Defence barrister Christopher Dane, QC, told the Supreme Court on Friday, during a bail application for Mr Mitchell, that the alleged victim was the only person who claimed that Mr Mitchell had had a gun.

Justice Betty King said there were numerous witnesses to the assault but no one who saw the gun.

The alleged victim claimed that Mr Mitchell threatened to kill him and his two-and-a-half month old baby if he was not paid $300,000 during a lunch-time meeting at the Clarendon Street cafe on January 10.

He told police that Mr Mitchell punched him in the face and shoved the gun in his stomach when telling him, "I'll shoot you, you c..t if you don't give me the money" before adding, "Take the kid away or I'll shoot it as well."

The man, who had received half of a $2.3 million inheritance, then left with his baby daughter in the pram before going to the police. He claimed Mr Mitchell was laughing as he walked away.

Mr Mitchell, 40, is facing 17 charges including extortion with threats to kill, recklessly and intentionally cause injury, and possessing a gun and a belt that had a built-in double-edged dagger.

Mr Dane said the alleged victim was besotted with Mr Mitchell, regularly monitoring his Instagram account, and had actually been the one to organise the January 10 meeting despite telling police he was in fear of Mr Mitchell.

"Just text and head for the hills if you're that worried about it," Mr Dane said.

Mr Dane said the alleged victim, who has a previous conviction for making a false report to police, also phoned Mr Mitchell after the cafe incident, but before Mr Mitchell was arrested.

Justice King said the alleged victim claimed he went to see Mr Mitchell because he was under pressure to pay him the $300,000 and wanted to try to defuse the situation.

"He's attempting to basically get him off his back," the judge said.

She said the Crown opposed bail because it was claimed that Mr Mitchell was an unacceptable risk of interfering with witnesses and could endanger the safety and welfare of the public if released.

Mr Dane said if the judge wanted to deal with the assault charges on Friday, Mr Mitchell would plead guilty but he denied being armed with a gun during the confrontation with the alleged victim.

Detective Acting Sergeant Chris O'Brien, of the anti-bikies Echo Taskforce, told a previous hearing that although Mr Mitchell was no longer the Bandidos' sergeant-at-arms, he was a "significant and high-risk individual on the Victorian criminal landscape", with ties to bikies and organised crime in Australia and overseas.

Justice King said the fact Mr Mitchell had significant connections with outlaw motorcycle gangs was a prospect that would frighten most people.

The judge said Mr Mitchell was notorious, given he had been shot twice in 2011 and 2013 in such high-profile, public ways.

She will hand down her decision on Mr Mitchell's bail application on Tuesday.