matter or not, who shall have been duly served with notice in writing of such claim pursuant to any Rule of Court or any order of the Court, as might properly have been granted against such person if he had been made a defendant to a cause duly instituted by the same defendant for the like purpose; and every person served with any such notice shall thenceforth be deemed a party to such cause or matter, with the same rights in respect of his defence against such claim as if he had been duly sued in the ordinary way by such defendant."

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By s. 24 (7), The High Court of Justice and the Court of Appeal respectively, in the exercise of the jurisdiction vested in them by this Act in every cause or matter pending before them respectively, shall have power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as to them shall seem just, all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any and every legal or equitable claim properly brought forward by them respectively in such cause or matter; so that, as far as possible, all matters so in controversy between the said parties respectively may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided."

Under the above-mentioned provisions a defendant who has a claim against the plaintiff which he could have enforced by a cross-action, is in general enabled (subject to the powers of disallowance or exclusion under O. XIX. r. 3, and O. XXI. r. 15, cited pp. 571, 573), to enforce such cross-claim in the same action by way of counterclaim. The right to counterclaim exists whether the claims on either side are liquidated or unliquidated, pecuniary or non-pecuniary, legal or equitable (see Jud. Act, 1873, s. 24 (2), (3), (6), (7), and O. XIX. r. 3, supra; Gray v. Webb, 21 Ch. D. 802, 804; 51 L. J. Ch. 815; and see Storey v. Waddle, 4 Q. B. D. 289; Besant v. Wood, 12 Ch. D. 605, 630; Beddall v. Maitland, 17 Ch. D. at pp. 181 et seq.; 50 L. J. Ch. 401; London Land Co. v. Harris, 13 Q. B. D. 540); and, except in cases where a third person or a codefendant is added as defendant with the plaintiff to the counterclaim (as to which, see post, pp. 575, 588), it is not necessary that the counterclaim should be in any way connected with the subject-matter of the claim, or even ejusdem generis with it (see Beddall v. Maitland, supra; Gray v. Webb, supra). A counterclaim is to be regarded for many purposes as a proceeding in a cross-action. (Amon v. Bobbett, 22 Q. B. D. 543, 548; 58 L. J. Q. B. 219; Stumore v. Campbell, (1892) 1 Q. B. 314, 316; 61 L. J. Q. B. 463.)

Subject to the above-mentioned powers of disallowance or exclusion, the defendant is entitled to join in his counterclaim different grounds of claim against the plaintiff in cases where they are such as could have been properly joined in a cross-action brought by the defendant.

For the purpose of determining what claims may or may not be joined in a counterclaim, regard must be had to the provisions of 0. XVIII. with respect to the joinder of different causes of action in a statement of claim. (See O. XIX. r. 3; Compton v. Preston, 21 Ch. D. 138; 51 L. J. Ch. 680; Macdonald v. Carington, 4 C. P. D. 28.) Thus it seems that the provisions of O. XVIII. r. 2, which restrict the joinder of other claims in an action for the recovery of land, are applicable to counterclaims, or at any rate, that a counterclaim which joins claims the joinder whereof in a statement of claim would contravene those provisions will be disallowed or excluded. (Compton v. Preston, supra; sec" Joinder of Causes of Action," ante, p. 58.) But the provisions of Ó. XVIII. r. 5, which allow a plaintiff

in certain cases to join claims against a defendant personally with claims against him as executor, have been held not to apply to counterclaims. (Macdonald v. Carington, 4 C. P. D. 28; 48 L. J. C. P. 179.)

If a counterclaim joins claims which ought not to be joined, it may be wholly or partially disallowed or excluded under O. XIX. r. 3, supra, and 0. XXI. r. 15, below cited, or may be struck out or amended as embarrassing. (Compton v. Preston, supra; Macdonald v. Carington, supra; and see O. XIX. r. 27, and O. XVIII. rr. 8, 9, cited ante, pp. 11, 59.)

Counterclaims are not governed by the same strict rules with respect to parties as those which apply to the defence of set-off. (See "Parties to Counterclaims," post, p. 575.) But it would appear that they must be for claims arising in the same character as that in which the parties sue or are sued respectively. (lb.)

Where on application made by the plaintiff before trial the Court or a judge is of opinion that a counterclaim pleaded by the defendant cannot be conveniently disposed of in the pending action, or ought not to be allowed, an order may be made refusing permission to the defendant to avail himself thereof. (O. XIX. r. 3, cited ante, p. 571.) And similarly it is provided by O. XXI. r. 15, that "Where a defendant sets up a counterclaim, if the plaintiff, or any other person named in manner aforesaid as party to such counterclaim" (i. e., any person added as defendant along with the plaintiff to the counterclaim, see O. XXI. r. 11, cited post, p. 589), "Contends that the claim thereby raised ought not to be disposed of by way of counterclaim, but in an independent action, he may at any time before reply apply to the Court or a judge for an order that such counterclaim may be excluded, and the Court or a judge may, on the hearing of such application, make such order as shall be just."

It is observable that an application for the exclusion of a counterclaim under O. XXI. r. 15 must be made before reply, whereas an application under O. XIX. r. 3, may be made at any time before the trial. (See Compton v. Preston, 21 Ch. D. 138; 51 L. J. Ch. 680; Huggons v. Tweed, 10 Ch. D. 359.) A counterclaim will be excluded under these rules where it would improperly prejudice or embarrass the plaintiff or unduly delay him in the prosecution of his action. (See Padwick v. Scott, 2 Ch. D. 736; 45 L. J. Ch. 350; Huggons v. Tweed, supra; Gray v. Webb, 21 Ch. D. 802; 51 L. J. Ch. 815.)

If a counterclaim is frivolous or vexatious, or discloses no reasonable grounds of counterclaim, it may be ordered to be struck out under O. XXV. r. 4, cited post, p. 601. So if it contains matter which is unnecessary or scandalous, or which may tend to prejudice, embarrass, or delay the fair trial of the action, the Court or a judge have power to order such matter to be struck out or amended under O. XIX. r. 27, cited ante, p. 11.

If the claims on both sides are for liquidated amounts, such as would be the subject of set-off, the defendant may at his option plead his cross demand either as a defence or as a counterclaim, or he may plead it both as a defence and also as a counterclaim in the alternative. If the amount of such cross demand exceeds the amount of the plaintiff's liquidated claim, the defendant may plead in his defence a set-off of part of the debt due from the plaintiff, and may counterclaim for the residue of it, so as to recover judgment against the plaintiff for the excess. (See Set-off," post, p. 824.)

Where, on the other hand, the claim on either side is a claim for unliquidated damages or for non-pecuniary relief, and the case is not

one in which the cross-claim of the defendant could have been pleaded as a defence under the law existing previously to the Judicature Acts (vide supra), the cross-claim is not in general available by way of defence properly so called, and the defendant, if he seeks to avail himself of it in the same action, can only do so by pleading it as a counterclaim.

A pecuniary counterclaim may be for either a greater or a smaller amount than the amount of the plaintiff's claim to which it is pleaded. (See Mostyn v. West Mostyn, &c. Co., 1 C. P. D. 145; 45 L. J. C. P. 401; Gray v. Webb, 21 Ch. D. 802; 51 L. J. Ch. 815.)

Under ordinary circumstances it is advisable for a defendant who has a cross-claim which can be properly and conveniently disposed of in the same action to plead it by way of defence or counterclaim in the action, but he is not obliged to do so, as he may reserve it, if he chooses, for a cross-action against the plaintiff (see "Set-off," post, p. 825; Thomson v. S. E. Ry. Co., 9 Q. B. D. 320; 51 L. J. Q. B. 322; Caird v. Moss, 33 Ch. D. 22); and in some cases it may be expedient to adopt that course. But, if such cross-claim has arisen out of the same transactions as the plaintiff's claim, and the defendant commences a cross-action against the plaintiff in respect of it during the pendency of the original action, the Court or a judge may order that the proceeding in one of the crossactions shall be stayed, on the terms that the claim of the plaintiff in that action may be set up by way of set-off or counterclaim in the other action. (Thomson v. S. E. Ry. Co., supra; Caird v. Moss, supra; Ladd v. Puleston, 52 L. J. Ch. 976; Adamson v. Moore, 44 L. T. 420; see Hyman v. Helm, 24 Ch. D. 531.)

A defendant who has pleaded a counterclaim may withdraw the whole or any part of his counterclaim by obtaining leave for that purpose under the provisions of O. XXVI. r. 1, cited “Discontinuance," post, p. 690.

By O. XXI. r. 16, "If, in any caso in which the defendant sets up a counterclaim, the action of the plaintiff is stayed, discontinued, or dismissed, the counterclaim may, nevertheless, be proceeded with." (See McGowan v. Middleton, 11 Q. B. D. 464; 52 L. J. Q. B. 355.)

A counterclaim is treated for the purpose of taxation as a cross-action (Amon v. Bobbett, 22 Q. B. D. 543, supra, p. 572; Finska v. Brown, W. N. (1891) 116); whilst a set-off proper is a defence, and consequently the distinction between set-off properly so called and counterclaim is sometimes material as regards costs. Where the defendant establishes a defence of set-off to an amount equal to or greater than the proved amount of the plaintiff's claim, he thereby defeats the action, and is, therefore, entitled (subject to the discretion of the Court or judge under O. LXV. r. 1, and the Jud. Act, 1890, s. 5) to the general costs of the action as well as to the costs of his defence of set-off. (See Baines v. Bromley, 6 Q. B. D. at pp. 691, 694; 50 L. J. Q. B. 465; Lowe v. Holme, 10 Q. B. D. 286; 52 L. J. Q. B. 270; Lund v. Campbell, 14 Q. B. D. 821; 54 L. J. Q. B. 281.) But where the defendant merely succeeds in establishing a cross-claim which is not pleadable as a defence of set-off and can only be relied upon by way of counterclaim (as, for instance, where the claim on either side is for unliquidated damages), the rule as to costs is different. In such cases the plaintiff's claim, even if it is overtopped by the proved amount of the counterclaim, has not been defeated, and accordingly the rule is that (subject to the discretion of the Court or a judge under O. LXV. r. 1, and the Jud. Act, 1890, s. 5, and, in cases where they apply, to the provisions of the County Courts Act, 1888

(51 & 52 Vict. c. 43), s. 116, and O. LXV. r. 12), the plaintiff, having succeeded in establishing his claim, is entitled to the general costs of the action, while the defendant is merely entitled to the costs of and incidental to his counterclaim. (Bluke v. Appleyard, 3 Ex. D. 195; Cole v. Firth, 4 Ex. D. 301; Neale v. Clarke, 4 Ex. D. 286; Ward v. Morse, 23 Ch. D. 377; Lund v. Campbell, supra; Hawke v. Brear, 14 Q. B. D. 841; 54 L. J. Q. B. 315; Ahrbecker v. Frost, 17 Q. B. D. 606; Shrapnel v. Laing, 20 Q. B. D. 334.) O. LXV. r. 12 is to be read together with s. 116 of the County Courts Act, 1888. (See Millington v. Harwood, (1892) 2 Q. B. 166; 61 L. J. Q. B. 582.)

If a defendant establishes a defence of set-off, the plaintiff's claim is pro tanto defeated, and the plaintiff only “recovers" the amount by which his proved claim exceeds the amount of the set-off. (Ashcroft v. Foulkes, 18 C. B. 261; Beard v. Perry, 2 B. & S. 493; Neale v. Clarke, supra; Stooke v. Taylor, 5 Q. B. D. 569; 49 L. J. Q. B. 857; Baines v. Bromley, supra.) Whilst if a defendant merely establishes a cross-claim which is not pleadable as a defence by way of set-off, and can only be relied upon by way of counterclaim, the plaintiff is deemed to "recover "the whole amount of his proved claim. (Stooke v. Taylor, supra; Baines v. Bromley, supra.) The provisions of the County Courts Act, 1888, and of O. LXV. r. 12, do not affect the right of a defendant who succeeds upon a counterclaim to obtain his costs in respect of such counterclaim. (Blake v. Appleyard, supra; Chatfield v. Sedgwick, 4 C. P. D. 459.)

From the above observations, it appears to be advisable, so far as regards costs, that a defendant who has a cross demand which is pleadable as a set-off, should plead it, or a sufficient part of it, by way of defence as such set-off (adding, where necessary, a counterclaim for any excess thereof over the amount which may be due to the plaintiff on his claim), rather than that he should set it up simply as a counterclaim. In some respects, and under some circumstances, however, it may be more advantageous to the defendant to plead such cross demand as a counterclaim than to set it up as a defence of set-off, for the plaintiff is obliged to reply specifically to a counterclaim (see "Replies to Counterclaims," post, p. 582), whereas it seems that he may reply to a defence of set-off by a mere joinder of issue (see" Set-off," post, p. 826); and, moreover, the provisions of O. XXVIII. r. 3, which enable the defendant to amend a counterclaim without leave, do not appear to apply to a mere defence of set-off (vide post, p. 579). So, too, a counterclaim may be proceeded with, even if the action is dismissed or discontinued (see O. XXI. r. 16, above cited), whereas a mere defence of set-off would in such case drop with the action (see McGowan v. Middleton, cited ante, p. 574).

Parties to counterclaims.]-Counterclaims are in the nature of crossactions (see Jud. Act, 1873, s. 24 (3); O. XIX. r. 3; McGowan v. Middleton, 11 Q. B. D. 464; 52 L. J. Q. B. 355; Amon v. Bobbett, 22 Q. B. D. 543, 548; 58 L. J. Q. B. 219; Stumore v. Campbell, (1892) 1 Q. B. 314, 316; 61 L. J. Q. B. 463), and are accordingly not subject to the same restrictions with regard to parties as the defence of set-off (see "Set-off," post, p. 822). Thus, if one of two or more joint defendants has a separate cross-claim against the plaintiff, he may (subject to the provisions of O. XIX. r. 3, and O. XXI. r. 15, cited ante, pp. 571, 573) counterclaim alone against the plaintiff in respect of it. So, under the provisions of the Jud. Act, 1873, s. 24 (3), above cited, a defendant who has a cross-claim against the plaintiff along with some other person is at liberty (subject to the power of disallowance and exclusion under the rules above referred to) to

add such other person as a defendant along with the plaintiff to a counterclaim in respect of it, provided that the relief claimed by the counterclaim relates to or is connected with the original subject of the action, and is relief in which the plaintiff is interested, and which might properly have been granted in an action brought by the defendant against the plaintiff and such third person, and this right applies, whether such third person is already a party to the action or not, and consequently a co-defendant may be joined as defendant along with the plaintiff to such counterclaim. (See also O. XVI. r. 11, cited ante, p. 26, and O. XXI. rr. 11–13, cited pp. 589, 590, infra, and see the Forms, post, pp. 587, 588.)

It is not, however, a sufficient reason in all cases for joining a person as defendant, that, if joined, he would have a counterclaim either jointly with the original defendant against the plaintiff, or arising out of the transactions the subject of the action (Montgomery v. Foy, (1895) 2 Q. B. 321; 65 L. J. Q. B. 18; and see Norris v. Beazley, 2 C. P. D. 80; 46 L. J. C. P. 169); but where the main inquiry and the main evidence is the same in the two cases, there would seem in general to be a sufficient connection or relation between them to satisfy the provisions of the above section (see Byrne v. Brown, 22 Q. B. D. 657, 666; 58 L. J. Q. B. 410 ; Montgomery v. Foy, supra).

By O. XVI. r. 11 (cited "Parties to Actions," ante, p. 26), a general power is given to bring in parties necessary to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter. A question which it was necessary in effect to determine as a subsidiary question in the original action, in order to arrive at a decision as to the principal matter in issue in such action, would appear to be a question involved in the original action. (See Montgomery v. Foy, supra.)

Where a shipowner sued the consignees of a cargo for a declaration of title to and for payment of money deposited by them for freight under s. 493 of the Merchant Shipping Act, 1894 (57 & 58 Vict. c. 60), with a warehouseman who had received the cargo with notice of the lien for freight, it was held that the shippers, for whom the consignees were merely agents for sale of the cargo, might be brought in under O. XVI. r. 11, in order that they might counterclaim against the plaintiff for damages for short delivery and injury to the cargo. (Ib.)

By O. XVI. r. 3, "Where in an action any person has been improperly or unnecessarily joined as a co-plaintiff, and a defendant has set up a counterclaim or set-off, he may obtain the benefit thereof by establishing his set-off or counterclaim as against the parties other than the co-plaintiff so joined, notwithstanding the misjoinder of such plaintiff or any proceeding consequent thereon."

Even where several plaintiffs have been properly joined in an action on a joint claim, the defendant, if he has a cross-claim against one of them only, or distinct cross-claims against each of them separately, may in some cases (subject to the rules above mentioned) counterclaim against one of them, or each of them accordingly. (Manchester, &c. Ry. Co. v. Brooks, 2 Ex. D. 243; 46 L. J. Ex. 244; see Set-off," post, p. 823.)

see

It would seem that counterclaims, like defences of set-off (as to which, 'Set-off," post, p. 822), can only be pleaded where they arise between the parties in the same character as that in which they sue or are sued, so that, for instance, in an action brought by the plaintiff in his personal character only, a counterclaim against him as executor would not, in general, be allowed. (Macdonald v. Carington, 4 C. P. D. 28, 38; 48 L. J.