FCFCOA hands down decision as to setting aside orders

The Federal Circuit and Family Court has handed down a judgement dealing with a reinstatement application against a default judgement. In doing so, the Court set out a number of principles dealing with reinstatement.

The case had an unusual and complicated history. The FWC had earlier made orders for compensation. Upon non-payment, the Court had then made orders enforcing those earlier orders.

The employer then sought to set aside those orders. The Court dismissed the application. In the decision, Judge Given held at [16] that:

Whether or not to reinstate a proceeding is a discretionary power which requires the Court to consider whether or not it is in the interests of justice to do so,

The Court held at [17] that the following principles applied:

a) whether there is a reasonable excuse for the party’s absence;

(b) the existence and nature of any prejudice that might flow to the other party from the reinstatement, and how any such prejudice might be alleviated; and

(c) whether the application for reinstatement has a reasonable prospect of success in the substantive proceeding,

The employer submitted that he had not been in the mental and emotional position to deal with the normal day to day activities of professional and personal life.

The court rejected those submissions holding in particular at [29] that:

During cross-examination, Mr Galloway was at times evasive in the giving of his evidence. His evidence was simultaneously vague and self-serving. Mr Galloway gave answers by which he variously relied upon his status as a legal practitioner, but at other times sought to insist that his being a lawyer was of little consequence (in particular in relation to his compliance with Court orders). Mr Galloway claimed to have no knowledge (or at least no recollection) of a lawyer having appeared for him at the directions hearing on 29 July 2022.?

The Court continued to observe at [31] that;

It also emerged during cross-examination that despite claims that he had been unable to attend to the simplest tasks such as opening his emails, Mr Galloway had continued to operate his legal practice throughout 2022 and had acted as a solicitor representing clients in a variety of jurisdictions and types of hearings.?

Her Honour concluded at [46] that:

I am unpersuaded by his explanation that he was unable to focus on the subject matter of these proceedings or otherwise so incapable of managing his affairs that/because he was prevented from opening his emails. On balance, I am of the view that Mr Galloway took an ostrich-like attitude in this matter, burying his head in the proverbial sand, and assuming that if he paid the applicants (most of) their entitlements, and otherwise declined to engage, the proceedings might dwindle and discontinue

The court concluded at [52] that:

Having regard to the unpersuasive and unreasonable explanation for Mr Galloway’s absence at the hearing on 1 November 2022, that the respective prejudice to the parties is slightly greater to the applicants if the matter were to be reinstated, and the lack of an arguable case, the interests of administration of justice are not served by the proceedings being reinstated.

A copy of the decision can be found at Molina v Galloway (No 2) [2023] FedCFamC2G 310