Whether Mr Gu has provided explanations for his defaults and delay in bringing his application
11 In his first affidavit dated 25 August 2020, Mr Gu deposed that his lawyers filed a notice of intention to cease to act on 22 May 2019 because he owed fees which he was unable to pay. After his lawyers ceased to act, Mr Gu also ceased to participate in the proceeding. Specifically, he failed to appear at case management hearings conducted on 7 June, 19 July and 16 August 2019. When orders were made requiring him to file and serve a defence to the amended statement of claim by 27 September 2019, he also failed to comply. Mr Gu offered no explanation for his defaults other than that in May or June 2019 his lawyers in Sydney, Australian Business Lawyers & Advisors (ABLA) liaised with his former lawyers in relation to the transfer of the files relevant to the proceeding but he could not instruct new lawyers because the former lawyers asserted a lien over the documents until their outstanding fees had been paid. Mr Gu deposed that he "had other legal matters in 2019, including defending a winding-up application against AXF Group Pty Ltd" and "[d]ue to the limited funding available to [him] at the time, [he] could not afford to pay [his former lawyers]". The assertion that he could not afford to pay his former lawyers does not explain his failure to participate in the case management hearings in person, at the least. Nor does the fact that he had other legal matters on foot in 2019 excuse his non-involvement or justify a delay in participating in, or progressing his defence in, this proceeding. I do not accept that the excuses proffered by Mr Gu provide an explanation, let alone an acceptable explanation, for his defaults.
12 Mr Gu has also failed to provide an acceptable explanation for the delay in making the application to set aside the judgment, which, on any view, is inordinate. The order for default judgment was made on 25 October 2019. Yet the application to set aside the judgment was not filed until 26 August 2020. The delay cannot be put down to a lack of legal representation as ABLA filed a notice of appearance on his behalf in the proceeding on 11 November 2019.
13 Mr Gu's explanation for the delay was that he believed he would be able to resolve the proceedings with Mr Chan and endeavoured to do so. The explanation proffered does not withstand scrutiny. Even if Mr Gu had aspirations for resolving the proceeding, such aspirations were neither a sufficient nor an acceptable explanation for the delay until August 2020 for filing an application to set aside the default judgment. His evidence left wholly unexplained why he did not apply to set aside the default judgment until August 2020. In particular, whilst he deposed to attempts to settle with Mr Chan in December 2019, his evidence was wholly silent as to whether negotiations continued in the new year or when they stopped. There was no evidence as to what steps were taken in 2020, if any, to attempt to resolve the matter, nor as to what steps Mr Gu took, if any, to make application to set aside judgment at the earliest available time. The delay of 10 months from the entry of default judgment against him called for an explanation, which he did not provide. The delay was inordinate in circumstances where Mr Gu received advice from solicitors in November 2019 regarding setting aside the judgment, and there is nothing in the evidence to show that Mr Gu acted at the earliest opportunity to apply to set aside judgment once it must have become apparent to him that his attempts at resolution were not successful. Accordingly, I do not accept that the length of the delay has been explained, let alone satisfactorily.
14 In oral submissions it was submitted for Mr Gu that the delay (at least in part) was occasioned by the complexity of the underlying factual matters, the fact that Mr Gu and his new lawyers are situated in Sydney, the fact that all conferences with Melbourne counsel are by telephone necessitated by the current COVID-19 pandemic, and the fact that English is not Mr Gu's first language and his instructions were not easily heard and comprehended over the telephone. It was submitted that the preparation of affidavit material has taken some time, largely by reason of those complications. The assertion of those matters from the bar table was most unsatisfactory and should have been deposed to in an affidavit or affidavits to enable those matters properly to be evaluated in considering whether they satisfactorily explain the delay. As those submissions were put without evidentiary support by way of affidavit, I place little weight on them.
15 Further, it was put that Mr Gu was hopeful that a resolution of Sovereign Point's dispute with Jhato would lead to a resolution of the claims against him as well and it would be unnecessary for him to incur the costs of an application to set aside judgment. Whatever wishful thinking Mr Gu may have had, it is not an explanation for the delay in bringing an application to set aside judgment.