In a prior Decision in an employment law matter, Justice Mah found that the Plaintiff was entitled to judgment as against the Defendant for bonus payments during the notice period, but the Plaintiff had been overcompensated as a result of payments made by the Defendant to the Plaintiff and mitigation income. Mah J. reserved Judgment with respect to whether the remedy of “set-off” was available to the Defendant who had not pleaded set-off in their Statement of Defence or Counterclaim.

Mah J. noted that Rule 3.59 is permissive; it states that “[a] matter that might be claimed by set-off may be claimed by counterclaim or by pleading set-off as a defence.” This language differs from the prescriptive language contained in the former Rule 93(2) which stated, “[a]ll matters which might be pleaded by way of set-off shall if it is desired to set the same up in the action, be pleaded by way of counterclaim.” Moreover, set-off is not included in the list of claims that are required to be pleaded pursuant to Rule 13.6(3). Mah J. observed that, apart from set-off not being specifically listed in Rule 13.6, the claim for set-off by the Defendant would not have taken the Plaintiff by surprise. The Plaintiff had been advised of the Defendant’s position by letter correspondence some four years earlier. Therefore, there would be no prejudice in allowing the Defendant’s claim for set-off.

Mah J. determined that set-off was available to the Defendant notwithstanding that they had not pleaded the remedy in their Statement of Defence or Counterclaim.