Justice Matthew Muir said the proceedings could go on "by way of substantive application".
"Should Mr Banks take no steps in relation to the substantive application, the matter will be determined in his absence.
"However Mr Banks is now to be given the opportunity to file any notification of opposition or affidavits in support."
Justice Muir gave Banks until July 14 to file a response to the proceedings. Shaw's lawyers will then have a further two weeks to respond before a date for a substantive hearing will be set.
Banks has so far refused to comment on the explosive allegations and not returned repeated calls, text messages and emails from the Herald.
Shaw, an English language teacher who lives in Japan with his wife and son, says the case is not about money but about certainty around his identity for him and his family.