Federal Court of Australia

Gladstone Region Aboriginal & Islander Community Controlled Health Service Limited v National Aboriginal Community Controlled Health Organisation (No 2) [2026] FCA 411

ORDERS

THE COURT ORDERS THAT:

1.    The whole of the proceedings be dismissed.

2.    The Applicants pay all of the Respondent’s costs of the proceedings to be fixed on a lump sum basis determined by a Registrar, unless otherwise agreed.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

WHEATLEY J:

1    The National Aboriginal Community Controlled Health Organisation (NACCHO) brings an application for default judgment against the Applicants, Gladstone Regional Aboriginal and Islander Community Controlled Health Services Limited and, Centre for Regional and Rural Aboriginal and Torres Strait Islander Health (the Applicants). Each of the Applicants is a member organisation of NACCHO.

2    By orders made by consent dated 9 December 2025, the Applicants were to give standard discovery in accordance with r 20.14 of the Federal Court Rules 2011 (Cth) (the Rules). This has not been done. As a courtesy to the Court, the Applicants’ solicitors have instructed town agents to appear on this hearing for default judgment, however, they have advised the Court that they have been unable to obtain instructions.

3    The issues to be determined on this default judgment application are:

(1)    whether the Applicants are in default such as to enliven the discretion of the Court for default judgment under r 5.23 of the Rules; and

(2)    if the discretion is enlivened, should the discretion be exercised to order that the proceedings be dismissed, in whole or in part, either immediately or on any other specified condition.

PRINCIPLES APPLICABLE TO DEFAULT JUDGMENT

4    Rule 5.23 provides that the Court may make certain orders where a party is in default. The Court may dismiss an applicant’s proceedings either immediately or on conditions if there has been default by the applicant: see r 5.23(1) of the Rules. A party is relevantly in default if they fail to comply with an order of the Court or to prosecute proceedings with due diligence: see rr 5.22(b) and (d) of the Rules. The power given by this rule is conditioned on only one circumstance, that there has been a failure of the other party to comply relevantly with an order of the Court. There is no requirement that the default:

(a)    be intentional or contumelious; or

(b)    cause or be in circumstances of inordinate and inexcusable delay; or

(c)    cause prejudice to the respondent:

see Monks v Pieman Resources Pty Ltd [2025] FCAFC 121 at [45] (Halley, Meagher and Wheatley JJ), with reference to Wilcox and Gummow JJ in Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388; [1990] FCA 745 at [395].

5    However, matters of delay, prejudice and the applicant’s conduct in the proceedings are usually important factors in weighing the discretion. The discretion conferred by r 5.23 is unconfined, except that a party must be in default: see Professional Administration Service Centres Pty Limited v Commissioner of Taxation (2012) 295 ALR 52; [2012] FCAFC 180 at [35] (Edmonds, McKerracher and Nicholas JJ).

6    As was observed by the Full Court in Service Centres at [38], the scope of this rule was not intended to convey an impression that any failure to comply with a procedural direction will appropriately result in the dismissal of the proceeding. On the contrary, the Rules must be administered sensibly and with an appreciation both of the fact that some delays are unavoidable and unpredictable, even by the most conscientious parties and their lawyers. However, it is not possible or desirable to attempt any exhaustive statement of the particular circumstances under which the power will be appropriately exercised.

7    The Full Court in Service Centres at [39] observed that in Lenijamar two situations were identified where the use of the power will generally be warranted: first, where a history of non-compliance indicates an inability or unwillingness to cooperate with the Court and the other party in having the matter ready for trial within an acceptable period, and second, where there is significant continuing default giving rise to undue prejudice and expense to the other party.

8    From the relevant authorities, Burley J in EB20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328 at [14] has recently summarised the principles, which I gratefully adopt as follows:

The principles relevant to the exercise of discretion under FCR r 5.23 may be summarised as follows:

(1)    the power invoked by the Applicants is discretionary, it should be exercised cautiously;

(2)    the discretion to enter a default judgment is enlivened when an applicant or cross-claimant applies to the Court for such an order and where a respondent is in default;

(3)    the rule must be administered sensibly and with an appreciation both of the fact that some delays are unavoidable, and unpredictable, by even the most conscientious parties and their lawyers, and of the likely serious consequences to an applicant of staying or dismissing a claim;

(4)    cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to cooperate with the Court and the other party or parties in having the matter ready for trial within an acceptable period provide an example where the exercise of the discretion may be appropriate;

(5)    the requirement imposed by FCR r 5.23 is not that an applicant prove by way of evidence the claim sought to be advanced; the requirement is that the Court needs to be satisfied on the face of the statement of claim that the applicant is entitled to the relief claimed. In this regard, FCR r 5.23 will be met upon the Court being satisfied that relief could be granted on the face of the pleading;

(6)    in addition to the facts alleged in the statement of claim, the Court may permit recourse to further limited evidence but may not admit evidence that would alter the case as pleaded;

see Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [20]–[25] (Flick J); Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 at [13]–[14] (Yates J); Secretary, Department of Health v Evolution Supplements Australia Pty Ltd [2021] FCA 74 at [10]–[15] (Burley J); Hugo Boss AG v Hardge [2024] FCA 1325 at [20] (Neskovcin J).

9    Finally, in this context, the matters which are usually relevant for consideration in the exercise of discretion were identified in Service Centres at [44]:

44    Under the umbrella of that overriding consideration fall a number of matters, although they are not intended to be exhaustive –

(i)    the nature of the default involved;

(ii)    the duration of the default and whether it is continuing;

(iii)    the circumstances in which the orders, in respect of which default has occurred, were made including whether the orders made accorded with the practice of the Court in making orders of that kind;

(iv)    the circumstances which occurred between the time of making the orders and the order for the dismissal of the proceeding, including whether any attempt was made by the defaulting party to amend or set aside the orders to accommodate or deal with these intervening circumstances;

(v)    whether the continuing default is occasioning unnecessary delay, expense or other prejudice or unacceptable burden on the respondent;

(vi)    the attitude of the applicant to the default and the Court’s judgment as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period;

(vii)    the stage that the proceeding has reached – whether they have only recently been commenced; whether it has been commenced for some time but not advanced due, in whole or in part, to the default; or whether the proceeding is in an advanced state ready or nearly ready for hearing;

(viii)    the likely disruption to hearing dates or, if not fixed, to setting the matter down for hearing at an early date;

(ix)    the consequences to the applicant of dismissing the proceeding.

Are the applicants in default?

10    NACCHO relies on the following and submits that the Applicants are in default.

11    On 9 December 2025, the Court ordered by consent (the December Orders) relevantly that, by 4.00pm on 30 January 2026, the Applicants were to give standard discovery in accordance with r 20.14 of the Rules. In addition to those discovery orders, orders were made for mediation to be completed by about mid-May, and if the matter did not conclude at that mediation, orders were made timetabling the matter for a final hearing for three days commencing on 1 December 2026.

12    Discovery is obviously an important step in the proceedings. Orders must be made for discovery: see r 20.12 of the Rules. This importance is also reflected by the parties’ consent to such orders. The parties do not have a right to discovery without an order of the Court, however once an order is made, the obligation to discover documents is ongoing: see r 20.20 of the Rules.

13    The evidence before the Court is that the Applicants did not give discovery by 30 January 2026. Further, as at the date of this hearing on 24 March 2026, the Applicants have still not given standard discovery. The solicitors for NACCHO wrote to the Applicants’ solicitors on 6 February 2026, observing that the Applicants had not given standard discovery and asked when it could be expected. No response to that correspondence was received.

14    The solicitors for NACCHO again wrote to the solicitors for the Applicants on 18 and 27 February 2026 concerning the Applicants’ default in providing discovery in accordance with the December Orders. In each letter the Applicants were asked when discovery could be expected. Each letter also made reference to the Applicants’ default and the possibility of NACCHO bringing an application for default judgment pursuant to r 5.23 of the Rules. The 27 February letter went further, by stating that instructions had been provided to bring an application for default judgment pursuant to r 5.23 if no response was received by 6 March 2026. Despite the letters of 6, 18 and 27 February, the Applicants did not engage with or respond to that correspondence.

15    NACCHO filed this application for default judgment on 11 March 2026, which was set for hearing today, 24 March 2026. At the time of filing the application for default judgment, the evidence of NACCHO’s solicitor was that neither he nor his client had received any response from the Applicants’ solicitors to the correspondence regarding discovery. However, the next day (provided in subsequent evidence), the Applicants’ solicitor did respond that they were having difficulty obtaining instructions from their client. This correspondence, however, was in response to NACCHO serving the default judgment application and affidavit material.

16    A few days later, on 16 March, the Applicants requested that NACCHO consent to an adjournment of the default judgment application for a week later, as the solicitor with care and conduct of the matter was overseas. Describing that correspondence as a request to consent to an adjournment may be somewhat generous. That is because the actual correspondence stated as follows:

Dear Colleagues,

I am unfortunately overseas next week. Would you be agreeable to seeking that the matter be rescheduled to a week later?

17    The description of the correspondence is because it was in circumstances where the Applicants’ solicitors did not hold instructions, which would also include not holding instructions to obtain or seek an adjournment. The correspondence did not suggest or seek to advance any application for leave to withdraw from the record. NACCHO declined to seek to have the matter rescheduled to a week later. This was on the basis that senior counsel was already briefed, available for the hearing and that no explanation or other evidence had been provided by the Applicants in relation to instructions held or to otherwise progress the proceedings, including by providing discovery.

18    Late last week, on 20 March, the Applicants’ solicitors advised the Court that he:

(i)    did not currently hold instructions from his clients;

(ii)    would be overseas at the time of the hearing;

(iii)    requested leave to appear at the hearing by Teams; and

(iv)    observed that as he held no instructions, his appearance was as a courtesy to the Court.

19    No further correspondence or evidence has been received from the Applicants.

20    The town agents who appeared as a courtesy today on the hearing of this application made no substantive submissions on the default judgment application.

21    There is no evidence that the Applicants have complied with the December Orders to provide standard discovery, either by 30 January or at all. As such, the precondition for exercising the power under r 5.23(1)(b) has been enlivened. There has been a failure by the Applicants to comply with an order of the Court, being the December Orders: see r 5.22(b) of the Rules.

22    As such, the Applicants are in default for the purposes of Div 5.2 of the Rules.

Should the proceedings be dismissed?

23    The discretion is unconfined, except that the party must be in default: see Service Centres at [35]. NACCHO has established that the Applicants are in default. It is not sufficient or appropriate for any failure to comply with a procedural direction to then dismiss the proceedings because of that default. Some delays are unavoidable despite best endeavours: see Service Centres at [38].

24    The previous default of the Applicants has been effectively remedied, by way of subsequent consent orders. However, the fact of the Court order having been made at a particular point in time, and those orders not being complied with at that time, before the vacation of those orders, by consent, is relevant to how the Applicants have conducted themselves in these proceedings. Those subsequent orders have vacated previous orders which were not complied with and set a new timetable. This has occurred on the following occasions.

25    On 12 May 2025, the Court ordered that by 10 June, the Applicants were to file and serve an amended originating application and a statement of claim. Other procedural orders were made for the filing of the defence and reply. There was non-compliance with order 1 requiring the amended originating application and statement of claim by 10 June 2025.

26    On 17 July 2025, NACCHO filed an interlocutory application seeking that the proceedings be dismissed, because of that default pursuant to r 5.23 of the Rules.

27    On 18 July 2025, the Applicants’ CEO provided an affidavit which explained that default and also relevantly stated that the Applicants “remain committed to participating in these proceedings in a timely and respectful manner and I sincerely apologise for the delay to the date”.

28    On 21 July 2025, by consent the Court ordered that the 12 May orders be vacated, and relevantly, by 5 August 2025, the Applicants were to file and serve an amended originating application and a statement of claim. Further timetabling orders for the defence and reply were also made. Those consent orders also contained orders as to costs payable by the Applicants to NACCHO in relation to its interlocutory application filed on 17 July 2025. Those costs were payable forthwith.

29    The Court file does not have an amended originating application filed on 5 August 2025 by the Applicants in compliance with the orders of 21 July. NACCHO quite properly accepted and provided to the Court a copy of the Applicants’ amended originating application which was dated 5 August 2025. That document, although described as an “amended originating process”, is not marked-up or in any other way identifies the amendments that are made to that document. It appears that was the basis upon which the document was rejected for filing, and the Applicants have not subsequently sought to file this document.

30    On 28 October 2025, again by consent, the Court ordered that the Applicants be granted leave to file and serve an amended statement of claim within two business days of the date of that order. It is apparent that the Applicants did comply with that order and file, on 29 October 2025 at 1.56 pm, an amended statement of claim. Also by the 28 October consent orders, the Applicants were ordered to pay NACCHO’s costs thrown away by reason of the amendment, forthwith.

31    The December Orders (also by consent) made detailed orders progressing this matter to mediation, and if necessary, to trial commencing on 1 December 2026. The first of the December orders is the order to give standard discovery, with which the Applicants have not complied. There is no application by the Applicants seeking to amend or extend the December Orders for discovery. There is no explanation by the Applicants for the non-compliance with the December Orders. That is in circumstances where the December Orders were made by consent. Having been made by consent, it is apparent that the Applicants were aware of the terms of the December Orders, agreed to the terms of that order, failed to comply with the terms of that order, and have not explained that failure.

32    The discovery which has been ordered by consent is necessary for the mediation and the trial, both of which have been timetabled. Discovery does not occur in this Court as of right; an order of the Court is required. The parties recognised and sought, by way of consent orders, that discovery was required in these proceedings. It was appropriate to make those orders.

33    The duration of this default is now more than seven weeks and is continuing. On the current timetable encompassed in the December Orders, the Applicants were required to file and serve their affidavit evidence by 27 March, that is, in three days. It is unlikely in these circumstances that there will be compliance with that order, however, it is not necessary to determine that.

34    If the timetable was to be pushed back by approximately seven weeks, the evidence of the Applicants and then that of NACCHO would not be completed by the time of the currently ordered mediation which is to take place in about mid-May. That is, the mediation would need, if the matter is to continue, to be also delayed.

35    In relation to the trial ordered to commence on 1 December, the orders do have some available time between the end of the mediation and the preparation of the court books, such that some slippage, although in no way to be encouraged, could be accommodated to retain the December trial dates. NACCHO quite properly accepted that this could be accommodated. However, the Applicants have not attended Court with instructions or provided any material to support any suggested amendment to this timetable. Further, there is no evidence from the Applicants as to when, or if, the default is to be remedied. From the evidence before the Court, it does not appear that the Applicants have made any attempt to amend the December Orders or to comply with those orders and provide standard discovery.

36    The Applicants’ solicitors have attended today by way of town agent as a courtesy. They have expressly advised the Court that they have been unable to obtain instructions. This is consistent with their last communication with the Court. NACCHO submitted that the inference to be drawn, particularly noting a sentence from the 27 February letter (to which the Applicants did not respond, see above at [14]) that “if the applicants do not wish to proceed with their claim, then the appropriate course is for the proceedings to be dismissed”, is that the Applicants do not wish to genuinely progress this matter to trial within a reasonable period.

37    In circumstances where the Applicants’ solicitors not only do not hold any instructions, but also have been unable to obtain any instructions, together with the matters stated in the February letter which advised the Applicants that NACCHO had given instructions to bring an application to have the proceedings dismissed, I accept the submission that an inference can be drawn that the Applicants do not wish to genuinely progress this matter to trial within a reasonable period. Those circumstances are relevant to the exercise of the discretion in accordance with Service Centres’ observations at [44].

38    The Applicant originally sought, by way of urgent interlocutory relief, that NACCHO be restrained by its directors, officers, servants or agents from putting to members for adoption a special resolution in relation to what was described as “the new constitution” at an extraordinary general meeting which was due to take place on 7 May 2025. That was the next day after the hearing of that urgent interlocutory injunction. The proceedings relied on matters of oppression under the Corporations Act 2001 (Cth).

39    Orders were not made as sought, but I made orders in an attempt to facilitate remote attendance and participation at that extraordinary general meeting (Gladstone Region Aboriginal & Islander Community Controlled Health Service Limited v National Aboriginal Community Controlled Health Organisation [2025] FCA 656). Those orders were expressed for NACCHO to use all reasonable endeavours to facilitate that remote attendance. The orders were made at about 11.00 pm the night before the meeting was to take place at 2.30 pm the next day.

40    By the amended statement of claim, the Applicants seek to continue to progress the oppression proceedings on a variety of bases. Those bases advance matters including allegations of non-compliance with the Court’s orders from 6 May 2025 which were made on that urgent interlocutory injunction application. However, there does not appear to be a pleading that there has been any kind of contempt. It is difficult to understand how such matters advance the claim for oppression.

41    If the proceedings are dismissed, there will obviously be consequences for the Applicants. However, although NACCHO may seek to argue other matters, there are no relevant limitation periods which any oppression proceedings sought to be advanced by the Applicants would be subject to: see Hylepin Pty Ltd v Doshay Pty Ltd (2021) 288 FCR 104; [2021] FCAFC 201 at [130] (Markovic, Banks-Smith, and Anderson JJ). Further, as observed in the interlocutory injunction judgment and above, the Applicants are members of NACCHO and as members they are able to participate in meetings and the functioning of NACCHO.

42    However, having made these observations, it is not appropriate to consider the pleadings any further on an application of this kind, being an application for the proceedings to be dismissed for default. It would not be appropriate to weigh in or consider the merits of the Applicants’ amended originating process, amended statement of claim or otherwise.

43    What is relevant, in addition to the matters identified from Service Centres at [44] to the exercise of the discretion, is the overarching purpose of the civil practice and procedure provisions from the Federal Court of Australia Act 1976 (Cth) (the Act) in Pt VB. The case management principles are relevantly embedded in s 37M and s 37N of the Act. Those provisions require the parties and the Court to act as quickly, inexpensively and efficiently as possible, and that necessitates the efficient disposal of the Court’s process and proceedings in a timely manner: see Fraser-Kirk v David Jones Ltd (2010) 190 FCR 325; [2010] FCA 1060 at [26] (Flick J).

44    After outlining the requirements of ss 37M(1), (2) and (3), Jagot J, then of this Court, in Western Bundjalung People v Attorney General of New South Wales [2017] FCA 992, observed that, “these provisions are not present in the Court Act for the purpose of mere ritual incantation”.

45    Jagot J went on to observe that the (at [7]):

...judicial system which provides justice according to law in a manner which is efficient, timely and at a cost which is proportionate to the importance and complexity of matters in dispute is essential to ... citizens, and the government of a democracy subject to the rule of law. If the judicial system is incapable of fulfilling these basic requirements, the rule of law, and thus the essential compact between the government and its citizens, is weakened.

46    I agree with and adopt those observations by Jagot J. Although those comments were made in the context of native title proceedings, the generality of these observations are not to be taken as ones limited to those kinds of proceedings. Certainly, the express terms of s 37M and s 37N contain no such limitations; they apply to proceedings in the Court generally.

47    I also agree with and adopt the observations of Edelman J, then of this Court, who emphasised in Lowden v Elliott Harvey Securities Ltd (No 3) [2016] FCA 869 at [11] that the resolution to which s 37M refers is a “just” disposition.

48    The Applicants must be aware of today’s application for default judgment, given their solicitors have appeared and have advised they have not been able to obtain instructions. The inference to be drawn is that the Applicants’ solicitors brought this application to the Applicants’ attention and were seeking instructions. The Applicants must also be aware of the requirements to have provided standard discovery from the December Orders. The Applicants have also been in previous default with the Court’s orders, although those have been remedied. However, on the previous default and NACCHO’s 17 July application, the Applicants actively engaged with NACCHO, adjusting the timetable and providing the affidavit of their CEO to explain the non-compliance. The Applicants have not done so on this occasion. This, in addition to the observations made above, also supports an inference that the Applicants do not intend to prosecute the proceedings with due diligence.

49    That would also support a basis for default by the Applicants under r 5.22(d) of the Rules. NACCHO does not expressly, in terms of their application, advance such an argument, and it is only necessary for the enlivening of the discretion for there to be one occurrence of default. The default relied on is noncompliance with the December Orders in relation to standard discovery. However, the observations and the inference that is drawn from the Applicants’ failure to prosecute the proceedings with due diligence does weigh in the exercise of the court’s discretion, and supports the orders sought by NACCHO.

50    Further, NACCHO is a charitable institution which administers Commonwealth grants for charitable purposes via its members. That is relevant in the circumstances of this case and whether or not it should have to continue with these proceedings in circumstances where the Applicants are no longer engaging with these proceedings and has not provided its solicitors with any instructions in relation to today’s application for default judgment. That is, not even instructions to seek an adjournment of this hearing. I am satisfied that the discretion should be exercised for the proceedings to be dismissed for all of the reasons outlined above.

CONCLUSION

51    The entry of default judgment in these circumstances, being an order that the proceedings be dismissed against the Applicants, who have materially failed to act in a manner that is consistent with the requirements of s 37M and s 37N without an adequate explanation, is giving effect to that overarching purpose. There is no explanation by the Applicants for its default. This is the second default of the Applicants’, and although the first was responded to and remedied, no such action has been taken by the applicants on this default which is continuing. This matter falls within each of the situations identified in Service Centres at [39].

Associate:    

Dated:    9 April 2026