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Abstract

This paper examines the tests used to determine whether a classical equitable set-off arises between two claims. A classical equitable set-off subtracts one claim from another where there is a particular nexus between them. This author argues that the orthodox approach, to inquire whether the counter-claim ‘impeaches’ the claim, appropriately identifies the nexus. The alternative approach, to set off claims that are inseparably connected is flawed. It proceeds upon a misunderstanding of the Judicature Act and certain decisions. The final alternative, the manifest injustice test, should not be endorsed because it assumes the fusion of law and equity and a superseded approach to consideration.

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