Eatertainment Group Pty Ltd v Curtis Family Developments Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2024 0111

EATERTAINMENT GROUP PTY LTD (ACN 639 827 188)	Applicant
v
CURTIS FAMILY DEVELOPMENTS PTY LTD (ACN 149 237 273) AS TRUSTEE FOR THE CURTIS FAMILY TRUST	Respondent

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JUDGES:	KENNEDY, WALKER AND ORR JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	15 August 2025
DATE OF JUDGMENT:	22 August 2025
MEDIUM NEUTRAL CITATION:	[2025] VSCA 193
JUDGMENT APPEALED FROM:	[2024] VSC 512 (Gardiner AsJ)

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CORPORATIONS – Appeal – Statutory demand – Where respondent issued two demands for payment for shop fit-out works for applicant’s restaurant – First demand subject of deed of settlement – Applicant raised new offsetting claim when applying to set aside second demand – Applicant claimed it relied on respondent’s misleading representations when entering into contract for fit-out works – Applicant claimed respondent agreed to only require payment for works after applicant was paid lease incentive by lessor – Whether applicant established a plausible contention requiring investigation as to new offsetting claim – Whether offsetting claim merely constructed in response to statutory demand – No plausible contention established by applicant’s evidence – Leave to appeal refused.

Corporations Act 2001 (Cth) s 459G; Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) s 18.

Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 330, applied; Energy Equity Corp Ltd v Sinedie Pty Ltd (2001) 166 FLR 179; Sceam Construction Pty Ltd v Clyne (2021) 64 VR 404, discussed.

PRACTICE AND PROCEDURE – Application by solicitor for leave to file notice that they cease to act for applicant – Leave granted – Application by company director for leave to represent applicant – Leave granted.

Supreme Court (General Civil Procedure) Rules 2015 rr 1.17(1), 2.04(1), 20.03(1); Civil Procedure Act 2010 ss 7, 8.

Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595, applied.

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Counsel
Applicant:		Mr G Pezaros, director of the applicant in person
Respondent:		Mr I Hristovski
Solicitors
Applicant:
Respondent:	Burch & Co Lawyers

KENNEDY JA
WALKER JA
ORR JA:

This application for leave to appeal relates to a statutory demand served by Curtis Family Developments Pty Ltd (‘CFD’) on Eatertainment Group Pty Ltd (‘Eatertainment’). CFD and Eatertainment had entered into a contract under which CFD would undertake the fit-out of premises to be occupied by Eatertainment. The contract provided that Eatertainment would pay all tax invoices issued by CFD within 14 days. CFD had rendered an invoice in relation to its work in the sum of $801,900, of which Eatertainment paid $100,000 but failed to pay the remainder; CFD eventually issued a statutory demand for payment of $701,900 (the ‘first statutory demand’).
Eatertainment sought to have the first statutory demand set aside. It alleged that there was a genuine dispute about the quality and value of the works performed and that it had offsetting claims in relation to certain equipment (the ‘first offsetting claim’). Eatertainment also alleged that Brett Curtis, a director of CFD, and George Pezaros, a director of Eatertainment, had entered into a verbal agreement to vary the terms of the contract on the basis that CFD ‘would not seek immediate payment of invoices’.
Eatertainment and CFD entered into a deed of settlement in relation to the first statutory demand, under which Eatertainment agreed to pay $716,900 to CFD. Eatertainment paid $5,000 as required by the deed, but failed to pay any further amounts. CFD then issued a further statutory demand for the sum of $711,900 (the ‘second statutory demand’).
Eatertainment then sought to have the second statutory demand set aside.[1] It did not seek to impugn the validity of the deed, or dispute the existence or quantum of the underlying debt for the invoice in question. Nor did it advance the first offsetting claim. Rather, it advanced a new offsetting claim, as follows:
(a)Mr Curtis, on behalf of CFD, had made two representations to Mr Pezaros that Eatertainment would not have to pay any invoices until it received funds from the landlord of the premises.
(b)Eatertainment had relied upon the representations in entering into the contract with CFD.
(c)CFD had acted inconsistently with the representations when it ceased working on the fit-out due to non-payment of its invoice. Thus CFD had engaged in misleading or deceptive conduct.
(d)Eatertainment contended that, as a consequence of the above, it had suffered loss or damage in the amount of $2,294,512, which it was entitled to offset against the amount claimed in the statutory demand.
[1]Eatertainment Group Pty Ltd v Curtis Family Developments Pty Ltd [2024] VSC 512 (‘Reasons’).
The judge concluded that it was arguable that Eatertainment was not precluded by the deed from asserting the existence of its new offsetting claim.[2] However, he was not satisfied that Eatertainment had established a plausible contention requiring investigation as to the existence of its new offsetting claim, in any amount. He considered that Eatertainment’s new offsetting claim was not bona fide, was spurious and had the hallmarks of being ‘merely constructed in response to the pressure represented by the statutory demand’.[3]
[2]Reasons, [122]–[123].
[3]Reasons, [123], [156].
Eatertainment now seeks leave to appeal the judge’s decision, on two proposed grounds:
(a)Ground 1 is that the judge erred in failing to conclude that Eatertainment had established its new offsetting claim. This ground was based on several distinct sub-grounds, alleging various errors on the part of the judge.
(b)Ground 2 is that the judge erred in finding that Eatertainment had not shown a sufficient basis for causation of loss and damage to it, by reason of Mr Curtis making the two representations, as a secondary basis for rejecting the offsetting claims.[4]
[4]For convenience, we will refer to the proposed grounds of appeal as grounds of appeal.
On 13 August 2025, two days before the application for leave to appeal was listed for hearing, Eatertainment’s solicitors advised the Court that they proposed to seek leave to file a notice that they were ceasing to act for Eatertainment. A formal application was filed on 14 August 2025. The application was supported by a confidential affidavit.
The Court heard the solicitors’ application at the commencement of the hearing on 15 August 2025 and granted leave to Madgwicks Lawyers to file a notice that they have ceased to act for the applicant pursuant to r 20.03(1) of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’).
Following that grant of leave, Eatertainment was unrepresented by a solicitor and thus, by reason of r 1.17(1) of the Rules, was not permitted to take any step in the proceeding. Mr Pezaros then sought leave to appear for Eatertainment on the application for leave to appeal. His application was not supported by an affidavit. Nor was there any evidence concerning the attitude of the other director of Eatertainment, Ms Eleanor Barratt, although Mr Pezaros informed us from the bar table that Ms Barratt was aware of his application and supported it. Mr Pezaros told the Court that, if he were granted leave, he wished to seek an adjournment of the hearing. He said that, if no adjournment was granted, he would seek only to rely on the written submissions filed by Eatertainment. Those submissions had been prepared and signed by senior counsel.
Having heard from the respondent, and having had regard to the principles set out in Worldwide Enterprises Pty Ltd v Silberman,[5] the Court dispensed with r 1.17(1) of the Rules (pursuant to r 2.04(1)) and granted Mr Pezaros leave to appear and represent the applicant at the hearing of its application for leave to appeal.
[5][2009] VSC 165, [20] (J Forrest J), quoted in Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595, 602 [39]–[41] (Weinberg JA, Bongiorno JA agreeing at 607 [74]); [2010] VSCA 17. See also Hoser v Pelley [No 2] [2023] VSCA 14, [10] (McLeish and Walker JJA, and Elliott AJA).
As foreshadowed, Mr Pezaros then sought to have the hearing of the application for leave to appeal adjourned. That application was not supported by any evidence. He submitted that an adjournment would enable Eatertainment to obtain legal representation so that it could advance its arguments effectively. Having regard to the overarching purpose of the Civil Procedure Act 2010, to which this Court is required to give effect,[6] we refused that application. In particular, we observe that the application was made on the day of the hearing and without any supporting material, in circumstances where the application for leave to appeal was filed more than 10 months ago, on 1 October 2024.
[6]See Civil Procedure Act 2010, ss 7 and 8. The overarching purpose is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute.
Eatertainment, through Mr Pezaros, then relied upon its written submissions.
For the reasons that follow, we would refuse leave to appeal.

Summary of facts

The parties agreed on most of the relevant facts, and the following summary is based on the parties’ agreed summary. However, as will become apparent, there are some factual matters in dispute. These are identified in the course of setting out the facts, so that the time at which the disputed facts were said to have occurred within the chronology is clear.
Eatertainment was incorporated by Mr Pezaros to operate a restaurant business in the Melbourne CBD. In mid-2021, it commenced negotiating a lease of premises with UEM Sunrise (La Trobe Street) Unit Trust (‘UEM’).
The negotiations with UEM included the negotiation of an incentive from UEM of $5,850,000 to finance the fit-out of the premises (the ‘Fit-out Works’), consisting of a rent-free period worth $1,170,000, and a contribution towards the fit-out costs of $4,680,000 (the ‘Fit-out Contribution’). On 9 November 2021, a lease was executed, which included provisions for the payment of the fit-out contribution by UEM to Eatertainment, in specified circumstances.
In early 2022, Eatertainment, through Mr Pezaros, began negotiations with Mr Curtis on behalf of CFD, which operated a shopfitting business. The negotiations concerned CFD performing the Fit-out Works.
We interpolate that, on the present application, Eatertainment alleges, and CFD denies, that in March 2022 Mr Curtis, on behalf of CFD, said to Mr Pezaros words to the effect that CFD was happy to perform the fit-out work on the basis that it would be paid once Eatertainment received the Fit-out Contribution from UEM (the ‘first representation’).
On 26 April 2022, Ross Archibald of Burch & Co, solicitors for CFD, emailed a draft fit-out contract to Alexander Panagiotidis of Andrew Pandeli & Co Lawyers, the former solicitors for Eatertainment. The draft fit-out contract included a provision for CFD to be paid within 7 days of issuing an invoice.
On 3 May 2022, Mr Panagiotidis responded to the 26 April email and requested that Eatertainment only be required to pay invoices once it was paid by UEM.
On 6 May 2022, Mr Archibald emailed Mr Panagiotidis stating that they had amended the draft fit-out contract to provide for payment terms to be 14 days from receipt of a tax invoice, as payment terms could not be open-ended to the extent that payment to CFD would only be made by Eatertainment upon payment from UEM.
On 13 May 2022, Mr Panagiotidis wrote to Mr Archibald and reiterated the request that the fit-out contract include a provision for CFD to be paid within three days of Eatertainment receiving the Fit-out Contribution from UEM.
We interpolate that, on the present application, Eatertainment alleges, and CFD denies, that on 13 May 2022 Mr Curtis, on behalf of CFD, again made an oral representation to Mr Pezaros to the effect that CFD would not require payment of its invoices under the fit-out contract until Eatertainment received a release of the Fit-out Contribution from UEM (the ‘second representation’).
On 14 June 2022, Mr Archibald emailed Mr Panagiotidis with an updated draft of the fit-out contract. Clause 4.2(b) of that draft provided for payment to CFD within 14 days of it issuing a tax invoice.
In response to the 14 June email, Mr Panagiotidis emailed Mr Archibald stating that the issued raised in Mr Panagiotidis’ email of 13 May 2022 had not been addressed and that Mr Panagiotidis would need to seek further instructions from Eatertainment.
On 15 June 2022, Mr Archibald emailed Mr Panagiotidis (and copying in Mr Pezaros and Mr Curtis) and restated that CFD was unable to agree to open-ended payment terms and indicated that CFD was prepared to agree to be paid within 14 days of issuing an invoice despite its usual terms that payment be made within 7 days.
On 27 June 2022, Mr Archibald, by way of email to Mr Panagiotidis (but not copied to Mr Pezaros or Mr Curtis), requested an update from Mr Panagiotidis as to Eatertainment’s comments on the draft fit-out contract.
On 28 June 2022, Mr Panagiotidis emailed Mr Archibald (and copying in Mr Pezaros) and stated that he had instructions to advise that Eatertainment was agreeable to the terms and would sign the proposed fit-out contract that week.
On 14 July 2022, Eatertainment and CFD executed a contract for the Fit-out Works (the ‘Fit-out Contract’), and CFD commenced performing the Fit-out Works.
The Fit-out Contract contained, amongst others, the following provisions:
(a)Eatertainment would pay the ‘Contract Sum’ in accordance with the ‘Payment Terms’ set out in the Fit-out Contract Schedule (cl 4.1);
(b)Eatertainment would pay all tax invoices issued by CFD within 14 days (cl 4.2);
(c)Eatertainment may withhold any disputed amount of the Contract Sum and CFD may suspend ‘Works’[7] pending a resolution of any dispute as to payment in accordance with clause 15 (cl 4.5(b));
(d)CFD may immediately cease delivering ‘Works’ if Eatertainment refuses to pay the undisputed amount of the Contract Sum within 7 days of a request to pay (cl 4.5(c)); and
(e)the Fit-out Contract embodied the entire agreement between the parties with respect to the subject matter of the Fit-out Contract and superseded and extinguished all prior agreements and understandings between the parties with respect to the matters covered by the Fit-out Contract (cl 16.3).
[7]The Fit-out Contract Schedule defines ‘Works’ to mean ‘[a] complete fit-out of the Site’.
On 14 October 2022, CFD issued Invoice No 2312 to Eatertainment, for $801,900, specifying a due date for payment of 28 October 2022. Eatertainment did not pay Invoice No 2312 within 14 days of the date of the invoice.
CFD did not provide any further Fit-out Works after 28 October 2022.
On 17 February 2023, CFD’s solicitors, Burch & Co, sent a letter of demand to Eatertainment’s solicitors demanding payment of Invoice No 2312, together with interest.
In or about April 2023, Eatertainment paid $100,000 to CFD.
We interpolate that, during the initial dispute about the underlying debt CFD claimed it was owed, Eatertainment contended that in June 2023 Mr Curtis and Mr Pezaros had made a verbal agreement to vary the Fit-out Contract on the basis that CFD would not seek immediate payment of invoices (the ‘alleged verbal variation agreement’). CFD and Mr Curtis denied any such variation agreement.
On or about 26 July 2023, CFD served Eatertainment with the first statutory demand, a creditor’s statutory demand in the amount of $701,900, being the unpaid amount of Invoice No 2312.
On 17 August 2023, Eatertainment commenced a proceeding (S ECI 2023 03716) (the ‘first application’), seeking orders that the first statutory demand be set aside. The first application was supported by an affidavit dated 17 August 2023 made by Mr Pezaros. In that affidavit, Mr Pezaros said that:
(a)there was a genuine dispute about the existence, validity and amount of the debt, on the basis that the Fit-out Works were not 60 per cent complete and were not up to the value of the work claimed in the invoice;
(b)Eatertainment had an offsetting claim in relation to equipment that was in the possession of CFD but for which Eatertainment had paid; and
(c)there was another reason why the statutory demand should be set aside, namely the alleged verbal variation agreement.
The first application was listed for hearing on 29 January 2024. On 29 January 2024, Eatertainment and CFD executed a deed of settlement (the ‘deed’) in respect of the first application. The deed provided for, among other things, payment of the amount of $716,900 by Eatertainment to CFD, by instalments. The Court made orders that the proceeding be dismissed with no order as to costs.
Eatertainment paid the first instalment of $5,000 payable under the deed, but made no further payments under the terms of the deed.
On 1 March 2024, CFD served Eatertainment with the second statutory demand in relation to monies owing under the deed in the amount of $711,900.
On 22 March 2024, Eatertainment (as plaintiff) commenced the proceeding against CFD (as defendant) seeking to set aside the second statutory demand under s 459G of the Corporations Act 2001 (Cth) (the ‘Act’). The application was supported by an affidavit of Mr Pezaros made on 22 March 2024. Eatertainment filed a further affidavit of Mr Pezaros dated 3 May 2024.
In the affidavit dated 22 March 2024, Mr Pezaros described, for the first time, the conversations he had with Mr Curtis in which he said Mr Curtis made the two representations:
In or about March 2022, I began discussion with Brett about the Paddle Battle project including the Lease and the Fitout Works. In those discussions, I informed Brett that the only funding for the progress of the Fitout Works was the Fitout Contribution money to be paid by the Landlord under the Lease. I informed Brett of the relevant terms of the Lease concerning the Fitout Contribution and the requirement that Fitout Works be performed to the satisfaction of the Landlord to facilitate the release of Fitout Contribution monies. In response, Brett said to me words to the effect that the defendant was happy to perform the Fitout Work for the plaintiff on the basis that it would be paid once the plaintiff received the Fitout Contribution money from the Landlord (First Representation). I said to Brett that this was great and it was really the only way we could move ahead given the plaintiff was reliant on the Fitout Contribution monies from the Landlord in order to progress the Fitout Works.
…
On or about 13 May 2022, I had a telephone call with Brett in which I told him that the plaintiff could not run the project based on the payment terms insisted upon by the solicitors for the defendant. I reminded Brett that he had told me the defendant was happy to perform the Fitout Work for the plaintiff on the basis it would be paid once the plaintiff received the Fitout Contribution money from the Landlord. Brett reiterated to me that the defendant was still prepared to do this despite the payment terms stated in the fitout contract. Brett said to me words to the effect that I should not worry about this and that he and I would manage this together and progress the project so that the Landlord paid the Fitout Contribution monies to fund the Fitout Works [the second representation]. After we had this conversation, I did not revisit the payment terms issue again as I was comforted by what Brett had said and believed the defendant would nevertheless perform the Fitout Works until payment of the Fitout Contribution was released by the Landlord.[8]
[8]Emphasis added.
CFD filed an affidavit of Mr Curtis made on 15 April 2024. He denied that he made the alleged representations.

In the further affidavit made on 3 May 2024, Mr Pezaros reiterated his account of the conversations he said occurred in March 2022 and on 13 May 2022. He also referred to the solicitors’ correspondence concerning the term in the contract for payment of invoices within 14 days. He said he explained why he was ‘not concerned about’ this, ‘in light of the [second representation], where Brett told me that it did not matter what the written contract said, [CFD] would nevertheless perform the Fitout Work … on the basis it would be paid once [Eatertainment] received the Fitout Contribution money’ from UEM.
The hearing proceeded before Associate Justice Gardiner on 4 July 2024. At the hearing, Eatertainment asserted that it was entitled to set aside the second statutory demand on the basis that it had an offsetting claim under s 459H of the Act, the amount of which exceeded the statutory minimum. The basis of the offsetting claim, as alleged by Eatertainment, was that:
(a)CFD, by Mr Curtis, had made the first representation and the second representation to Mr Pezaros in March 2022 and on 13 May 2022, respectively, to the effect that CFD would not require payment of its invoices under the Fit-out Contract, until Eatertainment received a release of the Fit-out Contribution from UEM under the lease;
(b)Eatertainment had relied on the representations in entering into the Fit-out Contract;
(c)CFD’s conduct in ceasing to provide Fit-out Works unless it was paid in full for its invoice was inconsistent with the representations, with the effect that it had engaged in misleading or deceptive conduct within the meaning of s 18 of the Australian Consumer Law;[9]
(d)Eatertainment had suffered loss and damage as a result of CFD’s misleading or deceptive conduct, in an amount which exceeded the amount of the second statutory demand; and
(e)Eatertainment was not precluded by the terms of the deed from asserting the existence of its offsetting claim.
[9]Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’).
As noted above, Mr Curtis had denied making either of the two alleged representations.

Ground 1: Had Eatertainment sufficiently established an offsetting claim?

The judge’s reasons

The judge set out in some detail the evidence upon which Eatertainment relied to make good the proposition that it has a genuine offsetting claim.[10] In particular, he canvassed the correspondence between CFD’s and Eatertainment’s solicitors in relation to the negotiation of the contract, set out above, and culminating in the clause within the contract that provided for payment of CFD’s invoices within 14 days.[11] He also observed that the contract had an ‘entire agreement clause’.[12]
[10]Reasons, [8]–[65].
[11]Reasons, [18]–[20]; see also [127]–[132].
[12]Reasons, [25], [135].
The judge also set out in some detail what occurred after Eatertainment failed to pay the invoice, including the service of the first statutory demand, the application to set it aside, and the settlement of that proceeding.[13] The judge noted that Mr Pezaros swore an affidavit in connection with the first application, in which he made no mention of the new offsetting claim. Rather, he raised the first offsetting claim, which was ‘of quite a different character and magnitude to’ the new offsetting claim:
[T]here was no reference in Mr Pezaros’s 17 August 2023 affidavit to the offsetting claim for $2,294,512 which it now seeks to raise in response to what is, in essence, the very same debt.[14]
[13]Reasons, [26]–[74].
[14]Reasons, [146]–[147].
Mr Pezaros sought to explain the omission by the assertion that, had Eatertainment and its solicitors utilised more time in the preparation of his affidavit, the new offsetting claim would have been raised. The judge described this as ‘a most unconvincing explanation as to why it is only now that a claim of such magnitude is being raised’. His Honour said as follows:
The scale of the claim and the facts giving rise to its existence would have been apparent and formed the basis of an obvious response to the [first statutory demand] in the application to set it aside.[15]
[15]Reasons, [148].
The judge then observed that, after the application to set aside the first statutory demand was set down for hearing, the parties settled by entry into the deed. He said this:
In substance, the Deed amounted to a complete capitulation by Eatertainment. There was no discounting or allowance made in respect of the offsetting claim raised in the application, the only concession being granted to Eatertainment being the provision of payment of the full amount of the [first statutory demand] by instalments. Such capitulation was inconsistent with any contention that Eatertainment had offsetting claims of the scale and type it now raises.
… the Deed contains no mention or reservation of Eatertainment’s rights in respects of claims it may have under the Fit-out Contract. It entered into the Deed whereby it admitted the debt and no mention is made of any contention that the debt was not payable by reason of the Representations said to have been made by Mr Curtis.[16]
[16]Reasons, [150].
The judge also observed that Mr Pezaros said that, contrary to the first representation and second representation, CFD did not perform the Fit-out Works within the timeframe required so as to require UEM to pay out the Fit-out Contribution. The judge observed that no such assertion had been made in support of the application to set aside the first statutory demand, despite the fact that such a contention would have been apparent and available at that time. He also said this:
The offsetting claims involve a contention that, by reason of [CFD’s] requirement to be paid within 14 days of invoice, this was the source of all the categories of loss which it seeks to visit on [CFD] by its offsetting claims. As I have observed, all of the elements and events giving rise to the various alleged categories of loss had arisen by the time of the Deed or flowed from events which had occurred prior to the terms of the Deed being struck.[17]
[17]Reasons, [153].
The judge then returned to the nature of the exercise he was to undertake in deciding whether Eatertainment had established an offsetting claim that justified the setting aside of the second statutory demand,[18] as follows:
The jurisdiction I exercise in determining whether there is a genuine offsetting claim requires that I be satisfied that Eatertainment, which bears the onus, has proved there is a plausible contention requiring investigation as to the existence of that offsetting claim. In that exercise, the authorities confirm that the Court is not obliged to accept uncritically every statement in an affidavit without regard to its prima facie plausibility.[19]
[18]The judge head earlier set out the principles derived from Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq) [2015] VSCA 330 (‘Malec’) and various other cases: see Reasons, [112]–[115].
[19]Reasons, [154].
The judge concluded as follows:
I consider that the position being put by Mr Pezaros in regard to the First Representation and [Second] Representation flies against all the contemporaneously generated documentation. It was clear the issue of the ‘pay when paid’ term was of considerable importance to both parties and this is reflected in the protracted and concerted exchange between the solicitors acting on behalf of the parties in regard to it. This culminated in Eatertainment, through its solicitors, accepting [CFD’s] position in that regard and Eatertainment executing the Fit-out Contract embodying an obligation to make payment within 14 days of invoice. The Fit-out Contract contains an entire agreement clause.
Further, Eatertainment, which bears the onus of establishing it has genuine claims, has not in my view established that the losses it claims are attributable to any alleged conduct by [CFD]. The various categories of loss would appear to flow directly from its ongoing disputes with UEM, which it contends should be visited on [CFD].
I consider that, having regard to the various features of the evidence which I have highlighted, Eatertainment’s offsetting claims are not bona fide, are spurious and have the hallmarks of being ‘merely constructed in response to the pressure represented by the statutory demand’. As such, I consider that Eatertainment has not discharged the onus which it bears and that its application should be dismissed with costs.[20]

Eatertainment’s submissions

[20]Reasons, [154]–[156] (footnotes omitted).

By ground 1, Eatertainment did not contend that the judge erred in identifying the relevant principles. Rather, it contended that the judge erred in his application of the principles to the facts of this case. Relevantly, Eatertainment contended that the judge erred in failing to find that, on the evidence before him, it had established an offsetting claim that warranted setting aside the second statutory demand.
Eatertainment also contended that the judge made the following specific errors in his reasons:
(a)First, it contended that the judge placed undue weight on the contents of (and omissions from) the affidavit of Mr Pezaros sworn on 17 August 2023 (filed in the first application), and in particular on the failure of that affidavit to make reference to the new offsetting claim (ie the claim arising out of the first and second representations), as a foundation for concluding that the new offsetting claim had not been established.
(b)Secondly, it contended that it was legally prevented from raising the new offsetting claim in the first application after 17 August 2023. In light of that, the judge ought not to have placed any weight on the fact that the applicant had not raised the new offsetting claim in the context of the first application, between the date of filing of that application and the entry into of the deed (ie between 17 August 2023 and 29 January 2024).
(c)Thirdly, it contended that the judge placed undue weight on the lack of specific reference to the new offsetting claims in the deed, in circumstances where:
(i)the deed was, from Eatertainment’s perspective, designed to avoid the risks associated with the first application failing, with the consequence that Eatertainment would then have been presumed to be insolvent by operation of s 459C of the Act in a winding up application;
(ii)the new offsetting claim was unable to be raised in the first application; and
(iii)the agreement to pay an amount that is disputed by reason of the new offsetting claim was made in a deed which, as his Honour found, preserved the parties’ pre-existing rights in certain respects and circumstances including, but not limited to, the right of Eatertainment to pursue the new offsetting claim, or to raise it in any subsequent proceeding to set aside a statutory demand issued by CFD in respect of the same debt.
(d)Finally, it contended that, by reason of the above matters, the judge erroneously rejected (expressly or implicitly) the evidence of Mr Pezaros regarding the making of the first and second representations, and his reliance upon those representations as the director of Eatertainment in causing Eatertainment to execute the Fit-out Contract.

Consideration

Ultimately, the question for this Court, on an appeal of this kind, is whether the judge reached the correct outcome. In other words, is this Court persuaded that Eatertainment has discharged its onus to demonstrate ‘a plausible contention requiring investigation’ of the existence of the new offsetting claim?[21]
[21]Malec [2015] VSCA 330, [48] (Kyrou, Ferguson and Kaye JJA) (citations omitted).
Having reviewed the materials before the judge for ourselves, we consider that Eatertainment has not discharged its onus.
The only evidence that supported the new offsetting claim was the evidence of Mr Pezaros in his affidavits dated 22 March 2024 and 3 May 2024. But we are not required simply to accept that Eatertainment has discharged its onus based on Mr Pezaros’s assertions about the conversations he says he had with Mr Curtis. As this Court observed in Malec Holdings Pty Ltd v Scotts Agencies Pty Ltd (in liq):
The court is not required to accept uncritically every statement in an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself, it may be, as it may not have sufficient prima facie plausibility to merit further investigation as to its truth. The court is also not required to accept uncritically a patently feeble legal argument or an assertion of facts unsupported by evidence, although this should not be read as suggesting that the applicant must formally or comprehensively evidence the basis of its dispute or offsetting claim.[22]
[22][2015] VSCA 330, [50] (Kyrou, Ferguson and Kaye JJA).
In the present case, there was no other evidence to support Mr Pezaros’s evidence that Mr Curtis had made the two representations. In short, he relies upon an assertion of facts unsupported by independent evidence.
First, it is significant that there were no contemporaneous documents consistent with the two representations having been made. For example:
(a)On 3 May 2022, in the course of the negotiation of the contract and after the first representation had allegedly been made in March 2022, Eatertainment’s solicitors emailed CFD’s solicitors requesting that Eatertainment only be required to pay invoices once it was paid by UEM. A further email of 14 June 2022 (after the second representation had allegedly been made) again referred to that request. Those emails made no mention of any discussions between Mr Pezaros and Mr Curtis about the payment terms, as might have been expected if the two representations had in fact been made.
(b)On 15 June 2022, CFD’s solicitors emailed Eatertainment’s solicitors stating that ‘[a]s previously discussed, AAFS [CFD’s trading name] is unable to agree to open ended payment terms’, and offering terms requiring invoices to be paid within 14 days of receipt. Eatertainment’s response to that email, on 28 June 2022, was to agree to the terms proposed, making no reference to the two representations.
(c)After CFD issued Invoice No 2312 on 14 October 2022, specifying payment within 14 days, there was no email or other document from Eatertainment or Mr Pezaros reminding Mr Curtis that this was contrary to what they had discussed.
(d)Nor was there any such document during the time when Eatertainment was encountering difficulties with UEM.
Secondly, rather than there being contemporaneous documents supporting Mr Pezaros’s account of the two representations, there are various contemporaneous documents that are inconsistent with the representations having been made. In particular, all of the correspondence between the parties’ solicitors in the period before the contract was signed reflected CFD’s position that invoices were to be paid within a specified period.[23] CFD’s only concession in that regard was to accept a 14 day period for payment, rather than its usual 7 day period.[24] And, of course, the contract itself ultimately embodied CFD’s position, requiring payment of invoices within 14 days.[25]
[23]Reasons, [126]–[134].
[24]Reasons, [132].
[25]Reasons, [135].
Thirdly, Mr Pezaros’s assertion, now, that Mr Curtis had made the two representations is inconsistent with the manner in which the first statutory demand was dealt with.
(a)Eatertainment initially disputed the first statutory demand in correspondence from its solicitors to CFD’s solicitors dated 16 August 2023. That letter stated that the solicitors were instructed that the parties had agreed in or about June 2023 to vary the contract on the basis that CFD would not seek payment of any invoices until 60 per cent of the works under the contract were completed (the alleged verbal variation agreement, referred to earlier). We infer from that letter that Mr Pezaros gave those instructions to his solicitors.
That version of events concerning the timing of payment of invoices is quite different from the version Mr Pezaros is now propounding. Importantly, the version of events reflected in the solicitors’ letter concerned the timing of payment. Thus Mr Pezaros’s mind had been turned to the question of the timing of payment of invoices when he instructed his solicitors on or before 16 August 2023. Yet there was no mention in the letter of the two representations, which are also said to have concerned the time for payment of invoices.
(b)Eatertainment filed an application to set aside the first statutory demand on 17 August 2023, on several bases. These were set out in Mr Pezaros’s affidavit of 17 August 2023 and included an assertion that there was a genuine dispute about the debt, the first offsetting claim and an allegation concerning the verbal variation agreement. As already observed, the first offsetting claim was quite different from the new offsetting claim; and the allegation concerning the alleged verbal variation agreement was quite different (both in timing and effect) from the representations now said to have been made. Contrary to Eatertainment’s argument, we do not consider that the judge placed undue weight on the contents of and omissions from Mr Pezaros’s affidavit.
Like the judge, we consider Mr Pezaros’s explanation for the omission of the new offsetting claim from his affidavit to be entirely unpersuasive. We accept that Mr Pezaros provided instructions to his solicitors at a time very close to the date by which an application to set aside the first statutory demand had to be filed. Nonetheless, as noted above, Mr Pezaros had given instructions to his solicitors concerning an asserted variation of the timing for the payment of invoices. That showed that he had turned his mind to the question of timing of payment. It is entirely implausible that he would not also have mentioned the two alleged representations to his solicitors, had they been made.
We accept Eatertainment’s submission that, once it had made the application to set aside the first statutory demand, based on Mr Pezaros’s affidavit of 17 August 2023, it was not open to it to add to or vary the basis on which it sought to set aside the statutory demand.[26] Thus, after that date, it was not open to Eatertainment to add a new offsetting claim to its application to set aside the first statutory demand. But that proposition goes nowhere. The matters set out above provide ample basis to conclude that Eatertainment has not established a genuine offsetting claim requiring further investigation.
[26]See, eg, Energy Equity Corp Ltd v Sinedie Pty Ltd (2001) 166 FLR 179, 182–6 [17]–[29] (Wallwork J, Steytler J agreeing at 188 [49], Olsson AUJ agreeing at 188 [51]); [2001] WASCA 419; Malec [2015] VSCA 330, [57] (Kyrou, Ferguson and Kaye JJA); Sceam Construction Pty Ltd v Clyne (2021) 64 VR 404, 417 [43] (Ferguson CJ, Sifris and Walker JJA); [2017] VSCA 330. Those cases make clear that if a ground in support of an application to set aside a statutory demand was not identified in an affidavit filed within the 21 day period for challenging a statutory demand, then that ground cannot be relied upon.
In addition to the above matters, we make the following observations, although they are not essential to our conclusion. As noted above, we accept Eatertainment’s submission that it was not permitted to add an additional offsetting claim to its application to set aside the first statutory demand after the expiry of the 21 day statutory period. However, that does not explain the failure to mention the representations, or the claims they are said to give rise to, in the deed or in any communications concerning settlement prior to the deed. The claim in question is an independent claim pursuant to the Australian Consumer Law. Even if it did not provide a basis to set aside the statutory demand, it could nonetheless have provided Eatertainment with a matter about which to negotiate in settling the dispute about the statutory demand. Yet there is, again, simply no mention of the representations, or the Australian Consumer Law claim, in the deed or in any contemporaneous communications concerning the settlement of the first statutory demand. If this claim was genuine, one would have expected it at least to have been raised as a ‘bargaining chip’ in the resolution of the dispute about the first statutory demand. Yet not only was it not mentioned, the resolution of the first statutory demand effectively required Eatertainment to pay the full amount of the invoice, over time.

Ultimately, we consider Eatertainment’s new offsetting claim is not genuine and does not have sufficient prima facie plausibility to merit further investigation as to its truth. Like the judge, we consider it has the hallmarks of being ‘merely constructed in response to the pressure represented by’ the second statutory demand.[27]
[27]Reasons, [156].
In light of our conclusion on ground 1, it is unnecessary to consider ground 2, which can succeed only if ground 1 is made out.

Conclusion

For the foregoing reasons, we will refuse leave to appeal.
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[2025] VSCA 193

22 August 2025