What is the test for equitable set-off?

Ontario, Canada


The following excerpt is from Sound Solutions v. Cladit Siding Solutions Inc. et al, 2018 ONSC 4892 (CanLII):

The relevant principles governing equitable set-off are set out in Holt v. Telford, 1987 CanLII 18 (SCC), [1987] 2 S.C.R. 193, at p. 212: 1. The party relying on a set-off must show some equitable ground for being protected against his adversary’s demands; 2. The equitable ground must go to the very root of the plaintiff’s claim before a set-off will be allowed; 3. 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 into consideration the cross-claim; 4. The plaintiff’s claim and the cross-claim need not arise out of the same contract; [and] 5. Unliquidated claims are on the same foot as liquidated claims. [Citations omitted.] Issues

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