In the matter of Douglas Aerospace Pty Ltd

(2015) 294 FLR 186; [2015] NSWSC 167

Supreme Court of NSW

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Catchwords

1. CORPORATIONS — external administration — winding up — winding up in insolvency — creditors statutory demand — application to set aside — where demand based on judgment arising upon filing of adjudication certificate under Building and Construction Industry Security of Payments Act — whether amenable to genuine dispute — whether amenable to offsetting claim — whether pendency of claim that adjudication is incorrect can found offsetting claim

Quick Take

The Court held that a judgment debt arising from a filed adjudication certificate under BACISOPA cannot be the subject of a 'genuine dispute' under s 459H(1)(a), and the pendency of curial proceedings contending the adjudication does not reflect true contractual rights does not of itself provide 'some other reason' under s 459J(1)(b) or constitute an 'offsetting claim' under s 459H(1)(b). Only 'true' offsetting claims — such as cross-claims for damages for defective work or restitution of amounts already overpaid — can be relied upon to set aside or vary such a demand. Brereton J expressly accepted the correctness of the WA Court of Appeal's decision in Diploma v KPA on this point, departing from the earlier NSW first instance line of authority in Plus 55, Ettamogah Pub and his own decision in Prime City Investments.