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ARTICLE · 07 JUNE 2023

DOCA as a mechanism to preserve SOPA claims

Gilchrist Connell
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Recent decision considered whether an insolvent company entered into a DOCA for a proper purpose.

AustraliaReal Estate and Construction
Hannah Griffiths
Hannah Griffiths
Arvand Ghazizadeh
Arvand Ghazizadeh
Jemimah McLaughlin
Jemimah McLaughlin
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Introduction

The recent decision of Kennedy Civil Contracting Pty Ltd (Administrators Appointed) v Richard Crookes Constructions Pty Ltd [2023] NSWSC 99 considered whether Kennedy Civil Contracting (KCC), a "hopelessly insolvent"1 company, entered into a deed of company arrangement (DOCA) for a proper purpose, where they executed a DOCA to preserve its rights under Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA). Ultimately, the Court was satisfied that executing the DOCA was a legitimate tool to preserve KCC's rights to recover debts due to it under SOPA.

Background

Richard Crookes Pty Ltd (Richard Crookes) was the head contractor of works conducted for a project at Bankstown Airport. In November 2021, Richard Crookes engaged KCC under two subcontracts to carry out various civil, stormwater and associated works.2 Between December 2021 and June 2022, KCC validly served various payment claims on Richard Crookes under the

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