Mitchell Eric Stewart, whose family own civil and demolition contracting firm Affective Group, was at Balgownie Hotel on the afternoon of December 20 when police surrounded him alleging he dropped a bag containing cocaine on the ground.

Stewart was taken to Wollongong Police Station for questioning however was allowed to leave without being charged.

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His lawyer, Jeff David, told Wollongong Local Court on Tuesday his client did not receive the notice to attend court the following month as the letter had been addressed and delivered to his parents' Balgownie home.

He said Stewart did not realise he'd been charged. Police paperwork indicated Stewart had been served with the court attendance notice.

Stewart subsequently failed to show up at court in January and was convicted in his absence on a single charge of possessing a prohibited drug and fined $500.

In court on Tuesday, Mr David asked for the conviction to be annulled and the case relisted for hearing so his client could defend the allegations.

Mr David told the court his client's fingerprints would not be on the bag of cocaine and CCTV footage from the pub would assist in proving his innocence.

"Police say my client dropped the bag on the floor and Mr Stewart is adamant he did not," Mr David said.

"I have spoken to a witness who said they saw a package on the floor before my client came inside the hotel.

"He is well-connected and it was the day of his family firm's Christmas party.

"He always intended to defend the charge."

Mr David said Stewart had also repeatedly told police his correct Mangerton address.

"My client is adamant he did not get a court attendance notice," Mr David said.

He formally entered a plea of not guilty on Stewart's behalf.

Magistrate Michael Stoddart agreed to overturn the conviction "in the interest of justice".

Stewart's case will return to court on April 14.