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Axel Johnson Petroleum -v- M.G. Mineral Group

24th May 1991

[1992] 1 W.L.R. 270

Stephen Kenny acted in this leading case on the scope of legal set-off. This case established that, for the purposes of legal set-off, “mutual debts” refers to all liquidated claims, such that a cross-claim for short payment of the price on an earlier contract could be set off against a claim under a later contract for demurrage (liquidated damages). The claim and cross-claim need not arise from connected transactions.

Practice – Summary procedure under Order 14 – Counterclaim – Plaintiffs’ liquidated claim for demurrage – Defendants’ counterclaim for short payment under earlier contract – Defendants’ right to recover on counterclaim triable issue – Whether amount certain – Whether defendants entitled to set off counterclaim – Whether defendants entitled to unconditional leave to defend

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