Ettamogah Pub (Rouse Hill) Pty Limited v Consolidated Constructions Pty Ltd (in liq)

Ettamogah Pub (Rouse Hill) Pty Limited sought to set aside a statutory demand lodged by Consolidated Constructions Pty Ltd (in liq). The dispute arose from a building contract between the parties, where the defendant, as a builder, failed to complete the works on time and left defects. The plaintiff alleged that the defendant had not completed the building works on time and had left defects that required rectification. The defendant served the plaintiff with a statutory demand for the amount of the judgment debt obtained in earlier proceedings. The plaintiff applied to set aside the statutory demand, arguing that there was a genuine dispute as to the indebtedness and that it was seriously arguable that it was entitled to relief under the Security of Payment Act 1999 (NSW) and damages for the defendant's failure to complete the works on time and for the cost of rectifying defects in the building works.

The court was required to determine whether the plaintiff had a seriously arguable case that it was entitled to relief under the Security of Payment Act 1999 (NSW) and damages for the defendant's failure to complete the works on time and for the cost of rectifying defects in the building works. The court also had to consider whether the plaintiff's failure to lodge proofs of debt against the defendant, now in liquidation, precluded it from raising alleged offsetting claims.

The court found that the plaintiff had a seriously arguable case that it was entitled to relief under the Security of Payment Act 1999 (NSW) and damages for the defendant's failure to complete the works on time and for the cost of rectifying defects in the building works. The court also found that the plaintiff's failure to lodge proofs of debt against the defendant, now in liquidation, did not preclude it from raising alleged offsetting claims. The court noted that the plaintiff had not been given an opportunity to provide evidence to support its claims, and that it was in the interests of justice to grant the application. The court granted the application to set aside the statutory demand.

The court ordered that the statutory demand be set aside, and that the plaintiff be given an opportunity to provide evidence to support its claims. The court also noted that the defendant, now in liquidation, would be unable to realise on the judgment debt, and that the plaintiff's claims were not frivolous or vexatious. The court's decision provides guidance on the factors to be considered when determining whether to set aside a statutory demand, particularly in cases where the plaintiff has a seriously arguable case for relief under the Security of Payment Act 1999 (NSW) and damages for the defendant's failure to complete the works on time and for the cost of rectifying defects in the building works.