Re 52 Black Street Pty Ltd - [2025] VSC 506

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2025 02961

IN THE MATTER of 52 BLACK STREET PTY LTD (ACN 627 917 417)

BETWEEN:

52 BLACK STREET PTY LTD (ACN 627 917 417)	Plaintiff
v
POSSABILITY GROUP LIMITED (ACN 638 044 327)	Defendant

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JUDGE:	Gobbo AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	5 August 2025
DATE OF JUDGMENT:	20 August 2025
CASE MAY BE CITED AS:	Re 52 Black Street Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 506

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CORPORATIONS — Application to set aside creditor’s statutory demand — Whether affidavits can be relied upon — Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 — Sceam Construction Pty Ltd v Clyne (2021) 64 VR 404 — GoConnect Ltd v Sono Strategic International Ltd (in liq) [2016] VSCA 315 — Whether there is a genuine dispute — Corporations Act 2001 (Cth), s 459H — Demand varied — Whether the company has an offsetting claim — Corporations Act 2001 (Cth), s 459H(1)(b) — Britten Norman Pty Ltd v Analysis & Technology Australia Pty Ltd (2013) 85 NSWLR 601 — TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd (2008) 66 ACSR 67 — No offsetting claim.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms L Keily, solicitor	LJ Keily Pty Ltd
For the Defendant	Ms V Bell	Piper Alderman

Contents

The application

Legal principles

Preliminary issue – admissibility of plaintiff’s affidavit material

Plaintiff’s evidence and submissions

Genuine dispute
Offsetting claim

Defendant’s evidence and submissions

Genuine dispute
Offsetting claim

Analysis

Genuine dispute
Offsetting claim
Lack of Authority
Restitution

Conclusion

HER HONOUR:

The application

By originating process filed 27 May 2025, the plaintiff sought orders under s 459G of the Corporations Act 2001 (Cth) (‘Act’) to set aside the defendant’s statutory demand dated 7 May 2025 (‘Demand’).
The Demand, based on a loan agreement, is for the sum of $6,082,465.75. The loan agreement is recorded in a letter of offer dated 3 January 2023 and a document entitled ‘business loan and line of credit — terms and conditions’ dated 20 December 2022 entered into on 3 January 2023 and pursuant to which the defendant loaned to the plaintiff the sum of $5,000,000.00 (‘Loan Agreement’).
The Demand describes the debt as being comprised as follows:
(a)the principal sum of $5,000,000.00 (‘Principal Sum’) advanced by the defendant to the plaintiff pursuant to the Loan Agreement; and
(b)interest as at 7 May 2025 in the sum of $1,082,465.75 accrued pursuant to the Loan Agreement, calculated at the default rate of 18% for the period 24 February 2024, being the date at the end of the term of the facility, to 7 May 2025 being the date of the Demand.
The plaintiff admitted that:
(a)the Loan Agreement was entered into between the plaintiff and the defendant;
(b)the defendant advanced the Principal Sum to the plaintiff pursuant to the terms of the Loan…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] VSC 506
Decision Date: 20 August 2025

CaseChat Overview and Summary

In the matter of Re 52 Black Street Pty Ltd, the applicant, a creditor, sought to set aside a statutory demand served on the respondent company under section 459E of the Corporations Act 2001 (Cth). The dispute centred on whether the applicant's affidavit could be relied upon in support of the application and whether there existed a genuine dispute regarding the company's liability for the debt claimed. The case was heard in the Supreme Court of Victoria.

The court was required to consider whether the affidavit, which included statements from individuals who were not parties to the proceeding, could be utilised to support the application. The court also needed to determine if the respondent had a genuine dispute concerning the amount claimed by the applicant. In addressing these issues, the court examined relevant precedents, including Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund, Sceam Construction Pty Ltd v Clyne, and GoConnect Ltd v Sono Strategic International Ltd.

The court held that the affidavit could not be relied upon as it included statements from individuals who were not parties to the proceeding, thereby breaching the requirement of personal knowledge. The court also found that the respondent had a genuine dispute regarding the amount claimed. While the applicant argued that the respondent had an offsetting claim, the court found no merit in this contention, relying on precedents such as Britten Norman Pty Ltd v Analysis & Technology Australia Pty Ltd and TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd. Consequently, the application to set aside the statutory demand was successful.

The court varied the statutory demand to reflect the genuine dispute and ordered that the company's liability was to be determined by the court. The orders included the setting aside of the original statutory demand and the initiation of further proceedings to ascertain the amount owed by the respondent.

Orders