The question was the degree of connection which must be shown between (1) a claim for unliquidated damages for breach of a contract and (2) a cross-claim for unliquidated damages for breach of a different contract between the same parties, in order to permit the latter claim to be the subject of an equitable set-off against the former claim.
Held: The degree of closeness required for an equitable or transaction set-off was that of an ‘inseparable connection’, but it was not necessary that the cross-claim should arise out of the same contract. All that was required was that it should flow from the dealings and transactions which gave rise to the subject of the claim.
Potter LJ said: ‘Like the Judge, I consider that Mr. Turner’s submissions for Blackburn are correct. In so holding, again like the Judge, I regard it as appropriate to apply the test propounded by Lord Brandon in the Bank of Boston case unconstrained by the former concept, difficult to define and apply, of ‘impeachment of title’, which has since been replaced, or at least redefined, in terms of a cross-claim which ‘flows out of and is inseparably connected with the dealings and transactions giving rise to the subject in the claim’. While the circumstances of every case call for individual consideration, it seems to be that the Dole Fruit case provides a useful parallel with the situation in this case. There, the Court was satisfied there was a sufficiently close connection in the case of a claim for the price of goods sold and delivered pursuant to a contract made under the ‘umbrella’ of a distributorship agreement which had been repudiated.’
Judges:
Potter LJ, Sedley LJ, Jonathan Parker LJ
Citations:
[2001] 2 Ll Rep 93, [2001] EWCA Civ 457, [2001] CLC 1166, [2001] 2 Lloyd’s Rep 93
Links:
Jurisdiction:
England and Wales
Cited by:
See also – Bim Kemi Ab v Blackburn Chemicals Ltd ComC 30-Jan-2002
. .
See also – Bim Kemi Ab v Blackburn Chemicals Ltd CA 13-Feb-2003
. .
See also – Bim Kemi Ab v Blackburn Chemicals Ltd CA 24-Jun-2003
It had been argued by the claimant in written submissions (although not maintained orally) that an order for payment of pre-judgment interest on costs should never be made. As to an award of interest on costs:- ‘In any event in principle there seems . .
See also – Bim Kemi Ab v Blackburn Chemicals Limited ComC 6-Feb-2004
. .
Cited – Benford Ltd and Another v Lopecan Sl QBD 30-Jul-2004
The parties disputed the coverage agreed under a distribution agreement.
Held: ‘The counterclaim operated as a defence by way of set off. In order to establish that defence the defendant will have to prove the losses pleaded . . . Until the . .
Cited – Inveresk Plc v Tullis Russell Papermakers Ltd SC 5-May-2010
The parties had undertaken the sale of a business (from I to TR) with part of the consideration to be payable on later calculation of the turnover. The agreement provided for an audit if the parties failed to agree. TR issued a figure. I argued that . .
See Also – Bim Kemi Ab v Blackburn Chemicals Ltd SCCO 24-Jun-2003
. .
See Also – Blackburn Chemicals Ltd v Bim Kemi Ab CA 10-Nov-2004
The parties entered into exclusive cross marketing agreements. The defendant resisted enforcement of the contract saying it was void under European law, being contrary to Article 81. The parties were alleged to have agreed to make cross purchases. . .
Cited – Geldof Metaalconstructie Nv v Simon Carves Ltd CA 11-Jun-2010
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 . .
Lists of cited by and citing cases may be incomplete.
Equity, Contract
Updated: 23 May 2022; Ref: scu.135513
