Bo's set-off right can be conceptualized as an "entitlement to pay with Bo's property" as opposed to an "entitlement to seize and liquidate Al's property " (18) In this sense, the right of set-off is distinguishable from a scenario in which Al specifically grants Bo a security interest in Al's property to secure repayment of Al's indebtedness to Bo.
In Canada, set-off is generally subdivided into three categories: legal, equitable and contractual.
Equitable set-off can be conceptualized as a relaxation of the strict rules of legal set-off.
The principles of legal and equitable set-off may be varied under contract.
Account combination can be conceptualized as a reaffirmation of existing legal set-off principles, with a self-help component.
It is probably true to say that in no case can an intervener defeat a debtors current account set-off.
Having synopsized the fundamental principles of set-off, and presented account combination as a contractual set-off prototype, I now turn my attention to the basic concept of a security interest.
With the above points in mind, I now turn to the central threshold question: At what precise point, along the continuum of transactions incorporating or featuring the right of set-off, is a PPSA security interest created?
At a hearing on motions for summary judgment, the trial court granted a set-off to Safecare for the full amount of the previous settlement.
The court held that in this case, there should be no set-off for the settlement of the second dentist because there were different damages caused by each defendant; notwithstanding the fact that some of the injuries were aggravated -- there were additional separate injuries caused by the dentists and, therefore, there would be no setoff.
The nursing home settled and after trial, the court held that a set-off was appropriate for the nursing home's settlement.
Once entitlement to a set-off is determined, calculating the set-off is the next step.
As to economic damages, multiply the ratio of economic damages/total verdict by the settlement amount to determine the set-off.
Determining the set-off for Defendant 2 is as follows:
5% of Defendant 1's settlement (15,000) = $5,325 which is applied as a set-off for economic damages.