The Git support in BlueJ refuses to merge some conflicts: new file in local and remote, file modified locally/deleted in remote. In both cases the conflicting file can be removed locally to resolve the conflict, and the next merge (pull) attempt succeeds. However, this is suboptimal and doesn't follow the usual Git workflow; also, by doing a merge on the command line (which results in a conflict) it is possible to get into a state that BlueJ's own support cannot recover from.
I think BlueJ should allow the merge and then require the conflict to be resolved via a commit. If the file is new in both cases this means we need some way to resolve which file to accept. For the other case it is just a matter of choosing whether or not to delete the file before the commit.