Bluestone Property Services Pty Ltd (in liq) v First Equilibrium Pty Ltd

The case of Bluestone Property Services Pty Ltd (in liq) v First Equilibrium Pty Ltd was heard in the Supreme Court of New South Wales. The liquidator of Bluestone Property Services sought to determine whether First Equilibrium had the necessary standing to assert an offsetting claim and, if so, whether that claim was valid. The dispute stemmed from an assignment of rights under a Unit Sales Agreement by Sharlotte Pty Ltd to Equilibrium, which Equilibrium now sought to use as an offsetting claim against a judgment debt owed by Bluestone.

The court had to decide two primary issues: whether First Equilibrium had standing to assert an offsetting claim against Bluestone, and whether the claim itself was genuine and valid. The court considered the requirements under s 459H of the relevant legislation to determine if Equilibrium's claim met the criteria for an offsetting claim. The court also examined the evidence provided by Equilibrium to challenge the prior findings made in Abadeen v Bluestone, which had deemed the offsetting claim invalid.

The court found that Equilibrium did not have standing to assert the offsetting claim because the assignment of rights by Sharlotte to Equilibrium was ineffective. Additionally, the court confirmed that the offsetting claim was not genuine as there was no evidence that Sharlotte could transfer the units free of encumbrances, nor was there evidence that Sharlotte had signed the assignment deed. Therefore, the claim did not satisfy the statutory requirements for an offsetting claim.

Given these findings, the court concluded that the liquidator could proceed with the winding up of Bluestone without considering the set-off provisions under s 553C(1). The court ordered that the liquidator could continue with the winding up of Bluestone, as the offsetting claim by Equilibrium was invalid and did not affect the proceedings.