Security of Payment Legislation and Set-Off Under Commonwealth Insolvency Laws
A recent Victorian Supreme Court case[1] has clarified the impact of Commonwealth insolvency set-off provisions on State-based security of payments legislation.
The case demonstrates that although a principal is generally precluded from relying on a set-off or counterclaim in certain contexts under the Building and Construction Industry Security of Payment Act 2002 (Vic) (BCISP Act), this general preclusion does not apply if the claimant is in liquidation, due to the operation of section 553C of the Corporations Act 2001 (Cth) (Corporations Act).
The case also provides useful commentary on what is considered a ‘payment schedule’ for the purposes of the BCISP Act.
If you would like to read more about this case, please click here.
[1] Façade Treatment Engineering Limited v Brookfield Multiplex Construction Pty Ltd [2015] VSC 41.