The appellant, Union Gas Limited, appealed an order made in CCAA proceedings regarding its right to set off amounts owed by the respondent, Algoma Steel Inc., against a rebate owed to the respondent.
The motions judge had denied legal set-off and limited equitable set-off to only one of two contracts.
The Court of Appeal upheld the decision on legal set-off but allowed the appeal regarding equitable set-off, finding a close connection between the contracts that made it manifestly unjust to enforce payment of the rebate without taking into account the full cross-claim.
