Can I reduce the amount I owe by claiming the other party owes me money in an Ontario lawsuit?

Yes. In Ontario litigation, a defendant who is owed money by the plaintiff on a related matter can raise a defence of set-off, arguing that the amounts should be offset against each other. Set-off is a way of saying: even if I owe you what you claim, you also owe me money, so the net amount I owe is less.

There are different types of set-off recognized in Ontario. Legal set-off applies where both debts are for definite amounts that are due and payable. Equitable set-off is broader and applies where the cross-claim is so closely connected to the plaintiff's claim that it would be unjust to enforce the plaintiff's claim without taking the defendant's claim into account.

Set-off is raised as a defence in the statement of defence. If the defendant's claim exceeds the plaintiff's, the excess must be pursued as a counterclaim to recover money beyond the amount of the plaintiff's claim. A litigation lawyer can advise you on how to properly plead set-off.