Australia, July 14 -- New South Wales Land and Environment Court issued text of the following judgement on June 13:

1. By Originating Process filed on 10 December 2024, the Plaintiff, BPS Developments Pty Ltd ("BPS") seeks to set aside a creditor's statutory demand dated 15 November 2024 ("Demand") issued by AVR Joinery Pty Ltd ("AVR").

2. The Demand claimed the amount of $67,825.48, which was identified in the schedule as derived from three judgments of the Local Court totalling that amount. Those judgments arose from the registration of adjudications under the Building and Construction Industry Security of Payments Act 1999 (NSW) ("SOPA"). BPS complains of the circumstances in which those adjudications were undertaken; it contends that it did not have notice of them or the opportunity to participate in them; but it rightly recognises that that does not provide a basis to set aside the Demand, where the adjudication outcomes are now reflected in those judgments.

3. BPS instead seeks to set aside the Demand on the basis that it has an offsetting claim which exceeds the amount of the Demand. That offsetting claim is quantified, first, as an amount of $61,943.81, referrable to additional financing costs resulting from delay in a project at Bexley North which BPS attributes to AVR's delay in completing its work on that project; and, second, an amount of $51,588.62, being a loss which BPS would suffer in respect of a project at Carlton, if AVR claims, as it does, an amount that exceeds the amount which BSP contends it quoted for, and contracted, to complete that project. Those amounts together would give rise to an offsetting amount which significantly exceeds the total claimed in the Demand.

A preliminary issue - the "Graywinter" principle

4. A preliminary issue arises as to the application of the so-called Graywinter principle, in respect of both the first and second affidavits of Mr Skaf in support of the application to set aside the Demand: Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452; [1996] FCA 822.

5. Mr Sukkar, who appears for AVR, submits that several of the paragraphs in Mr Skaf's first affidavit do not advance the matters to which that affidavit is directed. In particular, Mr Sukkar submits, likely correctly, that that affidavit was directed to establishing a genuine dispute as to the Demand, and a claim to set aside the Demand under s 459J(1)(b) of the Corporations Act 2001 (Cth) ("Act"). That may be accepted, but in dealing with those matters, Mr Skaf led evidence which raised issues that are relevant to the claim now put by BPS. In respect of the project at Bexley North, he led evidence which plainly raised the question of delay in the project and asserted at least the fact of loss suffered by the principal of another company associated with the project by reason of that delay. That proposition did not establish any loss suffered by BPS in that respect, but it plainly raised the question of delay in respect of the project. Mr Skaf's evidence as to the Carlton project also raised the proposition that, first, AVR had a quoted cost to complete for that project and, second, that AVR did not then make a further claim beyond that quoted cost and, by extension, any claim beyond that quoted cost would be in breach of contract or contrary to a representation as to the cost to complete that project.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197cddce54a507a4395261b2)

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