The New Zealand family of a woman who is fighting for her life after being doused in petrol and set alight have rushed to her bedside in Melbourne.

The incident is alleged to have occurred at 2am on Wednesday after a house party at the 32-year-old woman’s Werribee South home.

Neighbours told the Daily Mail Australia while the party had been rowdy, the noise had been kept to a minimum before all hell broke loose.

‘The last I heard of anything was when my mates left around 12 and the music was loud but definitely not blasting or anything,’ one neighbour said.

‘You couldn’t hear it in the house.’

Nearby residents were seen hugging on the street where a woman was allegedly set on fire. Photo / NCA NewsWire

A man at the scene who identified himself as the woman’s brother said the victim had got into an argument with a man and another woman.

He said she had been trying to defuse the situation when she was doused with petrol and set alight, Wyndham TV reports.

The woman was taken to The Alfred Hospital with serious, life-threatening injuries.

Two other people received minor injuries during the incident.

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Victoria Police confirmed on Wednesday afternoon a 43-year-old man and a 45-year-old woman, both from Werribee South, were continuing to assist them with inquiries.

A second female had been released without charge.

Michael Gauci, 43, is accused of attempted murder charges and appeared in the Melbourne Magistrates’ Court on Thursday after spending the night in police custody.

Michael Gauci's supporters leave Melbourne Magistrates Court. Photo / NCA NewsWire

He was flanked by two court security officers as he was led into the courtroom, pausing briefly to look at six loved ones sitting at the rear of the court.

His lawyer Anthony Malkoun told presiding magistrate Donna Bakos this was his client’s first time in custody and requested he see a doctor for “unspecified health issues”.

Police will allege a woman suffered life-threatening burns at about 2am on December 28 after Gauci “intentionally” set her on fire.

She was allegedly in the front yard of a home in Rivercoast Rd, Werribee South when the alleged incident occurred after a “dispute”, police say.

The Werribee South man has been charged with attempted murder, conduct endangering life, intentionally causing serious injury and recklessly causing serious injury.

Homicide detectives initially attended the scene after the first callout, but the arson and explosives squad later took over the investigation.

Gauci and two women were brought in for questioning after the alleged incident.

Later the same day, police said one of the women was released without charge, while a 45-year-old woman from Werribee South was released pending further inquiries.

A teenager was also taken to Sunshine Hospital in a stable condition with upper and lower body injuries and a man in his 40s was taken to The Alfred in a stable condition.

Gauci was remanded into custody and will next appear in court in March.

- Additional reporting, news.com.au