References: [1958] 2 QB 9
Coram: Buxton LJ, Morris LJ
Ratio: A builder was sued for his failure to complete the works he had contracted for. The buider sought a set-off against that claim of three of his one claims. One, under the contract, was for losses from the defendant’s refusal to allow his workment access, the second was in quantum meruit for the works completed, and the third was inn tort for trespass to his tools.
Held: The court was able to order a set-off of claims between the parties despite the absence of any specific plea in that behalf. Equitable set-off is not confined to debts or liquidated damages and so long as the cross-claim is sufficiently closely connected with the debt as to make it inequitable to take account of one without taking account of the other, then the set-off of the claim operates to reduce or eliminate the debt. Set-off operates by way of a defence. There are three occasions on which set-off is permissible: (1) set-off under the rule replacing the statutes of set-off; (2) what might be called abatement in certain cases at common law; and (3) equitable set-off.
Morris LJ said as to the first occasion: ‘The claims on both sides had to be liquidated debts or money demands which could be ascertained with certainty at the time of the pleading.’ and ‘The plaintiff, suing as agent or trustee for her son, claimed £ 50 from the defendant. The defendant had a perfectly good claim for £ 51 damages against the plaintiff’s son. It was held that the defendant could set up as a defence to the claim against him that the plaintiff’s son (the cestui que trust of the plaintiff) was indebted to the defendant in a sum for unliquidated damages exceeding the amount of the claim.
The conclusion seems to me to be clearly correct and obviously fair. It would have been manifestly unjust if the defendant had had to pay £50 to the plaintiff (who was an agent or trustee for her son) at a time when the defendant had an unquestioned claim of £51 against the plaintiff’s son who had left the country. There was a close relationship between the dealings and transactions which gave rise to the respective claims. If the case had been brought before the Judicature Act it would appear that the defendant would have had strong equitable grounds for asking a Court of Chancery to restrain the plaintiff from proceeding with her case. But since the Judicature Act the position is that matters of equity on which such injunctions might formerly have been obtained, may now be relied on by way of defence.’
This case cites:
- Approved – In re a Bankruptcy Notice CA ([1934] Ch 431)
. . - Examined – Bankes v Jarvis ([1903] 1 KB 549)
The plaintiff was his son’s agent. The son purchased a veterinary surgeon’s practice from the defendant, agreeing to pay the rent and indemnify the defendant against liability under a lease of premises from which the practice was carried on. The son . .
(This list may be incomplete)
This case is cited by:
- Cited – Boynton & Another v Willers CA (Bailii, [2003] EWCA Civ 904)
The appellants challenged a finding that they were liable for their builders’ bill.
Held: Work which had been rejected had not in fact been charged for. The defendant’s appeal on that point failed. The measure of damages for distress and . . - Cited – John Douglas Arthur Platts v Trustees Savings Bank Plc CA (Times 04-Mar-98, Gazette 25-Mar-98, Bailii, [1998] EWCA Civ 241)
A counterclaim for negligent sale was a valid claim allowing potential against repossessing bank but would not make bank’s claim unliquidated. The Judge could properly hold that there was a liquidated and unsecured debt the subject of the statutory . . - Cited – John Smith v Joseph Samuel Muscat CA (Bailii, [2003] EWCA Civ 962, Times 12-Aug-03, Gazette 18-Sep-03, [2003] 1 WLR 853)
The tenant was sued by his landlord for arrears of rent, but sought an equitable set-off for damages for disrepair accruing under the previous landlord.
Held: If the entitlement to recover arrears of rent passes from assignor to assignee, and . . - Cited – Sonia Burkett, Regina (on the Application of) v London Borough of Hammersmith & Fulham CA (Bailii, [2004] EWCA Civ 1342, Times 20-Oct-04)
The appellant challenged an order for costs after dismissal of her application for judicial review of the respondent’s planning decision. The claimant had been granted legal aid at about the time of the bringing in of the new legal aid scheme. The . . - Cited – John Louis Carter Fourie v Allan Le Roux and others CA (Bailii, [2005] EWCA Civ 204, Times 25-Apr-05)
The defendant’s company in South Africa had become insolvent and the claimant had recovered judgment for arrears of rent. They obtained a freezing order against the defendant. The defendant appealed saying the court did not have jurisdiction, and . . - Cited – Mellham Ltd v Collector of Taxes CA (Bailii, [2003] EWCA Civ 173)
Buxton LJ: ‘The issue therefore is one of simple statutory construction. Can the expression ‘payment’ when used in section 87 of the 1970 Act, or ‘pays’ when used both in section 246N(2) of the 1988 Act and section 239 of the 1988 Act, encompass a . . - Cited – Burton (Collector of Taxes) v Mellham Ltd HL (Bailii, [2006] UKHL 6)
The claimant sought interest on an overpayment of Advance Corporation Tax. The tax itself had been paid late, and the Collector claimed a set off.
Held: The claim to DTR could not be described as an attempt at self-help. It had a statutory . . - Approved – Modern Engineering (Bristol) Ltd v Gilbert Ash (Northern) Ltd HL ([1974] AC 689, [1973] 3 All ER 195)
The court considered how to construe a clause in a contract which excluded a remedy provided by law. Lord Diplock said: ‘It is, of course, open to parties to a contract . . to exclude by express agreement a remedy for its breach which would . . - Cited – British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd ChD ([1980] QB 137, Bailii, [1978] EWHC QB 2)
Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence at law to a claim for unpaid rent; and where the tenant has suffered damage . . - Approved – Dole Dried Fruit and Nut Co v Trustin Kerwood Ltd CA ([1990] 2 Ll Rep 309)
Under a distributorship agreement, the defendants’ case was that they were appointed by the plaintiffs as sole and exclusive agents for the importation and distribution in England of the plaintiff’s prunes and raisins. They acquired those products, . . - Cited – Geldof Metaalconstructie Nv v Simon Carves Ltd CA (Bailii, [2010] EWCA Civ 667, [2010] WLR (D) 146, WLRD)
The parties contracted for the supply and installation of pressure vessels by Geldof (G) for a building constructed by Simon Carves (SC). The contract contained a clause denying the remedy of set-off. G sued for the sale price, and SC now sought an . . - Cited – Aries Tanker Corp v Total Transport Ltd; The Aries HL ([1977] 1 WLR 185, [1977] 1 All ER 398)
Claims for freight charges are an exception to the general rule that all claims between parties must be resolved in one action. A claim for freight cannot be a claim ‘on the same grounds’ as a counter-claim for loss or damage arising out of the . . - Cited – Dole Dried Fruit and Nut Co v Trustin Kerwood Ltd CA ([1990] 2 Lloyd’s Rep 309)
The defendant had an exclusive distributorship agency for the plaintiff in England. Under that agreement, the plaintiff sold its products to the defendant under separate contracts of sale. The plaintiff claimed the price of goods sold under the . .
(This list may be incomplete)
Last Update: 28-Aug-16
Ref: 184247
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