Does the respondent have to set-off damages against the applicant's invoices?

British Columbia, Canada

The following excerpt is from Urban Fireplaces Ltd. v. Catherine Brown dba Kennedy Crawford Design, 2019 BCCRT 98 (CanLII):

33. The respondent did not file a counterclaim. However, I find the respondent’s evidence of expenses is sufficiently connected to the applicant’s claims. In these circumstances, this means the respondent’s damages may be set-off against the applicant’s invoices (see Wilson v. Fotsch, 2010 BCCA 226 for the criteria for equitable set-off).

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