A Supreme Court of New South Wales decision in February 2014 is
a timely reminder to creditors to ensure that agreements clearly
articulate arrangements where funds are to be held on trust for a
specific purpose. The Court revisited the question of the
entitlement to retention funds and competing creditor claims in the
matter of National Buildplan Group Pty Ltd (subject to deed of
company arrangement)
(Buildplan)1.
Buildplan was, prior to its administration, involved in the
construction of residential, commercial, civil and mining
infrastructure projects. Its creditors included employees, secured
creditors and unsecured creditors including a large number of
subcontractors owed payments for retention monies under the
contracts between each subcontractor and Buildplan. Buildplan was
engaged by a number of State government entities to undertake
design and construction works in respect of various projects in New
South Wales. In some cases, these contracts were terminated
