Federal Court of Australia

Grow Surge Pty Ltd (In Liquidation) v Videriva Pty Ltd (In Liquidation) [2026] FCA 974

ORDERS

THE COURT ORDERS THAT:

1. The plaintiffs’ appeals be allowed.

2. The second defendant’s rejection of the following proofs of debt or claim in the liquidation of the first defendant be set aside:

(a) the first plaintiff’s proof of debt or claim dated 12 December 2025 in the amount of $29,728.00;

(b) the second plaintiff’s proof of debt or claim dated 12 December 2025 in the amount of $59,378.90;

(c) the third plaintiff’s proof of debt or claim dated 12 December 2025 in the amount of $32,270.00; and

(d) the fourth plaintiff’s proof of debt or claim dated 14 January 2026 in the amount of $148,600.

3. The second defendant admit:

(a) the first plaintiff’s proof of debt or claim dated 12 December 2025 in the amount of $29,728.00;

(b) the second plaintiff’s proof of debt or claim dated 12 December 2025 in the amount of $59,378.90;

(c) the third plaintiff’s proof of debt or claim dated 12 December 2025 in the amount of $32,270.00; and

(d) the fourth plaintiff’s proof of debt or claim dated 14 January 2026 in the amount of $148,600.

4. The first defendant pay the plaintiffs’ costs of this proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    Introduction

1 This proceeding concerns four proofs of debt lodged in the members’ voluntary winding up of Videriva Pty Ltd (in liquidation) (Videriva). The proofs were lodged by the joint and several liquidators of Grow Surge Pty Ltd (in liquidation), Highpoint Pty Ltd (in liquidation), Touchline Pty Ltd (in liquidation) and SSG NSW Pty Ltd (in liquidation) (together, the plaintiff companies).

2 Each proof asserts that moneys transferred by the relevant plaintiff company to Videriva between 2020 and 2022 gave rise to an enforceable liability owed by Videriva to that company. Collectively, the claims amount to $272,976.90. The liquidator of Videriva rejected each proof and, by this proceeding, the plaintiff companies seek orders setting aside those rejections and admitting the proofs in full, or in such lesser amount as the Court considers appropriate.

3 Although the proceeding is framed as an “appeal” from the rejection of proofs of debt, the issues which ultimately arise are not unusual in questions of insolvency administration.

4 The proceeding is brought pursuant to reg 5.6.54 of the Corporations Regulations 2001 (Cth), s 90-15 of the Insolvency Practice Schedule (Corporations) and, it is said, the “inherent jurisdiction” of the Court.

5 I pause to note, yet again, that this Court does not possess an “inherent jurisdiction” in the sense in which that expression is used in relation to the superior courts at Westminster. As I explained in CPB Contractors Pty Limited v Celsus Pty Limited (formerly known as SA Health Partnership Nominees Pty Ltd) [2017] FCA 1620; (2017) 353 ALR 84 (at 94 [52]–[53]), it is well established that only superior courts of record with unlimited jurisdiction are said to possess “inherent” powers. This Court, together with the High Court and the Federal Circuit and Family Court of Australia, possess defined jurisdiction granted either by the Constitution or a law of the Commonwealth. As Wilson and Dawson JJ observed in Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 (at 618):

federal courts differ from the supreme courts of the States which, although of statutory origin, are truly designated superior courts because they are invested with general jurisdiction by reference to the jurisdiction of the courts at Westminster.

6 Although federal courts possess similar powers, they should not be referred to as “inherent” powers. But although it is less than accurate to say that the Court has an inherent power to grant the relief identified, there is no doubt the Court has ample power to make the orders sought.

7 Although the task in which the Court is engaged is commonly described as an “appeal”, that description can mislead if it suggests the Court is engaged in reviewing the correctness of the liquidator’s decision upon the material that happened to be before the liquidator. That is not the correct approach. The authorities have long recognised that the Court’s function is to determine for itself whether the liability asserted in the proof is a true liability of the company according to law.

8 Accordingly, the application involves a hearing de novo, with the Court entitled to receive additional evidence to that which was presented to the liquidator: Tanning Research Laboratories Inc v O’Brien [1990] HCA 8; (1990) 169 CLR 332 (at 340–341 per Brennan and Dawson JJ).

9 It is also plain that the plaintiffs bear the evidentiary and persuasive onus of establishing, on this application, that the liabilities the subject of the proofs are true liabilities of Videriva. It necessarily follows that, if the Court is unable to conclude either way whether the proofs of debt should be admitted, then the liquidator’s decisions must stand.

10 The existence of this burden should not be misunderstood. This is a civil case in which proof of facts is governed by s 140(1) of the Evidence Act 1995 (Cth). As in any other civil proceeding, the plaintiff companies are not required to eliminate every conceivable hypothesis which may be advanced or be available. Civil litigation frequently requires the Court to determine disputed questions of fact by drawing inferences from objective circumstances. This is a classic example of a case in which the determinative issue is whether the inference contended for by the parties bearing the onus is, having regard to the whole of the evidence, the more probable of the competing inferences reasonably available.

B    BACKGROUND

11 It is convenient to begin with the matters established by the contemporaneous documents placed before the Court.

12 On 26 November 2025, the second defendant, Mr Ozem Kassem, was appointed liquidator of Videriva. At that time, he had been provided with Videriva’s most recent financial statements, which were for the period from 1 July 2025 to 30 November 2025. Those statements disclosed no liabilities other than a nominal unsecured loan of $2,077 recorded as a non-current liability.

13 A few days later, the liquidators of the plaintiff companies became aware that Videriva had been placed into a members’ voluntary winding up. Investigations in relation to each of the plaintiff companies indicated that the payments identified in the annexure to these reasons (taken from MFI 1 at the hearing), had been made by the plaintiff companies to Videriva between 2020 and 2022.

14 Mr Anthony Norman Connelly, one of the joint and several liquidators of the plaintiff companies, gave evidence that, upon reviewing the bank statements of Videriva, he observed that the descriptions of the payments recorded in the bank statements of the plaintiff companies did not match the descriptions recorded in Videriva’s bank statements. For most of the payments, however, a payment reference number appeared in both sets of statements and correlated the relevant payments.

15 Mr Connelly also came into possession of what was described as a “Keystrokes” document relating to SSG NSW’s bank account with Westpac Banking Corporation. The document had been provided by the Australian Taxation Office to the liquidators in connexion with their investigations into the affairs of SSG NSW. It tracked metadata and activity within what was described as the “Westpac platform” relating to that account. The “Keystrokes” document demonstrates to my satisfaction that some payments made by SSG NSW to Videriva had originally borne descriptions which have been amended for some reason, and that despite any notation to the contrary, the payments identified had in fact been made by SSG NSW to Videriva.

16 On 2 December 2025, a notice inviting formal proofs of debt or claim in the liquidation of Videriva was published on the website of the Australian Securities and Investments Commission. The notice required proofs to be lodged by 16 December 2025. On 3 December 2025, the liquidators of the plaintiff companies wrote to Mr Kassem. The letter recorded the amount said to be owing to each of Grow Surge, Highpoint and Touchline, attached schedules identifying the constituent transactions, requested that those companies be added to Videriva’s list of creditors and sought proof of debt forms. The letter also noted that Videriva was being wound up voluntarily by its members and stated that, because a members’ voluntary winding up proceeds upon a declaration of solvency, the liquidators anticipated that Videriva had sufficient funds to meet its debts.

17 It soon became apparent that Mr Kassem disputed that the relevant plaintiff companies had claims against Videriva.

18 On 12 December 2025, the proofs of debt of Grow Surge, Highpoint and Touchline were sent with an accompanying letter stating that the liquidators were unaware of any commercial basis for the transactions and requesting the provision of any records, including invoices or contracts, capable of substantiating a reason for the payments.

19 During the following month, there were further exchanges between the staff of the respective liquidators. On 12 January 2026, the liquidators of the plaintiff companies were informed that Mr Kassem did not hold records indicating that the relevant plaintiff companies had claims against Videriva, that enquiries were being made of Videriva’s director and former advisers and that, unless further material was obtained, a request for adjudication would result in the rejection of the proofs.

20 On 14 January 2026, the liquidators sent a further, considerably more detailed letter.

21 By then, they had identified the additional payments made by SSG NSW. The letter enclosed the proof of debt for SSG NSW and formally requested adjudication of the then extant four proofs pursuant to reg 5.6.53 of the Corporations Regulations 2001 (Cth).

22 On 13 February 2026, after the expiry of the period requested for adjudication, four letters dated 12 February 2026 rejecting the proofs were sent. The principal basis of the rejections was that the proofs were unsupported by sufficient documentation to establish that the asserted debts were true liabilities of Videriva.

23 Promptly thereafter, the plaintiffs companies commenced the present proceeding. This step seems to have prompted further inquiries on behalf of Mr Kassem. On 26 February 2026, he instructed his staff to communicate with the solicitors for Mr Igor Kotevski, who was the sole director and company secretary of Videriva.

24 On 3 March 2026, a further request was made to Mr Kotevski’s solicitors seeking a response concerning the proofs. The following day, a brief response was conveyed that Mr Kotevski did not recall the particular transactions.

25 This was followed by a more substantive email sent by Mr Kotevski’s solicitor to Mr Kassem’s solicitor on 16 March 2026 (Kotevski email). The Kotevski email assumes some importance in the case, and it is worth setting it out:

Dear Nicholas

Further to my earlier email, I am instructed to provide the following further information in relation to the Company. I am instructed that:

Videriva Pty Ltd operated as a consulting advisory business, providing operational, administrative and facilitation support to a range of entities.

During the relevant period (approx. 5 years ago) Videriva provided services including:

* Submitting workers compensation claims

* Obtaining insurance quotations

* Obtaining finance and lending quotations

* General ad-hoc administrative and operational assistance

The services were performed at the direction of a previous associate known as Ian. Ian acted as the primary point of contact. Despite reasonable efforts Ian cannot be contacted.

The services were completed as instructed. Payments were received for those services. All amounts were treated as income, declared in relevant BAS and income tax returns and taxed accordingly. No adverse findings or disputes were raised by the ATO in relation to these amounts.

At the time Videriva did not use Xero or MYOB. Accounting and records were maintained using alternative methods consistent with the size and operations of the business at that time. Invoices, agreements and working documents were historically stored on a company laptop. Due to the age of the transactions, system changes, and passage of time, the historic laptop-based records are no longer readily accessible.

Regards,

Michael

26 After receiving the explanation attributed to Mr Kotevski in the Kotevski email, the liquidators undertook a further review, described in the evidence as “thorough”, of the books and records of all four plaintiff companies. That review identified no record of Videriva providing any service to any of the plaintiff companies and, in particular, no record of the services described in the Kotevski email.

27 I am satisfied that it is objectively established on the evidence that there is no contemporaneous document produced from the records of either side which identifies any apparent basis for the payments. No contract for services has been located, and no invoice, engagement letter, purchase order or written instruction has been produced. No particular item of work referable to the payments has been identified. As was fairly accepted by counsel for the plaintiffs, the high watermark of any explanation for the payments is the unsupported assertions in the Kotevski email.

C    Evaluation of the Evidence

28 Notably, no evidence was adduced by the defendants to support the explanation apparently given by Mr Kotevski in the Kotevski email.

29 What is also noteworthy, from a review of all the evidence, is that the purported explanation (in the Kotevski email) developed incrementally and, in its critical aspects, only after this proceeding had been commenced.

30 The first description of Videriva’s business appeared in correspondence preceding the members’ voluntary winding up. On 17 September 2025, in response to enquiries concerning the proposed liquidation, it was said that Videriva had previously operated as a consulting firm to finance and construction companies, provided some project management work and had been used for receiving commissions. That was a very general description. It did not identify any client of Videriva, any particular engagement undertaken by it, the nature of any work performed, or any of the plaintiff companies as clients.

31 By 14 January 2026, Mr Connelly understood that Videriva’s alleged business was said to relate to “obtaining finance”. Unsurprisingly, he contended to Mr Kassem that this description “remains notably vague” and that, in the absence of invoices, client correspondence, transaction and loan files, operational records or any other evidence of trading activity, it was difficult to conclude that Videriva conducted any genuine business.

32 As I have already explained, the proofs were rejected in February 2026 without any affirmative conclusion apparently having been reached as to the purpose of the payments. The rejections proceeded essentially upon the footing that the plaintiff companies had not supplied sufficient material to establish debts owed by Videriva. The position was therefore not that Mr Kassem had identified records showing that Videriva had earned the money by providing services, but rather that he was not satisfied the plaintiffs had established an obligation of repayment.

33 It was only in the Kotevski email of 16 March 2026 that any detail whatsoever was given of the asserted business activities of Videriva. The earlier reference to a consulting firm with some connexion to obtaining finance was then extended to encompass a wide range of other activities, including workers compensation claims, insurance quotations, finance and lending quotations, and general administrative work. Even then, the explanation did not identify which of those services had been provided to which plaintiff company.

34 When the matter came before me for a case management hearing on 22 May 2026, I enquired of the parties what evidence would be adduced as to the rationale for the payments. Counsel then appearing for the defendants initially said the payments were for “consultancy services”. When asked what consultancy was involved, reference was made to financial consultancy and workers compensation claims, and, upon further enquiry, counsel read the broader description in the Kotevski email concerning operational, administrative and facilitation support.

35 At that hearing, I also asked about the relationship between Mr Kotevski, those operating Videriva and the plaintiff companies. Counsel who appeared for the defendants at that hearing (and who is not appearing today) had no instructions as to the relationship between Mr Kotevski and those associated with the plaintiff companies and was unaware whether any such relationship existed. Nothing subsequently adduced into evidence supplied an answer to that question.

36 I have significant difficulty accepting that the evidence provides any probable commercial explanation for Videriva’s entitlement to retain the payments. It is not simply the complete absence of evidence beyond a vague assertion in an email communicated after the proceeding had been commenced. The account remains entirely uncorroborated. Its evolution, its generality and its failure to be specific about transactions of a kind in respect of which one would ordinarily expect to see some contemporaneous documentation render the assertions difficult to accept.

37 It is important I do not invert onus, and I recognise the limits of the reasoning properly open to the Court. As I have indicated, the plaintiff companies bear the onus throughout, and Videriva is not required to prove its entitlement to retain the money merely because payments into its account have been identified. I am also conscious that it is not unusual for companies of Videriva’s size to be somewhat lax in their record keeping, and that records may be poorly maintained or lost.

38 These qualifications do not, however, require the Court to approach the evidence without regard to its inherent quality or ordinary commercial experience. The only explanation proffered must be evaluated against the number, size and duration of the payments identified in the annexure to these reasons.

39 There are several cascading difficulties in accepting the explanation advanced by the Kotevski email.

40 The first, as I have already touched upon, relates to the evolving nature of the descriptions of Videriva’s business. The description given before the winding up evolved up to the Kotevski email. When Mr Kotevski was specifically asked about the transactions after the proceeding had been commenced, his initial response on 4 March 2026 was Delphic and, tellingly, was not that the transactions related to readily explicable payments for consultancy services. It was only 12 days later that the substantially broader explanation recorded in the Kotevski email emerged.

41 Further, that evolution was not supported by any suggestion that Mr Kotevski had located a document, consulted a diary, communicated further with the person identified in the Kotevski email only as “Ian”, or that he had otherwise refreshed his memory.

42 The second difficulty is how the explanation was given. Mr Kotevski was the sole director and the person one would ordinarily expect to know best what business was conducted and why the payments were received. Notwithstanding this, his only account came through representations made by his solicitor as recorded in the Kotevski email. Given the absence of supporting records, those unsupported assertions carry little weight.

43 A third difficulty is that no method of charging has been identified. The payments vary significantly, and there is no evidence of any hourly rate, commission arrangement or other mode of charging. It is difficult in those circumstances to understand why some payments were very small and others were in the tens of thousands of dollars. This compounds the difficulty caused by the absence of evidence connecting the amounts paid with any contemporaneous record.

44 The fourth difficulty is the lack of explanation as to why the records said to have been stored on the company laptop are “no longer readily accessible” as asserted in the Kotevski email. It is not said that any effort was made to recover the information or what efforts, if any, could be made to retrieve material from the laptop.

45 The fifth difficulty concerns the somewhat elusive individual described only by his Christian name, “Ian”. To describe his involvement on the evidence before me as obscure is to engage in considerable understatement. He appears to have been a previous associate and the primary point of contact, but insufficient details were apparently available to permit his involvement to be the subject of any investigation.

46 In short, the Court is invited to accept that four companies retained Videriva for substantial and varied consulting work; that the engagements were channelled through an unidentified person named “Ian”; that no director, officer or employee of any paying company can be identified as having instructed or received the work; and that no documentary trace of the relationship survives in the records of either the provider or the recipients.

47 The explanation is expressed at such a level of generality that it is impossible to reach a reasonable degree of satisfaction that the representations contained in the Kotevski email of 16 March 2026 had any underlying merit.

48 Of course, it remains theoretically possible that Videriva may have provided some service to one or more of the plaintiff companies. But the task in which I am engaged under s 140 of the Evidence Act 1995 (Cth) is not to deal with every theoretical possibility. It is to assess probabilities in accordance with the ordinary civil standard.

49 It goes without saying that I cannot make (and should not make) any finding of dishonesty or any other improper purpose, such as a diversion of company funds. The conclusion I am required to reach is much narrower and is based upon an assessment of the whole of the evidence and the relative probabilities of the competing explanations.

50 The objective banking records establish that the four plaintiff companies transferred the amounts claimed and that Videriva received them. Ordinarily, transactions of that character would leave some verifiable commercial trace, or there would at least be sufficient information available for them to be verified in some way.

51 It seems to me tolerably plain that the payments arose in circumstances giving rise to an obligation of repayment, either as advances repayable on demand or as payments made without any corresponding provision of services and thus giving rise to a restitutionary liability. When the evidence is considered as a whole, that explanation is materially more probable than the proposition that the payments represented consideration earned by Videriva for identified services.

52 It does not matter for present purposes whether the liabilities are characterised as unsecured advances repayable on demand or restitutionary liabilities arising from the receipt of monies without consideration. No party suggests otherwise.

53 It suffices to find that I am satisfied that the amounts claimed are true liabilities of Videriva. It follows that the decisions rejecting the proofs should be set aside and each proof admitted in full in the amounts identified in the originating process.

D    Costs

54 The appropriate order as to costs is that the first defendant pay the plaintiffs’ costs of the proceeding.

55 It is unfortunate that the plaintiffs have been put to the expense of proving their case and incurring the costs associated with this proceeding. That said, the liquidator of Videriva was placed in a somewhat difficult position by reason of the instructions he received, and I do not consider it could be said that he acted unreasonably in the circumstances. Sensibly, no order for costs is sought against him personally.

56 I should conclude by recording that it has only been possible to deal with this case promptly by reason of the careful and useful submissions made on behalf of all parties, including those parties who submitted to the orders of the Court, and I am grateful to counsel and solicitors for the assistance the Court has received.

E    Conclusion

57 For those reasons, the orders of the Court will be that the decisions rejecting the four proofs of debt be set aside, that the proofs be admitted in full in the amounts claimed, and that the first defendant pay the plaintiffs’ costs of the proceeding.

Associate:

Dated: 22 July 2026

SCHEDULE OF PARTIES

ANNEXURE A

Grow Surge Pty Ltd (in liq) & Ors

v

Videriva Pty Ltd (in liq) and anor

NSD 272 / 2026

Plaintiffs’ submissions

Annexure A (Annotated CB references)