Cashgain Pty Ltd v Excell Building Corporation Pty Ltd

In Cashgain Pty Ltd v Excell Building Corporation Pty Ltd, the dispute arose from a statutory demand issued by Cashgain against Excell, seeking payment of a judgment debt. Excell sought to set aside the statutory demand, asserting that it had a genuine offsetting claim against Cashgain for damages due to defective work on home units constructed by Excell. The case was heard in the Federal Court of Australia.

The primary legal issue before the court was whether Excell's claim for damages due to defective work constituted a genuine and substantive offsetting claim that could be set against the judgment debt owed by Excell to Cashgain. The court had to consider whether the claim was genuine and of substance, despite various certificates of completion being issued, the expiration of the defects rectification period, and the sale of most units by Cashgain.

The court determined that Excell's claim was indeed genuine and of substance. It held that the issuance of completion certificates and the sale of the units did not preclude Excell from pursuing its claim for damages. The court found that the expiration of the defects rectification period did not bar the claim, as it was not a prerequisite to the builder's liability for defective work. Consequently, the court set aside the statutory demand and dismissed Cashgain's application.

The final order of the court was that the statutory demand issued by Cashgain against Excell be set aside, and Excell's claim for damages due to defective work be recognised as a genuine offsetting claim against the judgment debt. The court directed that the parties proceed to negotiate the amount of the damages owed by Excell to Cashgain.