Derham on the Law of Set-Off

1
	Dedication
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
2
	Preface
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
		Footnotes:
3
	Preface to the First Edition
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
4
	Contents—Summary
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
5
	Contents
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
6
	Table of Cases
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
7
	United Kingdom
		Primary Legislation
	Table of Legislation, Treaties, and conventions
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
			Secondary legislation
	Europe
		Directives
		Regulations
		Treaties and Conventions
	Australia
		Commonwealth
		Australian Captial Territory
		(p. cxvii) New South Wales
		Northern Terrritory
		Queensland
		South Australia
		Tasmania
		Victoria
		Western Australia
	Bermuda
	(p. cxix) Hong Kong
	Ireland
	New Zealand
	Singapore
	International
8
	1 Introduction
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 1) 1  Introduction
	A. The Meaning of Set-off
	B. The Importance of Set-off
		(1)  Insolvency
		(2)  Counterclaim
		(3)  Costs
		(p. 5) (4)  Third party interests
		(5)  Arbitration
	C. The Forms of Set-off
	D. Civil Procedure Rules
	(p. 8) E. Applicable Law For Determining The Existence of a Cross-Claim
		Footnotes:
9
	2 Set-Off between Solvent Parties: Common Law
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 9) 2  Set-Off between Solvent Parties: Common Law
	(p. 10) A. Early Developments
	B. Statutes of Set-off
		(1)  Introduction
			Australia
		(2)  When must the set-off be available?
		(3)  Mutuality
		(4)  The requirement of debts
			What is a ‘debt’?
			(p. 17) Alternative causes of action
			Demands closely analogous to debts
			Claims on guarantees
			Indemnities
		(5)  Due and payable
		(6)  Freight and negotiable instruments
		(7)  Trustees
	C. The Statutes of Set-off as a Procedural Defence
		(1)  The procedural nature of the defence
			(p. 24) Concepts inherent in describing the defence as procedural
			Parker v Jackson criticized
		(2)  Cross-debt must be enforceable by action
			Limitation Act
			Unenforceable on other grounds
		(3)  Cross-debt must be able to be determined in the plaintiff\'s action
	D. Substantive Aspects of the Defence
		Acceleration and termination clauses
	(p. 34) E. Equitable Remedies
		Forfeiture and possession
	F. The Statutes of Set-off in Australia
		(p. 36) (1)  New South Wales
			Civil Procedure Act 2005 (NSW), s. 21
		(2)  Criticism of the Stehar Knitting Mills case
			The defence is not wholly procedural
		(3)  Queensland
		(4)  Victoria
	(p. 45) G. Connected Cross-Demands at Common Law
	H. Judgments
		(p. 47) (1)  Pleading a judgment debt as a defence under the Statutes
		(2)  Stay on enforcement of a judgment on the basis of an unlitigated cross-claim
			Equitable set-off
			Cross-claim accruing after judgment
		(3)  Setting off judgments and orders348
			The nature of the set-off
			Mutuality
			(p. 58) Assignment
			Bankruptcy
			Solicitor\'s lien
			Legal aid
	I. Common Law Abatement
		(1)  General principle
		(2)  Substantive or procedural?
		(3)  Abatement is distinct from equitable set-off
		Footnotes:
10
	3 Set-Off between Solvent Parties: Equitable Set-Off
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 73) 3  Set-Off between Solvent Parties: Equitable Set-Off
	A. Introduction
		(1)  Money claims
	B. The Forms of Equitable Set-off
		(1)  Implied agreement
		(p. 75) (2)  Equitable proprietary estoppel
		(3)  Acting by analogy with the Statutes
		(4)  Substantive equitable set-off
		Footnotes:
11
	4 Substantive Equitable Set-Off
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 79) 4  Substantive Equitable Set-Off
	A. The Traditional Formulation
	B. New Approaches
	C. Equitable Set-off in Australia
	D. The Substantive Nature of Equitable Set-off
		(1)  What is meant by ‘substantive’?
		(2)  Some possible problems
		(3)  Is the set-off confined to litigation?209
		(4)  Right to take action consequent upon default229
		(5)  Action taken by a creditor before a set-off has been asserted
		(6)  Estimating the value of the cross-claim
		(7)  Statute of limitation
		(8)  Arbitration and foreign jurisdiction clauses
		(9)  Interest
		(10)  Winding-up petition
	E. Discretion
	F. Liquidated Cross-Claims
		(1)  Contingent debts, and debts not yet payable
	G. Mutuality319
		(1)  Is mutuality always necessary?
		(2)  Misrepresentation inducing a contract with a third party
		(3)  Guarantees and related parties
		(4)  A deposit as security, where the depositor is not personally liable
	H. Different Contracts
		(1)  Overriding agreements
	I. Creditor\'s Conduct Affecting Debtor\'s Ability to Pay
	(p. 138) J. Repudiation of a Contract
		(1)  Contracts requiring periodic performance
		(p. 139) (2)  Repudiation of an overriding agreement
	K. Misrepresentation, Fraud, and Misleading or Deceptive Conduct
		(1)  Misrepresentation inducing a contract
		(p. 143) (2)  Fraudulent claim on a contract
		(p. 144) (3)  Misleading or deceptive conduct in Australia
	L. Limitation on Liability
	(p. 146) M. Periodic Payments
	N. Mortgages
		(1)  The scope of equitable set-off
		(p. 149) (2)  Mortgage to secure the unpaid price of property sold
		(3)  Payment of the price by way of a loan from the vendor
		(4)  Enforcing rights under the mortgage
		(5)  Claim for possession, where possession does not depend on default
		(6)  Remedies dependent upon default
			(p. 154) Restraining the exercise of a power of sale
			Restraining other remedies dependent upon default
			Action for possession, where possession depends upon default
		(7)  Statutes of Set-off
		(p. 162) (8)  Rent payable to a mortgagee in possession
		Footnotes:
12
	5 Set-Off between Solvent Parties: Various Aspects
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 163) 5  Set-Off between Solvent Parties: Various Aspects
	A. Charterparties and Bills of Lading
		(1)  Equitable set-off and abatement – freight under a voyage charter or bill of lading
		(2)  Equitable set-off – hire under a time charter
		(3)  The justification for the freight rule
		(4)  The Statutes of Set-off
		(5)  Bill of lading freight when the vessel is chartered
	B. Negotiable Instruments, Letters of Credit and Direct Debits
		(1)  Negotiable instruments – equitable set-off
			Stay of execution
			Can ‘exceptional circumstances’ affect the entitlement to judgment?
			Circumstances which may provide a defence
			Debt on a negotiable instrument pleaded as a defence
		(p. 183) (2)  Setting aside a statutory demand
		(3)  Insolvency set-off
		(4)  Negotiable instruments – Statutes of Set-off
		(5)  Statutes of Set-off – set-off against a subsequent holder
		(6)  Letters of credit
		(7)  Direct debit
	(p. 193) C. Building and Construction Contracts
		(1)  General principle
		(2)  Housing Grants, Construction and Regeneration Act 1996
		(3)  ‘Security of payment’ legislation in Australia
		(4)  Excluding or limiting equitable set-off and abatement by contract
	D. Contracts of Employment
		(1)  Failure to work
		(2)  Claim for damages
		(3)  Insolvency set-off
	(p. 203) E. Landlord and Tenant
		(1)  Equitable set-off
		(2)  Forfeiture for non-payment of rent
		(3)  Distress
		(4)  Payment in satisfaction of an obligation of the landlord
		(5)  Recoupment
	F. Specific Performance
	(p. 216) G. Set-off as a Sword
		(1)  Equitable set-off
		(2)  Statutes of Set-off
	H. Foreign Currencies
		(1)  Statutes of Set-off
		(p. 219) (2)  Equitable set-off
	I. Contracting Out of Set-off
		(1)  Equitable set-off and common law abatement
			General principle
			Payment ‘without deduction’
			The effect of specifying some deductions
			Stay of execution
			Negligence claims
			Arbitration clauses
			Conclusive evidence certificate
		(2)  Unfair Contract Terms Act 1977
		(3)  Misrepresentation Act 1967
		(4)  Building and construction contracts527
			Australia
		(5)  Statutes of Set-off
			Clear words
			Waiver
		(p. 243) (6)  Second ranking security, and subordination
		(7)  Agreement not to assign
		(8)  Estoppel, and credit notes
		(p. 244) (9)  Payment in advance
		(10)  Company under administration
	J. Failure to Assert a Cross-claim as a Defence
		(1)  Introduction
		(2)  Australia
		(3)  Statutes of Set-off
		(4)  Common law abatement
		(5)  Equitable set-off
		(6)  Default judgments
		(7)  Dismissal of cross-claim for want of prosecution
		(8)  Discontinuance
	K. Criticisms of the State of the Law of Set-off
		Footnotes:
13
	6 Set-Off in Bankruptcy and Company Liquidation
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 259) 6  Set-Off in Bankruptcy and Company Liquidation
	A. Set-off in Bankruptcy
	(p. 262) B. Companies
		(1)  Company liquidation
			(p. 265) Leave to proceed not necessary
		(2)  Administration
		(3)  Bank insolvency and bank administration under the Banking Act 2009
		(p. 269) (4)  Company voluntary arrangement and individual voluntary arrangement
	C. The Rationale for Insolvency Set-off
	D. The Statutes of Set-off, Equitable Set-off and Counterclaim in Bankruptcy and Liquidation
		(1)  Counterclaim
		(2)  Statutes of Set-off
		(3)  Equitable Set-off
	(p. 278) E. Early Development, and the Influence of Equity
		(p. 279) (1)  Competing explanations
	F. The Development of the Set-off Section
	G. The Relevant Date for Determining Rights of Set-off
		(1)  Bankruptcy, company liquidation and administration
			Company liquidation
			Administration
		(2)  Australia – bankruptcy
		(3)  Australia – company liquidation, administration and deeds of company arrangement
		(4)  Claims accruing subsequent to the relevant date
			Receipt of money by an agent after the principal\'s bankruptcy
			Unaware of the bankruptcy
	H. Qualification to the Set-off Section
		(1)  Onus
		(2)  What constitutes notice?
		(3)  Bankruptcy
		(4)  Company liquidation
		(5)  Administration
		(6)  Australia – bankruptcy
		(7)  Australia – company liquidation
		(8)  The identity of the party asserting the set-off
		(9)  The meaning of ‘due’ (England), and the time of giving credit (Australia)
		(10)  Assignment of a debt
	I. Assignment of a Debt as a Preference
	(p. 313) J. Temporary Suspension of Mutual Credit
	K. The Necessity for Cross-Demands
	L. Enforceable Demands
	M. Insolvency Set-off is Mandatory
		(1)  Contracting out of insolvency set-off
		(2)  Agreement not to prove
		(3)  Subordinated debt
		(4)  Ancillary liquidation
	N. The Nature of Insolvency Set-off
		(1)  Automatic or procedural?
			Company liquidation
			Administration
		(2)  Advantages and disadvantages of the automatic theory
		(p. 327) (3)  Pleading set-off as a defence to an action by a trustee in bankruptcy
		(4)  Contingent debts and claims: the use of hindsight
			Hindsight and estimation
			The difficulty with hindsight as an explanation in bankruptcy
			‘Hindsight’ has become a fiction
		(5)  BCCI v Habib Bank criticized
		(6)  Australia
	O. Foreign Currencies
		(1)  Proof of debts
		(2)  Set-off
		(3)  Insolvent\'s foreign currency cross-claim exceeds the creditor\'s provable debt
	P. Interest
	Q. Set-off as a Void Disposition of Property
	(p. 346) R. Mistake as to Set-off
		(1)  Payment to the insolvent\'s estate without asserting a set-off
		(2)  Creditor proves without asserting a set-off
		(3)  Rejection of the creditor\'s proof
		(4)  Mistake as to the valuation of a contingent debt in a set-off
	S. Multiple Claims, and Preferential Debts
		(1)  General principle
		(2)  Lloyd\'s syndicates
	(p. 352) T. Secured Debts
		(1)  Security provided by the insolvent
		(2)  Security held by the insolvent
		(p. 354) (3)  Payment to the secured creditor
		(4)  Surplus proceeds, after realizing the security
		(5)  A debt as property the subject of a security
		Footnotes:
14
	7 Debts, Credits, and Dealings
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 355) 7  Debts, Credits, and Dealings
	A. The Meaning of Debts, Credits, and Dealings
		(1)  Debts and credits
		(2)  Dealings
		(3)  Non-contract claims
	B. The Necessity for a Dealing
	C. Different Dealings and Contracts
	D. The Insolvent\'s Liability
	E. The Insolvent\'s Claim
		(1)  The insolvent\'s claim and provability
		(2)  The bankrupt\'s claim must vest in the trustee
		(3)  Assignment of a debt
		Footnotes:
15
	8 Claims Susceptible to Insolvency Set-Off
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 375) 8  Claims Susceptible to Insolvency Set-Off
	A. Presently Existing Debts
		(1)  Presently payable or payable in the future
			Presently payable
			Payable at a future date
		(2)  Unquantified or unascertained debts
		(3)  Discount for early payment
		(4)  Capitalized interest
	B. Contingent Debt Owing by the Insolvent
		(1)  Costs order after insolvency
		(2)  Statutory contingent debt
		(3)  The rule against double proof
			The meaning of the rule
			Guarantee limited to a stated amount
			Guarantee of the whole debt, where there is part payment
			Contribution between guarantors
			Set-off
		(4)  Set-off where there is no double proof issue
			The ‘in principle’ position
			The cases
			Must the debt be exclusively referable to a prior agreement?
			Surety paying after the debtor\'s bankruptcy
		(p. 391) (5)  Subrogation, where the creditor had proved before the surety\'s payment
			Acquisition of an interest after bankruptcy or liquidation
			(p. 393) Surety\'s set-off where the creditor had received a dividend
		(p. 394) (6)  Must the contingency have occurred?
	C. Contingent Debt Owing to the Insolvent
		(1)  Set-off, when the debt is still contingent
		(2)  Set-off, after the contingency has occurred
			(p. 399) Likelihood of the contingency occurring
			Proof in the contingent creditor\'s insolvency before the contingency occurs
			Contract for the sale of property or for the performance of work
	D. Insolvent Corporate Group
	(p. 402) E. Damages Claims
		(1)  Breach of contract
		(2)  Tort
			The necessity for a dealing
			Bankrupt\'s claim must vest in the trustee
			Australia
			Misrepresentation inducing a contract with a third party
	(p. 408) F. Breach of Trust
	G. Calls on Shares
		(1)  Introduction
		(2)  Rationale
		(3)  Set-off asserted by the company rather than by the contributory
		(4)  Assignment
		(p. 414) (5)  Solvent company
		(6)  Bankrupt contributory
		(p. 416) (7)  Contributory is a company in liquidation
		(8)  Costs and expenses of the winding up
		(9)  Unlimited companies
		(10)  All creditors have been paid in full
		(11)  Debt for equity swap
	H. Basing a Claim for a Set-off upon a Wrongful Act
		(1)  Misfeasance claims against directors and promoters
		(2)  Breach of trust in dealing with another\'s property and fraud
		(3)  Deliberate breach of contract in order to obtain a set-off
		(4)  Breach of contract in not establishing a trust
		Footnotes:
16
	9 Commensurable Demands
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 425) 9  Commensurable Demands
	A. The Requirement of Commensurability
		(1)  The principle
		(2)  Rolls Razor v Cox criticized
	B. Repudiation, and Specific Performance
		(1)  Insolvency as a repudiation
		(2)  Specific performance
		(p. 431) (3)  The adequacy of damages
	(p. 432) C. Foreign Exchange Contracts54
		(1)  Introduction
		(2)  The nature of the foreign money obligation
		(p. 435) (3)  Set-off consequences if the obligation is not a monetary obligation
		(4)  A recent view – Camdex v Bank of Zambia
		Footnotes:
17
	10 Trust Funds
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 437) 10  Trust Funds
	A. Introduction
	(p. 438) B. Insolvency Set-off
		(1)  The general principle
		(2)  Express stipulation for a trust
		(3)  An exception
	C. Statutes of Set-off
	(p. 442) D. Dissipation of the Trust Fund
	E. Equitable Set-off
	(p. 445) F. Authority to Turn Property into Money – Rose v Hart
		(1)  The general principle
			Set-off against a trust fund
			Proceeds received before the bankruptcy
		(2)  The circumstances in which the set-off applies
			Authority to turn property into money
				The remedies under the Torts (Interference With Goods) Act
				Destruction of the goods
			Money claims
			Unrevoked authority
				Bankruptcy and liquidation as a revocation of authority
				Demand for the return of the goods by the depositor\'s trustee in bankruptcy
			Deposit of property
	G. Surplus Proceeds after Realizing a Security
		(1)  Mortgagee\'s right of retainer, and tacking
		(2)  Set-off against a trust fund
		(3)  Deceased\'s insolvent estate
		(4)  Proceeds received before the debtor\'s insolvency
		(5)  Proceeds received after the debtor\'s insolvency
		(p. 462) (6)  Criticism of the cases
	H. Special-Purpose Payments
		(1)  Failure of the purpose
		(2)  Residue remaining after the purpose is carried out
		(3)  Collection of the proceeds of a negotiable instrument
		(p. 464) (4)  The justification for denying a set-off
		(5)  Bank accounts, and other debt relationships
		(6)  The principle re-phrased
		Footnotes:
18
	11 Mutuality – Introduction
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 471) 11  Mutuality – Introduction
	A. The Meaning of Mutuality
		(1)  Mutuality defined
		(2)  Double insolvency
		(3)  The necessity for mutuality
	(p. 478) B. Equitable Interests – Insolvency Set-off
		(1)  Fundamental principle
		(2)  Beneficial title acquired after the relevant date
		(p. 480) (3)  Insolvent assignor or trustee
		(4)  Insolvent beneficial owner
	C. Statutes of Set-off
	D. Ascertained Beneficial Interests
		(1)  Proof of a presently existing beneficial interest
		(2)  Mixed account
		(3)  Insolvency set-off
	E. Security Over a Debt
		(1)  Introduction
		(2)  Assignment by way of mortgage
			Assigned debt exceeds the secured debt
			Auctioneer\'s lien
			Set-off between the mortgagee and the debtor
			Secured creditor has other security
		(3)  Fixed charge
			Statutes of Set-off
		(4)  Floating security176
		(5)  Redemption of the security
		Footnotes:
19
	12 Mutuality – Same Parties
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 501) 12  Mutuality – Same Parties
	A. Introduction
	(p. 502) B. Joint Claims and Liabilities
		(1)  The general principle
		(p. 503) (2)  Parties may act to bring about a set-off
		(3)  Severance of a joint claim
		(4)  Insolvency set-off and partnerships
		(5)  Equitable interests
	C. Exceptions
		(1)  Surety made jointly liable
		(2)  Judgments
		(3)  Fraud
		(4)  Dormant partner
		(p. 510) (5)  Common partners in two partnerships
		(p. 511) (6)  Setting off a joint creditor\'s interest in the debt
	(p. 512) D. Several Persons Separately Liable
		(1)  Joint and several debt
		(2)  Guarantees and bills of exchange
		(3)  Re BCCI (No. 8) – a choice of remedy?
		(4)  Ex p Stephens explained
		(5)  Set-off between the creditor and the principal debtor as a discharge of the surety
	E. Separate Depositor does not Assume a Personal Obligation
		(1)  Obligation to set off
	F. Deceased Insolvent Partner
		Footnotes:
20
	13 Mutuality – Same Right
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 527) 13  Mutuality – Same Right
	A. Introduction
		(1)  Different personal capacities
		(2)  Trustees in bankruptcy
		(3)  The effect of company liquidation
	B. Transactions Impugned by an Insolvency Office-Holder
		(1)  Preferences
			Bankruptcy
			Company liquidation
			Administration order in relation to a company
			(p. 534) No preference if a set-off would have been available
			Other arrangements constituting preferences
			Desire to produce a preference
			Acting inconsistently with a right to avoid a transaction
			(p. 537) Right of proof
		(2)  Australia – preferences in company liquidation
		(3)  Other impugned transactions
		(4)  Insolvent trading in Australia
		(5)  Assignment of book debts
		(6)  Set-off, after the avoidance of an assignment of a debt
	C. Performance of Contracts after Insolvency
		(1)  Disclaimer
			Bankruptcy
			Company liquidation
		(2)  Contract by insolvent to sell property or perform work
			Beneficial ownership had vested in the purchaser before the vendor\'s insolvency
			Beneficial title had not passed before the vendor\'s insolvency
			The Ince Hall case
			Criticism of Ince Hall
				Receivership
				Assignment of future business receipts
			Conclusion in relation to the Ince Hall case
			The relevance of the time that property passed
		(3)  Contract to sell property to or to perform work for an insolvent
		(4)  Options
	D. Leases
		(1)  Bankruptcy
			Mutuality
			(p. 568) Bankrupt landlord
		(p. 570) (2)  Company liquidation
			Extent of the right of proof for rent
			Landlord in liquidation
	E. Periodical Payment Obligations after Insolvency
	F. Agency
		(1)  Introduction
		(2)  Set-off agreement between the agent and the third party349
		(3)  Undisclosed principals
			Insolvency set-off
			Equitable set-off
			Existing debts before notice
			Knowledge of the agency
			Duty of inquiry
			Basis of the set-off
		(4)  Set-off between the principal and the third party
			Auctioneer\'s lien
			Undisclosed principal
			Unnamed principal
		(5)  Set-off between the agent and the third party, where the agent can enforce the contract502
			Insurance brokers in marine insurance
			Non-marine insurance
		(6)  Set-off against an agent with a lien, where the agent cannot sue
		(p. 597) (7)  Del credere commissions
		(8)  Set-off between the agent and the third party, where the agent is personally liable as agent
		(p. 600) (9)  Set-off between the principal and the agent
	G. The Crown
		(1)  General principle
		(2)  Government departments
		(3)  Criticism of Crown set-off
		(4)  Public corporations
		(5)  The federal system in Australia
	H. Set-off in Relation to a Deceased\'s Estate
		(1)  Executors and administrators
			Two cases in which a set-off was permitted
		(2)  Set-off between a third party and a deceased\'s estate
			(p. 608) Equitable set-off, and the Statutes of Set-off
			Bankruptcy
			Debts incurred by the personal representative
			Charge on the estate for costs and expenses
		(3)  Set-off by a beneficiary of the estate
		Footnotes:
21
	14 The Rule in Cherry V Boultbee
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 613) 14  The Rule in Cherry V Boultbee
	(p. 614) A. Introduction
		(1)  The nature of the principle
	B. Executor\'s Right of Retainer
	C. The Scope of the Rule
		(p. 618) (1)  Bankruptcy and company liquidation
		(2)  Equitable principle
		(3)  The requirement of a fund
		(4)  As a condition of equitable relief
	D. Who May Invoke the Rule?
		(1)  Can the contributor be required to pay in full?
	E. Enforceable Rights and Obligations
		(1)  Unenforceable obligation to contribute
		(2)  Right to participate must be due and payable
		(3)  Obligation to Contribute Must Not Have Ceased to Exist
	F. Mutuality
		(1)  Bankruptcy121
		(2)  The Relevant Date
		(3)  Mutuality Is Concerned with the Relationship to the Fund
		(4)  Same Fund
		(5)  Settlement Involving Two or More Funds
		(6)  Joint and Separate Rights and Obligations
	G. The Obligation to Contribute
		(1)  Damages Liability
		(p. 635) (2)  Contingent, or Not Presently Payable
		(3)  Contribution Need Only Be ‘in Aid of’ the Fund
		(4)  There Must Be an Obligation
		(5)  Interest
	H. The Right to Participate
	I. Discretionary Relief
	J. Suretyship, and the Rule against Double Proof
	(p. 648) K. Waiver, and Proof of Debt
	(p. 651) L. Assignments
		(1)  The general principle
			Exceptions
			(p. 652) A competing principle
		(2)  Presently existing rights and obligations
			Not presently payable at the date of notice
			Contingent obligation to contribute
		(3)  Costs in pending proceedings
		(4)  Assignee has an obligation to contribute
		(5)  Agreement not to assert equities against assignees
		(p. 659) (6)  Successive Assignments
	M. Defaulting Trustee who is also a Beneficiary
		(1)  First formulation
		(2)  Second formulation
		(3)  Consequences of the formulations
		(4)  Non-monetary bequest
		(5)  Bankrupt defaulting trustee
	N. The Method of Application of Cherry v Boultbee
		(p. 667) (1)  Right to participate is for a percentage of the fund
		(2)  Insolvent contributor
		(3)  Two insolvent estates
		Footnotes:
22
	15 Combination of Bank Accounts
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 675) 15  Combination of Bank Accounts
	(p. 676) A. Introduction
	B. The Nature of the Right of Combination
		(1)  Distinguished from lien and set-off
		(2)  The cases
		(3)  Cases supporting the contrary view
	C. Criticisms
		(1)  Interest
		(2)  Clayton\'s Case, and the order of combination
		(3)  Guarantees and securities
		(4)  Notice of combination
		(5)  The bank\'s right, and different branches
		(6)  Time bars
	(p. 698) D. Banker and Customer Relationship
		(1)  Banking business
			Lease finance facilities
		(2)  Guarantor of another customer\'s debt
		(3)  Joint account
		(4)  Different names
	E. The Scope of Combination
		(1)  Not confined to current accounts
		(2)  Bills of exchange and promissory notes
		(p. 704) (3)  Presently matured obligations
	F. Express and Implied Agreements to Keep Accounts Separate
		(1)  Current account and a loan account
		(2)  Current account and other accounts
		(3)  Deposit account upon which cheques cannot be drawn
		(p. 707) (4)  Termination of the banker/customer relationship
		(5)  Freezing an overdrawn account and opening a new account
		(6)  Agreement to exclude set-offs
		(7)  Bank\'s conduct precluding combination
		(8)  Deposit for a specific purpose
		(9)  Consequences of an agreement to keep accounts separate
	G. Combination and Nominee Accounts
		(1)  Collecting a cheque for another person
	H. Agreements Permitting Combination
		(1)  Contingent obligation
		(2)  Account subject to an assignment or a trust
		(3)  Customer\'s liquidation
	(p. 718) I. Different Currencies
	J. Freezing Injunctions and Restraint Orders
	K. Preferences
	L. Trust Accounts
		(1)  Introduction
		(2)  The requirement of a trust
		(p. 725) (3)  The defence of bona fide purchaser for value
			Knowledge of the trust
				The difference between knowledge and notice
			(p. 727) Trust moneys paid directly into an overdrawn account
			The bank as ‘recipient’
			The degree of knowledge required
			The relevant time for knowledge
			Value
		(4)  Set-off agreement
		(5)  Labelling an account as a trust account, where the customer is not a trustee
		(6)  Account containing both trust and personal moneys
		(p. 738) (7)  Overdrawn trust account
	M. Assignments489
	(p. 739) N. Deceased Customer
	O. Banker\'s Lien Over a Negotiable Instrument
		Footnotes:
23
	16 Set-off Agreements
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 741) 16  Set-off Agreements
	A. Introduction
		(1)  Contingent debts
	B. Insolvency
		(p. 744) (1)  Preferences and other impugned transactions
		(2)  Preferences in Australia – bankruptcy
		(3)  Preferences in Australia – company liquidation
	C. Set-off Agreement Taking Effect Contrary to the Pari Passu Principle
		(1)  The ‘British Eagle’ principle
		(2)  Legislation in relation to investment exchanges and clearing houses
			Australia
		(3)  Contractual set-off against an insolvent\'s liability
	D. Close-out Netting
	E. Regulations Giving Effect to EC Directives in Relation to Netting
	F. Netting in Australia
		(1)  Payment Systems and Netting Act 1998 (Cth)
			Close-out netting, where a set-off would not otherwise have been available
			Multilateral netting
	(p. 777) G. An Administrator\'s Indemnity and Lien in Australia
	H. Partnerships
	(p. 779) I. Taking a Charge Over One\'s own Debt
		(1)  The conceptual impossibility argument
		(2)  Charge-backs and mutuality
		(3)  Charge-back and combination of accounts
		(4)  Registration
	J. A Set-off Agreement as a Charge
	K. Flawed Asset
		Footnotes:
24
	17 Assignees, and other Interested Third Parties
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 807) 17  Assignees, and other Interested Third Parties
	A. Introduction
	(p. 809) B. Assignments5
		(1)  Equitable assignment
		(2)  Statutory assignment
		(3)  Australia: Personal Property Securities Act 2009 (Cth)30a
		(4)  Cross-demand must be available as a set-off against the assignor
			Claim for freight, and claim on a negotiable instrument
			Australia: Personal Property Securities Act 2009 (Cth)
		(5)  Statutes of Set-off
			Date of notice
			Presently payable
			Subsequent debt arising out of a prior contract
		(6)  Set-off in Australia99
			New South Wales and Queensland
			Victoria
		(7)  Notice to the debtor
			Australia: notice under the Personal Property Securities Act 2009 (Cth)
		(8)  Assignment of a future debt
			Prior contract
			An expectancy not derived from a present contract
			Australia: Personal Property Securities Act 2009 (Cth)
		(9)  Equitable set-off
		(10)  Insolvency
			Insolvent assignor
			Insolvent debtor
			Insolvent assignee
		(11)  Agreement not to assert set-offs
		(12)  Conduct of the debtor
		(13)  A set-off agreement as an equity
			Set-off simply by virtue of the agreement
			Option to effect a set-off
			Transaction entered into before notice
			Transaction entered into after notice
			(p. 842) Security over a debt
			Subsequent set-off agreement
		(14)  Successive assignments
		(15)  Marshalling
			Different rights
		(16)  Assignment merely of the proceeds of a debt
		(17)  Assignment of part of a debt
		(18)  Debts transferable at common law in their own right
			(p. 850) Negotiable instruments
		(19)  Leases and mortgages
			Mortgage of leased premises – Reeves v Pope
			Sale of leased premises
				Sale of leased premises – both breach of covenant and accrued rent before the sale
				Sale of leased premises – breach of covenant before the sale and rent accruing after the sale
			Breach of covenant by the mortgagee or purchaser
			Mortgages in Australia
			Tenant\'s right of recoupment against a mortgagee or purchaser
		(20)  Freight payable to a mortgagee or purchaser of a ship
		(21)  Transfer (or sub-mortgage) of a Torrens mortgage in Australia
		(22)  Judgments and orders
	C. Security Over a Debt
		(1)  Introduction
		(2)  Australia: Personal Property Securities Act 2009 (Cth)
		(3)  Statutes of Set-off
			The general principle
			Cross-debt arising after notice pursuant to a prior contract
			Set-off asserted by the company
			Debt to the company arising after notice but pursuant to a prior contract
			Contract entered into after notice
		(4)  Equitable set-off560
		(5)  Debt owing to the company exceeds the secured debt
		(6)  Liquidation
		(7)  Preferential debts
	D. Court-Appointed Receiver on the Application of a Secured Creditor
		(1)  Manager appointed by a leasehold valuation tribunal
	E. Trusts597
		(1)  Set-off between the trustee and a third party
			Equitable set-off
			Abatement
			Statutes of Set-off, and insolvency set-off
				Trustee\'s lien
				Subrogation
				Debt owing to the trustee in his personal capacity
		(2)  Taking subject to equities
		(3)  Receipt of trust moneys in breach of trust
		(4)  Set-off between a beneficiary and a third party
			Beneficiary has a personal claim against a trust creditor
			Beneficiary personally liable to a trust debtor
		(5)  Set-off between trustee and beneficiary
	F. Execution of Judgments
		(1)  Introduction
		(2)  Third party debt order
			Cross-debt payable at a future date
			Trust money
			Debt owing by the judgment creditor
			Insolvency
		(p. 898) (3)  Charging orders
		(4)  Appointment of a receiver by way of equitable execution
	G. Notice Under Section 260-5 of the Taxation Administration Act in Australia
	H. Subrogation
		(1)  Insurance subrogation
		(2)  Subrogation in other situations
	I. Contracts (Rights of Third Parties) Act 1999801
		Footnotes:
25
	18 Sureties
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
	(p. 909) 18  Sureties
	A. Principal Debtor\'s Right to Require a Set-off
	B. Set-off Available to the Guarantor
	(p. 912) C. Guarantor\'s Right to Rely on the Principal Debtor\'s Set-off
		(1)  Set-off agreement
		(2)  Solvent set-off – the various approaches
		(3)  Equitable set-off and common law abatement
			Explanation of the set-off
			An objection that has been raised
			Joinder of the principal
		(4)  Statutes of Set-off
		(5)  Cross-action not available as a set-off
		(6)  Insolvency set-off
			Two debts owing to the creditor
		(7)  Contract excluding the defence
			Insolvency set-off in the debtor\'s bankruptcy or liquidation
	D. Mortgage Given to Secure Another Person\'s Debt
	E. Surety\'s Right to Rely on a Co-Surety\'s Set-off
	F. Set-off Between the Surety and the Principal Debtor
		Footnotes:
26
	(p. 933) Bibliography
	1. Books
	Bibliography
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham
			2. Articles, Notes Etc
27
	(p. 941) Index
	Index
		From: Derham on the Law of Set-Off (4th Edition)
		Rory Derham