This brings into play the principles of equitable set-off as articulated in Holt v. Telford [1987] 2 S.C.R. 1993. In that case the principles were enunciated as follows: (a) The party relying on equitable set-off must show some equitable ground for being protected against his adversary’s demands. (b) The equitable ground must go to the very root of the plaintiff’s claim before a set-off will be allowed. (c) A cross-claim must be so clearly connected with the demand of the plaintiff that it would be manifestly unjust to allow the plaintiff to enforce payment without taking the cross-claim into consideration. (d) The plaintiff’s claim and the cross-claim need not arise out of the same contract. (e) Unliquidated claims are on the same footing as liquidated damage claims.
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