In the matter of Linmas Holdings Pty Ltd

Linmas Holdings Pty Ltd, the respondent, filed a statutory demand against the appellant, which was subsequently issued in respect of a judgment debt for an adjudicated amount under the Building and Construction Industry Security of Payment Act 1999 (NSW). The appellant, seeking to set aside the statutory demand, argued that an offsetting claim was supported by an affidavit served within the 21-day statutory period. The respondent contested the application on the grounds that the claim for declarations that the adjudicated amount was not truly payable was not an offsetting claim within the meaning of section 459H.

The legal issues before the court were whether the claim for declarations regarding the adjudicated amount constituted an offsetting claim and whether the appellant had provided sufficient evidence to justify the rectification work costs as a measure of damages. The court considered the respondent's argument that the claim was not an offsetting claim because it sought declarations rather than a monetary amount. Furthermore, the court examined the appellant's evidence concerning the costs of rectifying defects and the lack of evidence that the building had been sold. The court concluded that the claim for declarations was not an offsetting claim and that the appellant had not provided sufficient evidence to justify the costs of rectification.

The court held that the claim for declarations was not an offsetting claim as it did not seek a monetary amount but rather sought to challenge the validity of the adjudicated amount. Additionally, the court found that the appellant had not provided sufficient evidence to justify the costs of rectification, as there was no evidence that the building had been sold or that it was reasonable to undertake the rectification work under the circumstances. Consequently, the court dismissed the proceedings and upheld the statutory demand.