noted that "the medical certificates were pretty poor" and that "the weakness of the medical certificates gives colour to the possibility that there was a Machiavellian purpose on the part of the first defendant in not turning up.";

4. his Honour noted that the respondent was aware that the matter would proceed on 18 November 2024;

5. his Honour later reiterated that "the ultimate question is the interests of justice – and a subset of that is good and arguable – defence, or good and arguable case, and explanation for delay … [i]t's whether it's an explanation that goes to the justice of the case". Counsel for the applicants’ agreed with this analysis. His Honour restated this later during the hearing stating that the question for him was:

“what is the justice of the situation or, more accurately … what does the administration of justice require”;

6. his Honour later said he had to make a “cold assessment of what in the interests of justice should be done”;

7. his Honour suggested to the parties that, even if the motion was dismissed, the respondent may then seek leave to appeal and, subject to the result on appeal, that may produce more delay in the proceedings. Counsel for the applicants submitted that "the spectre of appellate intervention should not be dispositive of the outcome of this application" and Lindsay J agreed that it was not;

8. counsel for the applicants submitted that non-financial prejudice would also be inflicted on the applicants if the orders were set aside, including because Mr Petrou was suffering from a condition that is a precursor to leukaemia which may prevent him from participating in the proceedings. His Honour said in response: "I am conscious of all of that";

9. his Honour characterised the test he had to apply as “what’s in the interest of the administration of justice”;

10. his Honour characterised the order that $120,000 should be paid on account by the respondent as a condition of the orders being set aside as "fairly generously" dealing with costs thrown away, albeit that this was not a "primary" consideration in what was to be decided. His Honour later said that this condition that was critical to his conclusion; and

11. his Honour said "the case is marginal if one focuses on the absence of a better explanation, but I think the administration of justice will be best served if there's an opportunity for there to be a hearing on the merits" subject to the condition as to $120,000 being paid into court on account of costs.

29. As is clear, his Honour was well aware of, and applied, the principles, including critically whether it would be unjust to allow the judgment to stand, explained at [3]-[8] above. The applicants do not suggest that in referring to the interests of the administration of justice, or what the administration of justice requires, the primary judge applied any relevantly different test. The only complaint advanced by the applicants is that the primary judge misstated the test when he referred to “what is in the interest of the parties in the administration of justice”. As we explain below, that complaint focuses unduly on one formulation, and ignores the multiple indications that his Honour understood and applied the correct test.

Consideration of the applicants’ proposed grounds of appeal

30. The applicants’ first contention is that Lindsay J failed to take into account the material consideration of the non-financial prejudice to the applicants’ arising from the setting aside of the 18 November 2024 orders. That contention is unsustainable on the facts. At the hearing on 19 February 2025 his Honour confirmed that he had read the parties’ written submissions. The applicants’ written submissions had expressly referred to, and relied upon, prejudice which could be occasioned by the plaintiffs as identified in the evidence relied upon. That evidence (which ironically was not put in the form which the applicants now urge as essential for the Court to receive medical evidence) described Mrs Petrou as experiencing elevated blood pressure associated with significant stress and explained that Mr Petrou is suffering from a precursor to leukemia and may not be available for another trial.

31. The plaintiffs’ contentions as to non-financial prejudice were repeated in oral submissions before Lindsay J. After hearing submissions from senior counsel for the applicants addressed specifically to that topic, his Honour stated that he was “conscious of all of that”. In submissions to this Court, counsel for the applicants argued that this was not a reliable indication that his Honour understood the submissions and evidence about non-financial prejudice or that his Honour had regard to them as bearing upon the exercise of discretion. We reject that submission. It is plain from the context that in confirming his consciousness of the point made by the plaintiffs about non-financial prejudice the primary judge was indicating that he accepted the relevance of the point and took it into account as part of the overall evaluation of the justice of the case. That is reinforced by the subsequent indication that the exchanges with counsel had served to expose the matters informing his Honour’s deliberations. If the primary judge did not understand the point, or regarded it as irrelevant to the exercise of his discretion, he would not have given the indication that he did about being conscious of the matters the applicants relied upon. The weight to be given to those matters was, as is clear from the authorities set out above, a matter for his Honour.

32. The applicants’ second contention is that Lindsay J erred in taking into account or giving inappropriate weight to the medical evidence relied upon by the respondent. The applicants rely upon the judgment of this Court in AHB v NSW Trustee and Guardian at [4]-[5] (Macfarlan JA, Gleeson and Leeming JJA agreeing). In that case an unrepresented litigant had sought an adjournment of a hearing in this Court, relying upon a medical certificate which simply stated that he “is receiving Medical Treatment and is unfit for work/school from 5/03/2014 to 6/03/2014 [the date of the hearing being 5 March 2014] inclusive due to a medical condition”. In that context, Macfarlan JA said that:

“The Court will not ordinarily act on such a formulaic document and will require an explanation on oath from the medical practitioner of the illness and the reasons for the applicant’s inability to attend Court.”

33. Contrary to the applicants’ contention, AHB v NSW Trustee and Guardian does not mandate that his Honour should have refused to place any weight upon the evidence relied upon by the respondent in support of his application to set aside the 18 November 2024 orders. Nor did that decision dictate how much weight the primary judge could or should attach to evidence in a particular form. Macfarlan JA was not purporting to describe a fixed rule of law about the manner in which medical matters must be proved. Each case will depend upon its own facts.

34. Here the overarching question was whether the primary judge was satisfied that there was some explanation for the respondent’s non-attendance at the original hearing, and the veracity of that explanation. As part of that assessment the evidence adduced by the respondent was plainly relevant. The respondent’s affidavit identified that a general practitioner had ordered bed rest on account of his high blood pressure and also explained that he had in the past had a stroke. The medical certificate dated 16 November 2024 which the respondent relied upon identified that he was feeling overwhelmed and unwell and required cardiologist review, and that the general practitioner considered, in light of his medical history, that the hearing on 18 November 2024 should be adjourned until after the cardiac review. The referral of the same date to the cardiologist detailed the respondent’s high blood pressure and that he had not had his blood pressure medication that day, and also symptoms suffered by the respondent. Medical records before Lindsay J confirmed that the applicant had had a stroke in 2014, and clinical notes of an attendance by the respondent with a cardiologist on 18 December 2024 were also in evidence.

35. It was open to Lindsay J to have regard to this evidence and to give it such weight as he thought fit. As set out above, his Honour characterised the medical certificates as “pretty poor”. As his Honour said, the real question is “was there a proper explanation for the no-show”. Notwithstanding that his Honour described the medical certificates as “pretty poor”, we would infer that his Honour accepted that they provided an explanation for the respondent’s failure to attend the hearing on 18 November 2024. On the evidence before him, that finding was open. The applicants’ contention to the contrary is without merit.

36. The applicants’ third contention is that Lindsay J erred because, at the conclusion of the hearing, he described the overriding question as being “what is in the interest of the parties in the administration of justice”. The insertion in this formulation of the words “of the parties” was said to reveal an application of the wrong test and an associated failure to take into account the interest of the general public in finality. This contention must fail once regard is had the entirety of the transcript of the hearing on 17 February 2025. As we have already observed, there was no error in his Honour’s approach. His Honour was not required separately to articulate the interest in the finality of litigation in circumstances where, as here, that interest underscores both the principles that his Honour properly applied and the arguments that were advanced by the parties. Further, in raising the spectre of appeals, it is clear that his Honour was identifying that the interest in the finality of litigation might cut both ways on an application such as that before him on 19 February 2025.

37. The applicants also suggest that Lindsay J erred in treating costs as a panacea for prejudice. Any such contention must be rejected. The condition that the respondent pay money into court to meet costs liabilities went some way to meet the applicants’ contention before his Honour that the past and likely future inability of the respondent to meet costs orders caused them prejudice. His Honour correctly had regard to whether this aspect of the prejudice faced by the applicants could be ameliorated by the making of an order such as that which his Honour ultimately made. His Honour’s attention to this aspect of the debate cannot reasonably be read as implying that his Honour approached the exercise of discretion on the basis that it was sufficient merely to find a solution for the financial prejudice faced by the applicants, because the administration of justice has no other dimensions. The applicants’ reliance on the case management principles discussed in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 as supporting their contention of error is misplaced in this context. There is no error.

Conclusion

38. The application does not raise any issue warranting a grant of leave.

39. The applicants assert that the proposed appeal raises a question of principle, being whether the jurisdiction to set aside a judgment is “unfettered” or whether there are a number of factors that must be taken into account, being the interests of the plaintiffs, the interests of the defendants, the interests of the public in finality, the objects of the Civil Procedure Act and any other factor that it is in the interests of justice to consider. That argument proceeds from a misreading of Pham v Gall, as we have explained above.

40. The applicants otherwise contend that there has been a substantial injustice caused to them, warranting a grant of leave, because none of the factors they raised as relevant to the evaluation of the Court’s discretion were considered by the Court. That contention is based on a false premise, primarily because of the applicants’ erroneous attempt to characterise one passage in the transcript as the entirety of the primary judge’s explanation for his decision.

41. It otherwise follows from our analysis of the merits of their proposed contentions on appeal that leave to appeal should be refused. The applicants accept that costs should follow the event.

42. The orders of the Court are:

1. Leave to appeal refused.

2. The applicants are to pay the costs of the first respondent.

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Amendments

04 August 2025 - Representation details on coversheet amended to include T Ross as counsel for the First Respondent.

Decision last updated: 04 August 2025