Overview

On 11 June 2010, the Court of Appeal gave its decision in Geldof Metaalconstructie NV v Simon Carves Limited. In deciding this case, the Court took the opportunity to review and clarify the law on equitable set off – ‘because there appears to be some uncertainty on the subject’ – and also to interpret an express clause in the contract between the parties which the Appellant argued extended the common law right of set off.

As is well known, the defence of set off allows a party receiving a claim to use a counterclaim to reduce or defeat the claim. The right to set off is often dealt with expressly in a contract, failing which, the common law fills the gap. Different rules apply in the case of insolvency, which are not covered here.

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