Federal Court of Australia

Wei v S&Q Group Pty Ltd [2026] FCA 1685

ORDERS

THE COURT ORDERS THAT:

1.    The application for an extension of time and leave to appeal dated 12 August 2026 be dismissed.

2.    The applicants pay the respondents’ costs of the application.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

Introduction

1    This is an application by Mr Wei and two other entities of which he is a director (ANC International Holdings and Gongwei Holdings), collectively, the applicants. They seek an extension of time and leave to appeal from the orders of the primary judge made on 28 May 2026 in proceeding NSD486 of 2024 (primary judgment), in which his Honour declined to set aside his 13 February 2026 order granting default judgment to the respondents on their cross-claim against the applicants, with damages to be assessed (default judgment). The applicants also seek leave under s 500(2) of the Corporations Act 2001 (Cth) to commence and proceed with the appeal against the third respondent, which is in liquidation.

2    The parties filed written submissions, including submissions in reply by the applicants. I determined that it was appropriate for the application to be determined on the papers.

3    For reasons set out below, the application will be dismissed with costs.

Background

4    Mr Qi resides in the Peoples Republic of China. Around early 2024, he became aware that he had been appointed as a director of each of the S&Q companies (S&Q Group Pty Ltd, S&Q Asset Pty Ltd and S&Q Asset Management Pty Ltd). He alleged that documents recording this change and purporting to contain his signature had been made without his prior knowledge and filed with ASIC.

5    The S&Q companies were joined as respondents in order to subject them to any orders calling for a general meeting to elect new directors. Meetings of members of the S&Q companies were then held.

6    The proceeding was referred to mediation on 21 August 2024 and that mediation occurred on 23 April 2025. Mr Wei did not attend.

7    Mr Qi was then properly appointed as a director of the S&Q companies. Following his appointment, orders made by a registrar on 16 May 2025 provided for the filing of 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.

8    A notice of cross-claim and statement of cross-claim were filed on 5 June 2025. The cross-claimants were the S&Q companies. The cross-respondents were Mr Wei, ANC International and Gongwei. The S&Q companies sought declarations that Mr Wei breached his duties as a director under ss 180-183 of the Corporations Act 2001 (Cth); compensation; damages; and orders for delivery up of login credentials for software licenced by Mr Wei and Gongwei.

9    By an interlocutory process filed on 5 November 2025, Mr Qi and the S&Q companies sought default judgment on their cross-claim against Mr Wei, ANC International and Gongwei.

10    The interlocutory process was heard by the primary judge on 4 February 2026.

The default judgment

11    In the default judgment delivered on 13 February 2026 (Qi, in the matter of S&Q Group Pty Ltd [2026] FCA 85), the primary judge recorded Mr Wei’s lamentable non-compliance with orders as follows:

9    The notice of cross claim and statement of cross claim were filed on 5 June 2025. The cross claimants are the S&Q companies. The cross respondents are Mr Wei, ANC International Holdings and Gongwei Holdings. The S&Q companies seek declarations that Mr Wei breached his duties as a director under ss 180-183 of the Corporations Act 2001 (Cth) (the Corporations Act); compensation; damages; and orders for delivery up of login credentials for the Xero software licenced by Mr Wei and Gongwei Holdings. The alleged breaches of s 180(1), 181(1), 182(1) and 183(1) involve a large number of transactions and agreements which Mr Wei is alleged to have entered into on behalf of the companies.

10    Mr Wei had not filed his defence to the cross claim by 11 August 2025. Orders made by the Registrar on 22 August 2025 extended the time for filing to 27 August. No defence had been filed by 10 September 2025, and time was then extended to 19 September 2025. No defence had been filed by 2 October 2025, and time was then extended to 16 October 2025. No orders have been made extending the 6 June 2025 date by which Mr Wei was required to file his defence to the originating process.

11    As noted earlier, the cross claim was filed on 5 June 2025. A notice of acting was filed by Pancific Legal on behalf of Gongwei Holdings on 7 August 2025. On 22 August 2025, Gongwei Holdings was ordered by a registrar to file and serve any defence to the cross claim by 17 September 2025. However, Pancific Legal filed a notice of intention to cease to act on 16 September 2025. No defence had been filed by 2 October 2025, and time was extended to 16 October 2025. No notice of ceasing to act has been filed by Pancific Legal to date, however, Gongwei Holdings has since been unrepresented and no defence has been filed by it.

12    No orders were made with respect to ANC International Holdings, presumably because no notice of acting has been filed on its behalf and therefore it has not officially come onto the Court’s record.

13    On 1 August 2025 an affidavit of Mr Wei was filed, purportedly by ANC International Holdings (even though it was unrepresented and not on the record) and Gongwei Holdings. This affidavit annexed a document entitled “Defence of David Wei” and another document apparently intended to be a cross claim by Mr Wei against Mr Qi and other parties.

14    I have not been able to find any further references to the purported “Defence of David Wei” in the Court’s file. This document is missing its first page and is a discursive account of (seemingly) Mr Wei’s version of the history of the S&Q companies. It is not in the form of a defence, in that it does not expressly traverse the specific allegations in Mr Qi’s statement of claim, and it has not been formally filed as a defence. Nor has Mr Wei’s purported cross claim been filed in its own right or pursued in any way.

15    No defence to the originating process or cross claim has been filed to date.

16    On 5 November 2025 the S&Q companies filed an interlocutory process seeking default judgment against the cross respondents to the cross claim and that the principal proceeding be listed for hearing.

17    It appears that Mr Wei was unrepresented until 7 November 2025 when a notice of acting was filed by Alton Legal (although he informed the Registrar on 2 October 2025 that he had obtained a legal representative). On 3 February 2026 Alton Legal filed a notice of ceasing to act. No material was filed on behalf of Mr Wei in the proceeding during this period and no material has since been filed.

12    His Honour described what happened at the hearing in his reasons as follows:

19    Mr Wei did not file written submissions, although he was apparently represented by solicitors until 3 February 2026. He appeared in person by video link and submitted that he had provided Alton Legal with the necessary information and did not know why “[t]hey never did anything”. He informed me that Alton Legal had ceased acting for him on 21 January 2026; he had sought other representation and had recently engaged another firm of solicitors (Hallcross Legal); but they had not had sufficient time to respond to the material filed by the other parties. He sought an adjournment to allow his new representatives to file any necessary documents.

20    Just before the hearing, Mr Wei sent to the Court a written statement purporting to explain why there had been a delay in his response to the principal proceedings and the cross claim. The statement referred to him in the third person and may have been written for him by a person with legal training. However, it was not in the form of an affidavit and not sworn or affirmed by any person. He also provided copies of emails between Hallcross Legal and the solicitors for Mr Qi and the S&Q companies, in which it was said that he would consent to a guillotine order if they agreed not to proceed with their application for default judgment. However, Mr Wei professed himself to be unaware of the contents of this correspondence or what a guillotine order involved. This is one of several perplexing aspects of the proceeding. Another is that, having apparently agreed to act for Mr Wei, his solicitors left him to speak for himself at the hearing of the default judgment application. Yet another is that, as at the date of these orders, Hallcross Legal has not filed a notice of acting.

21    ANC International Holdings and Gongwei Holdings also did not file submissions. They appear not to have legal representation and have not sought any dispensation from the stipulation in r 4.01(2) of the Federal Court Rules 2011 (Cth) (FCR) that a corporation must not proceed other than by a lawyer. Mr Wei, as I understood him, did not purport to speak for them. The result is that ANC International Holdings and Gongwei Holdings have not responded to the cross claim in any way and did not appear at the hearing of the interlocutory process seeking default judgment.

13    His Honour then set out the relevant rules (rr 5.22 and 5.23(2)), and the relevant legal principles applicable, including (at [25]) this passage from the reasons of Burley J in EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328 at [14]:

14    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;

…

(Citations omitted.)

14    Under the heading “Consideration”, the primary judge declined to permit the cross-respondents more time to file their defences, explaining as follows:

27    Mr Wei’s defence to the originating process was to be filed by 6 June 2025 and the defences to the cross claim were to be filed by 22 August 2025. Mr Wei and the other cross respondents have failed to comply with either of these deadlines. Neither the repeated extension of the deadline in relation to the cross claim nor the filing of the interlocutory process has prompted the filing of defences. This is in circumstances where Mr Wei had failed to attend a mediation (in breach of an order requiring him to do so) and frustrated the other parties’ efforts to resolve the principal proceedings by consent.

28    These failures have not been explained in any satisfactory way. As far as I have been able to ascertain, ANC International Holdings has not taken any step to respond to the cross claim. Gongwei Holdings got as far as appointing a legal representative, but that representative filed a notice of intention to cease to act a few weeks later and nothing further has been done. Mr Wei, having engaged with the main proceeding to a limited extent, obtained representation for himself after the interlocutory process was filed and then parted ways with his solicitors before it came on for hearing. As noted above, Mr Wei informed me at the hearing that he had retained a new firm of solicitors; however, the fact that he then appeared for himself, the form of the material that he submitted and the fact that the new solicitors are not on the record leave me unconvinced as to the nature of that retainer. For example, a competent legal practitioner consulted by Mr Wei would, at least, have stressed to him that ANC International Holdings and Gongwei Holdings needed to be formally represented if they were to take any step to resist the cross claim.

29    If this history is considered by reference to the factors identified in Kim v Wang [2025] FCA 1244 at [18], the following conclusions emerge.

(a)    Mr Wei has not filed a defence in the principal proceeding, having been ordered to do so by 6 June 2025. He may have thought he had responded adequately by annexing his purported defence to the affidavit he filed on 1 August 2025, although its deficiencies are obvious; and this default does not seem to have been agitated at the case management hearings before the Registrar. Nevertheless, the principal proceeding has been in abeyance for a long period as a result of default by Mr Wei. Non-compliance with the Court’s orders in respect of the filing of Mr Wei’s defence to the cross claim has been total. Nothing substantial has been done and no satisfactory explanation has been offered. On no occasion has an extension of time been sought before the relevant time expired. Almost six months have passed since the original deadline and no progress has been made.

(b)    While it may be the case that Mr Wei has not been well served by his legal representatives in recent months, he waited until several deadlines had expired before retaining solicitors (and meanwhile does not appear to have done anything on his own behalf by way of filing documents). ANC International Holdings and Gongwei Holdings, which can only act through lawyers, have not obtained representation and have taken no steps to respond to the cross claim. This is indicative of deliberate decisions not to engage with the proceeding.

(c)    In the light of this history, it cannot be said to be likely that the defaults will be remedied in any timely way. ANC International Holdings and Gongwei Holdings are still unrepresented and the Court has no evidence about their decision making processes. Mr Wei claimed to have retained solicitors, but the nature of that retainer is presently uncertain.

30    These considerations have led me to the conclusion that the relief sought by the cross claimants should be granted. I am not persuaded that anything other than more delay would be achieved by extending the time for filing defences further, even if that extension were accompanied by a self-executing order.

15    His Honour made the following orders:

1    Pursuant to r 5.23 of the Federal Court Rules 2011 (Cth) (FCR), there be judgment for the cross claimants in the cross claim filed on 5 June 2025, for damages in a sum to be assessed.

2    Pursuant to r 28.61 of the FCR, the assessment of damages be referred to a Registrar of the Court acting as a referee, for report by 30 April 2026.

3    The cross respondents pay the cross claimants’ costs of the cross claim and the interlocutory process filed on 5 November 2025 as agreed or assessed.

4    The proceeding be listed for hearing on a date to be advised after 15 May 2026, for consideration of:

(a)    adoption of the referee’s report on the assessment of damages; and

(b)    disposition of remaining issues in the proceeding.

5    The parties have liberty to apply on 3 days’ notice for case management orders in connection with the final hearing.

6    The referee has liberty to apply for an extension of the time for reporting if necessary.

The primary judgment

16    The cross-respondents then filed an interlocutory process dated 27 February 2026 seeking to have the default judgment set aside.

17    The primary judge refused that application. See Qi, in the matter of S&Q Group Pty Ltd [2026] FCA 664.

18    The application to set aside the default judgment was sought explicitly under r 39.04 of the Federal Court Rules 2011 (Cth), which provides as follows:

39.04 Varying or setting aside a judgment or order before it has been entered

(1)    The Court may vary or set aside a judgment or order before it has been entered.

(2)    If an interlocutory application for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the Court may determine the application, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.

(3)    Within 14 days after a judgment or order is entered, the Court may on its own initiative set aside or vary the judgment or order as if the judgment or order had not been entered.

(4)    Despite rule 1.39, the Court may not extend the time fixed by subrule (2) or (3) of this rule.

(5)    Nothing in this rule affects any other power of the Court to set aside or vary a judgment or order.

19    Rule 39.05(a) gives the Court power to vary or set aside a judgment or order after it has been entered if “it was made in the absence of a party”.

20    The application was heard on 12 May 2026, and his Honour’s reasons dismissing it were published on 28 May 2026.

21    In his reasons, his Honour adopted the following summary of the proper approach to an application under r 39.04 from the reasons of the Full Court in Ashby v Slipper (No 2) [2014] FCAFC 67; (2014) 314 ALR 84 at [13]-[15] (Mansfield, Siopis and Gilmour JJ):

The exercise of the discretion to vary or set aside orders, including under r 39.04 FCR, is a power to be used only sparingly, with great caution and rarely, having regard to the public interest in the finality of litigation.

The discretion is exercised to cure injustice, particularly where it would otherwise be irremediable. Grounds upon which a variation can be made are varied. They include error, oversight, a misapprehension of the law, or a decision given in ignorance or forgetfulness of a statutory provision.

As Kenny J stated in Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]: “[i]n every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open”.

(Citations omitted.)

22    His Honour then explained that the application was to be dealt with under r 39.04(2), not r 39.05(a), that the cross-respondents did not point to any error or misconception in the default judgment, nor did they submit that the earlier procedural orders with which they had failed to comply with involved any lack of procedural fairness. His Honour concluded that the cross-respondents had not demonstrated the existence of any injustice arising out of the default judgment that required curing. His Honour’s reasons for so concluding were as follows:

5    One feature of the circumstances in which the default judgment came to be pronounced was that, at the time the application seeking that relief was filed and heard, neither ANC nor Gongwei was legally represented. Solicitors had been on the record for Gongwei between 7 August and 16 September 2025. ANC had at no stage been represented or filed a notice of address for service. Neither company had sought dispensation from the usual rule requiring a corporation to be represented by a legal practitioner. Technically, therefore, the default judgment was given in their absence and r 39.05(a) therefore provides an additional source of power to set it aside. A party who has suffered an adverse judgment given in its absence may, if there is a proper explanation for that absence and an arguable case on the merits, have a strong claim to have that judgment set aside. In Amirbeaggi as trustee of the bankrupt estate of John Mamdouh Hanna v Kamel (No 3) [2020] FCA 1202, the circumstances of the case led Yates J to set aside a default judgment even though the explanation for party’s absence was not adequate.

6    However, here, ANC and Gongwei were absent because they were not legally represented. They were not ignorant of the application for default judgment in that their director, Mr Wei, was also a party and was present at the hearing. Mr Wei is also the only witness for the cross-respondents on the present application and has not sought to give any separate explanation for the lack of engagement with the proceeding by ANC and Gongwei. Their non-appearance should therefore be understood to be an aspect of Mr Wei’s inadequate engagement with the proceeding. To the extent that there is a difference between the principles applicable to rr 39.04(2) and 39.05(a), therefore, I consider that it is the former that should be applied here.

7    The cross-respondents do not point to any error or misconception in the default judgment. Nor do they submit that the earlier procedural orders with which they had failed to comply involved any lack of procedural fairness. They therefore face a difficult task in seeking the exercise of a discretion which is to be exercised “with great caution” and “to cure injustice”. The default judgment was not premised on any view one way or another as to whether there was an arguable defence on the cross-claim and thus proceeded on the assumption that it was possible that such a defence existed; and it was delivered in the knowledge that, if not set aside, it would bring the cross-claim to a conclusion (save for the assessment of damages) and would in that sense cause irremediable prejudice to the cross-respondents. To conclude that the interests of justice require the default judgment to be set aside therefore requires something powerful, such as a compelling explanation for the default or a powerful case on the merits that was not before the Court when the default judgment was pronounced.

8    Mr Wei affirmed three affidavits on the present application. The first of these, dated 27 February 2026, dealt with his failures to adhere to court orders. He deposed as follows.

(a)    Initially he had some assistance in connection with the proceeding from solicitors retained by his wife (Dong Chen) and her accounting firm (Australia United Genuine Ethic Accounting Pty Ltd), which were parties to the proceeding, but this arrangement had to be discontinued due to potential conflicts arising and his wife and her firm ceasing to be parties.

(b)    In 2025 he was under significant financial pressure and did not have the financial resources to retain lawyers. He explained that from March 2024 to October 2025 he was enrolled as a full time student in a diploma course and none of the companies he operated were generating substantial income.

(c)    During that time, he was also facing “significant psychological stress arising from financial difficulties and the ongoing litigation”. This caused him “serious family issues, including disputes and emotional distress” between him and his wife.

(d)    He engaged a firm of solicitors to act for him in the proceeding in October 2025. That firm filed a notice of acting in the proceeding on 6 November 2025. He became frustrated with that firm and it filed a notice of intention to cease to act for him on 23 January 2026. On the same day, he approached another solicitor whom he had previously instructed in other matters on behalf of the cross-claimants (and who therefore had a potential conflict of interest), but that solicitor was unable to act for him because of the conflict. He had a preliminary discussion with his current solicitors on 30 January 2026 and retained them on 2 February 2026, two days before the hearing of the application for default judgment.

9    I am prepared to accept that Mr Wei had limited financial resources up to around October 2025 but infer that this was at least in part a result of his decision to continue in full time study rather than seek paid work in order to fund the litigation in which he was involved. He is by his own description an Australian Fellow Certified Practising Accountant with over 20 years of business experience, and may be assumed to have some earning capacity. He is also married to Ms Chen, who apparently runs an accounting firm. I also accept that being involved in the litigation as a self-represented litigant was stressful. However, that is far from unusual, and Mr Wei provides no detail as to how this affected him. For example, he does not assert that he required or received any medical attention for the stress that he was enduring. According to his evidence, that stress did not prevent him from commencing proceedings against the cross-claimants in the District Court of New South Wales on 8 April 2025 and maintaining them until 21 November 2025 (when they were discontinued, according to Mr Wei, because he intended to bring the same claims in the present proceeding).

10    As recounted in the reasons for the default judgment, the cross-claim was filed on 5 June 2025. Orders were made by consent extending the time for Mr Wei and Gongwei to file their defences on 22 August 2025 and the date for Mr Wei’s defence was further extended on 10 September 2025 and 2 October 2025. The last of these extensions was to 16 October 2025 and it was the failure to comply with this deadline (together, one assumes, with the lack of any response by ANC and Gongwei) that led to the filing of the application for default judgment on 5 November 2025. Mr Wei’s former solicitors apparently commenced acting for him some time in October 2025 and came on to the record on 6 November 2025. From around this time, therefore, Mr Wei was no longer representing himself and the circumstances referred to in the previous paragraph ceased to explain his failure to file a defence.

11    Mr Wei’s engagement with legal practitioners after October 2025 was noted in the default judgment (see at [17], [20]) and it was observed that he might not have been well served by the lawyers acting for him (at [29(b)]). The extent to which he had been let down by legal representatives, however, was not explored in any detail or supported by evidence other than Mr Wei’s assertions. The evidence on the present application does not take the point much further.

12    Mr Wei’s second and third affidavits on the present application were directed to the substantive merits of the cross-claim. Counsel for the cross-respondents did not put this point any higher than to say that there was evidence showing on a prima facie basis that the cross-respondents had “an arguable defence to the Cross-Claim”. Counsel for the cross-claimants accepted that there was an arguable defence to one aspect of the cross-claim. However, an arguable defence is no more than a starting point in the present circumstances. As noted above, the default judgment was not based on a perception that there was no arguable defence to the cross-claim. To justify the setting aside of the default judgment, it would be necessary for the cross-respondents to demonstrate something more: for example, that there was a complete answer to the cross-claim that had not been brought to the Court’s attention. In these circumstances, I have not found it necessary to recount the evidence and the submissions that were put concerning the strength of the cross-respondents’ substantive defence.

13    Recalling the language used in Ashby, the cross-respondents have therefore not demonstrated the existence of any “injustice” arising out of the default judgment that requires curing. The application to set aside the default judgment will therefore be refused with costs.

Relevant principles

23    A decision not to set aside a default judgment is interlocutory in nature, so leave to appeal is required.

24    Under the Rules, an application for leave is required to be filed within 14 days, unless time is extended: see rr 35.13 and 35.14 of the Rules.

25    Factors relevant to the exercise of the discretion to extend time include:

(1)    the length of the delay;

(2)    the explanation for it;

(3)    any prejudice to the administration of justice as a result of it; and

(4)    the prospects of the proposed appeal.

26    The test for whether leave to appeal should be granted comprises two questions, whether:

(1)    in all the circumstances, the decision is attended by sufficient doubt to warrant its being reconsidered by the Full Court; and

(2)    substantial injustice would result if leave were refused, supposing the decision to be wrong.

27    Before a court will overturn an exercise of discretionary judgment like this one, the kind of error identified in House v The King (1936) 55 CLR 499 must be established. That is, as Dixon, Evatt and McTiernan JJ said at 504-5:

It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.

Delay

28    The 14-day period under r 35.13 in this case expired on 11 June 2026. The present application was filed 2 months and 2 days late.

29    The delay is sought to be explained by the applicant’s solicitor, Mr Pan, in his affidavit dated 12 August 2026 as follows:

8    I am informed by the First Applicant, David Wei, and I believe, that in about May 2026 he retained Ms Natalie Lim of EXC Law in place of Mr Hallasso. However, in about late May 2026 he was informed by Ms Lim that EXC Law could not continue acting for the Applicants in this matter because they had identified a conflict of interest. Mr Wei is a director of the other two Applicants and is the person from whom I receive instructions on their behalves (sic).

9     On 11 June 2026, I received instructions from Mr Wei to act for the Applicants in this matter. When I received those instructions, I was informed by Mr Wei that Elliott Hyde SC had been briefed by Ms Lim to advise on the prospects of appealing the decision to dismiss the default judgment. I have instructions to waive privilege over the advice that the Applicants received in that respect.

10    After Mr Wei told me that Mr Hyde SC had been briefed, I had a telephone conversation with Mr Hyde SC in which we discussed the prospects of appealing the decision to dismiss the default judgment. In that conversation, Mr Hyde SC said words to the effect of, "I do not think there are any reasonable prospects of appealing the decision. The only possible ground I can think of is that they may not have served the affidavit in support of the crossclaim on the cross-respondents. Can you check whether that was done?"

11     After that conversation I spoke to Mr Wei, told him what Mr Hyde SC had said, and asked him if any such affidavit has been served. A short while later he forwarded an email to me serving an affidavit, which I then forwarded to Mr Hyde SC. Mr Hyde SC responded by saying the affidavit attached to the email was an affidavit in support of the cross-claim. Annexed hereto and marked "JP-4" is a copy of the email from Mr Hyde SC sent at 4:30pm on 11 June 2026 enclosing that chain of correspondence. In view of that email and the discussion I had had with Mr Hyde SC, I understood that the advice received from Senior Counsel was that there were no reasonable grounds of appeal.

12    On 3 July 2026, I filed a Notice of Acting for the Applicant in the First Instance Proceeding.

13    Annexed hereto and marked 'JP-5' is a copy of the sealed Notice of Acting.

14    On 29 July 2026, I briefed Mr Daniel Meyerowitz-Katz of Counsel in this and three other related proceedings concerning the Applicants and the Respondents, two of which are in this Court and one of which is in the Supreme Court of Victoria. I did not provide Mr Meyerowitz-Katz with a complete brief at that time in relation to the First Instance Proceeding.

15    On 4 August 2026, I briefed Mr Meyerowitz-Katz with a copy of all of the sealed court documents in relation to the cross-claim in the First Instance Proceeding, as well as the cross-claimant's submissions on damages dated 10 July 2026.

16    Annexed hereto and marked 'JP-6' is a sealed copy of the Notice of Cross-Claim and Statement of Cross-Claim.

30    As Wigney J said in Kennedy v Secretary, Department of Industry [2016] FCA 1251 at [64], “there must be a satisfactory explanation for the delay”; an explanation “should be provided for every part of the delay”; and failure to explain why the application was not filed within the fixed period may alone justify the refusal of an application for an extension of time, citing Sharman Licence Holdings Ltd v Universal Music Aust Pty Ltd [2005] FCA 802 at [38].

31    In this case, the purported explanation is no more than a recitation of events which shed little light on why it was that the application for leave to appeal was made more than two months late. It is not a satisfactory explanation of delay on any view, and I would refuse the application for an extension of time on that ground alone.

32    But in any event the proposed grounds of appeal are meritless. The learned primary judge made no error of the House v The King kind, or at all.

First proposed ground

33    The first proposed appeal ground is that the primary judge did not apply the correct test when determining whether to set aside the default judgment. It is sought to be contended that the primary judge erred in applying the approach to the question set out in Ashby, and that those principles “concerning” r 39.04 are applicable to “applications in general” not “applications to set aside a default judgment in particular”.

34    That is a curious submission when the cross-respondents’ application before the primary judge to set aside the default judgment was brought explicitly under r 39.04.

35    Before me, it was submitted instead that when determining whether to set aside a default judgment, the Court should have regard to: (1) whether there is a prima facie defence on the merits; (2) the explanation for the default; and (3) whether the default has caused irremediable prejudice to the plaintiff, citing Davies v Pagett (1986) 10 FCR 226 at 231-2; CCGF Holdings Pty Ltd v Coegi Group Pty Ltd [2020] FCA 1402 at [58]-[60].

36    But those cases are not to the point. They are principles applicable under r 39.05(a) when the applicant was an absent party, and thus had no opportunity to say anything by way of defence. In CCGF, for example, “[the applicant’s] explanation for failing to defend the proceeding is she was unaware of its existence until after the judgment was entered. She asserts that she cannot recall being served with any court documents. [Her husband] claims that he was suffering a mental illness and hid the existence of the proceeding from his wife”. See CCGF [2020] FCA 1402 at [4].

37    Here, as I have set out above, the primary judge considered and noted that where a judgment was entered in the absence of the parties, there may be a “strong claim to have the judgment set aside” under r 39.05(a) (at [5]). Having recognised as much, his Honour held (at [6]) that the second and third applicants had knowledge of the application for judgment under r 5.23 through Mr Wei.

38    His Honour also held that Mr Wei was the second and third applicants’ director and only witness and he declined to give any explanation for their non-appearance, and that their non-appearance “should … be understood to be an aspect of Mr Wei’s inadequate engagement with the proceeding” (at [6]). On this basis, the primary judge also dealt with the application against the second and third applicants under r 39.04(2).

39    There is no error of principle in that reasoning. His Honour was correct to apply the approach to the issue set out by the Full Court in Ashby because Mr Wei was present in court and had an opportunity to put his case, but declined to do so. In such circumstances, the exercise of the discretion to set aside orders, including under r 39.04, “is a power to be used only sparingly, with great caution and rarely, having regard to the public interest in the finality of litigation”. That is the correct approach in cases of this type and it is the approach his Honour took.

40    The first proposed ground is thus devoid of merit.

Second proposed ground

41    The second proposed appeal ground is that the default judgment should have been set aside because it was “irregular” – because the primary judge did not satisfy himself that, on the face of the statement of cross-claim, the cross-claimants were entitled to the relief sought, citing Monks v Pieman Resources Pty Ltd [2025] FCAFC 121 at [89], which says:

For the purpose of r 5.23 of the Rules, the Court needs to be satisfied on the face of the statement of claim that an applicant is entitled to the relief claimed, and that the Court has jurisdiction to grant that relief, but the facts as alleged in a statement of claim are deemed to have been admitted by a respondent …

(Citations and internal quotation marks omitted.)

42    The application made by the S&Q companies before the primary judge was made under r 5.23(2)(d), which provides that if a respondent is in default, an applicant may apply to the court for an order “giving judgment against the respondent for damages to be assessed”.

43    It was also submitted that the primary judgment was “irregular” because it was not “expressed in a form that the (sic) allowed specific causes of action in respect of which judgment was granted to be identified.”

44    As to the first point, the primary judge summarised the claims made in the cross-claim (see default judgment at [9], set out at [11] above) and expressly referred to the requirement that the court needs to be satisfied on the face of the pleading that the applicant is entitled to the relief claimed (see default judgment at [25], set out at [13] above), and he is to be taken to have had the requisite state of satisfaction on the face of the cross-claim.

45    The cross-claim alleges that Mr Wei, on numerous occasions, was responsible for or authorised on behalf of the various S&Q companies particularised money transactions with entities controlled by Mr Wei without first requiring or having in place an executed written agreement between the S&Q company and the payee; that such transactions were a breach of his duties as a director of the relevant S&Q company; that specified sums were not repaid as a result; and that the relevant S&Q company had suffered loss and damage. There were two other claims for breach of directors’ duties, one alleging that Mr Wei caused certain electrical works to be performed without ensuring that the contractor was properly licenced and that the works had to be re-done as a result, causing S&Q Group Pty Ltd loss and damage as a result. The other alleged that Mr Wei refuses to provide log-on credentials for software that belongs to S&Q Group Pty Ltd and S&Q Asset Management Pty Ltd.

46    As to the second point, it was not necessary for the primary judge to identify each specific cause of action in the manner contended for by the applicants. What relief, if any, the S&Q companies are entitled to on the assessment in respect of each of the pleaded causes of action (the allegations in respect of which are taken to be admitted) is a matter for the primary judge.

47    The second proposed ground is thus devoid of merit.

Disposition

48    The application for an extension of time and leave to appeal will therefore be dismissed, with costs.

Associate:

Dated:    10 November 2026