Special Defences In Queensland: Confession, Tender And Set-Off

A defendant may answer a money claim by showing that a defence arose after suit began, that payment was properly tendered before suit, or that a connected cross-claim should reduce what is payable. These are different routes with different consequences. A confession of a later defence can preserve the plaintiff’s claim to pre-defence costs; an effective pre-action tender challenges the need to sue; a set-off meets the claim to the extent of the cross-demand. The facts and timing decide which route is available.

What are Special Defences in Queensland?

In this guide, “Special Defences in Queensland” describes three specific pleading mechanisms under the Uniform Civil Procedure Rules 1999 (Qld) (UCPR): confession of a defence that arose after commencement under r 170(1), defence of tender before commencement under r 172, and set-off under r 173(1). The expression is a convenient description, not a separate statutory category. The apparent similarity—that money may no longer be recoverable as pleaded—should not obscure the different questions each rule asks.

Special Defences in Queensland are most useful when a party can identify the exact event or cross-demand that changes the amount recoverable. Their costs consequences cannot be inferred from a ledger balance alone.

Special Defences in Queensland: confession of a later defence

Rule r 170(1) gives the plaintiff an election where the defendant alleges a defence that arose after the proceeding started: the plaintiff may file and serve a confession of defence. Under r 170(2), the plaintiff may then obtain judgment for costs to be assessed up to the day the defence was served, unless the court orders otherwise. “Defendant” includes a defendant to a counterclaim under r 170(3). The costs date is service of the defence, not the day the new facts occurred.

Suppose a supplier sues for an overdue $40,000 invoice. After filing, the customer pays the principal and then serves a defence relying on that payment. If the debt was properly due when suit began, confession of the later defence provides a route to end the claim while seeking costs incurred up to service of that defence. The plaintiff should check whether interest or a separate costs issue survives, and should not confess more than the new defence actually answers. If the asserted payment preceded commencement, the premise of r 170(1) is missing.

Why the chronology controls costs

For Special Defences in Queensland, confession is the clearest example of why the date of an event can change the costs result.

The pleading should identify when the defence arose and when it was served. A bare statement that the defendant “no longer owes anything” does not reveal whether proceedings were necessary when filed. The plaintiff’s costs position turns on that distinction. A confession also entails accepting the operative defence; it is a poor substitute for examining whether a disputed payment cleared, was allocated to the relevant debt, or satisfied the whole claim.

Special Defences in Queensland: tender before proceedings

Among Special Defences in Queensland, tender depends particularly on what was offered before the claim was filed.

Under r 172, if a defendant pleads the defence of tender before proceedings were started, the court may order the amount tendered paid into court. Payment into court is discretionary under the rule; it is not expressed as an automatic precondition to pleading. The pleaded tender must be a real offer to perform the monetary obligation, with its amount, date, terms and continuing availability examined against the actual claim. A mere proposal to negotiate a discount is not the same thing.

A contractor demands $12,000 for completed work. Before suit, the client unconditionally offers the full amount properly due and remains ready to pay it, but the contractor sues for that same sum. A properly established tender may affect the contractor’s entitlement to the costs of bringing the proceeding; it does not make the underlying $12,000 disappear. If the client instead offered $8,000 only on condition that the contractor release an otherwise valid $12,000 debt, the tender defence requires a different analysis. The court’s power to require payment into court sits alongside the general payment-in provisions in rr 560–561.

The defence should state the obligation to which the tender related and the facts making it effective. Tender is a narrow answer to a claim for money due. It should not be pleaded as though a defendant can simultaneously insist that nothing was payable and rely on tender of the very debt without addressing that inconsistency. A post-commencement offer or formal compromise proposal raises different issues from the pre-action tender described in r 172. That timing separates tender from the other Special Defences in Queensland discussed here.

Special Defences in Queensland: set-off

Rule r 173(1) permits a defendant to rely on set-off, whether or not its amount is ascertained, as a defence to all or part of the plaintiff’s claim, whether or not it is also included as a counterclaim. That procedural permission does not establish that every grievance against the plaintiff qualifies. The defendant must identify a legally sustainable basis for setting the cross-demand against the particular demand sued upon.

A set-off reduces or extinguishes recovery on the claim. A counterclaim seeks affirmative relief. If the set-off exceeds the plaintiff’s claim, r 173(2) permits the court to treat it as a counterclaim and give judgment for the difference or other relief within jurisdiction. That possibility should not invite casual drafting: where positive relief is wanted, plead it distinctly. Stonegate Legal’s guide to counterclaims in Queensland civil proceedings explains how that claim is brought and answered under r 177, r 179 and r 184.

A connected claim can impeach the demand

The set-off branch of Special Defences in Queensland often turns on whether the cross-demand undermines the very debt being enforced.

The most difficult set-off dispute usually concerns equitable set-off. In Forsyth v Gibbs [2008] QCA 103 at [8]–[17], the Queensland Court of Appeal rejected a borrower’s attempt to set broker-related losses against a separate loan debt. The alleged misconduct might have made repayment harder, but did not undermine the lenders’ entitlement to repayment. Keane JA explained at [10] that general unfairness is insufficient: the cross-claim must be connected in a way that impeaches the claim itself. The appeal produced judgment for the lenders at [18]–[20].

Contrast IRM Pacific Pty Ltd v Nudgegrove Pty Ltd [2008] QSC 195 at [2]–[4], [11] and [27]–[28]. The plaintiff sought judgment for admitted truck-hire charges. The defendants alleged that representations about the trucks’ suitability and performance had induced the very hire arrangements and claimed substantial losses. McMeekin J dismissed the application for judgment on admissions, leaving the claimed defence to be tested at trial. The decision did not finally establish the set-off; it shows why an arguable cross-claim tied to the same contracts can prevent an early judgment for the apparent balance.

The practical test is more exacting than asking whether the disputes involve the same businesses. If a supplier sues for the price of a defective machine and the purchaser claims losses from its failure to meet the promised specification, the relationship may support an equitable set-off. If the purchaser instead complains about an unrelated lease negotiated a year later, common parties alone will not supply the necessary connection. The facts, contracts and relief still require analysis.

Legal set-off and the Queensland qualification

A historical qualification makes this part of Special Defences in Queensland particularly easy to overstate.

Claims involving mutual debts also require care. The historical statutory set-off provisions ceased to apply in Queensland, and the status of a free-standing legal set-off is not resolved simply by citing r 173(1). In Forsyth v Gibbs [2008] QCA 103, footnote [1], the Court of Appeal noted the repeal and deliberately did not decide a common-law set-off argument because the cross-claims were unliquidated. Plead the actual legal or equitable foundation rather than assuming the rule creates a substantive right to net any two sums.

The court can separate or reject a set-off

Special Defences in Queensland do not compel the court to try every proposed set-off within the principal claim.

Under r 173(3)(a), the court may set aside a defence or counterclaim by way of set-off and direct that it be dealt with separately if it cannot conveniently be dealt with in the proceeding. Under r 173(3)(b), it may set aside one if it considers that the set-off should not be allowed. A sprawling cross-claim may therefore complicate the defence without postponing a straightforward recovery claim. A weak or disconnected plea also risks an application concerning striking out pleadings and particulars.

How to plead Special Defences in Queensland without losing the point

A careful pleading of Special Defences in Queensland starts with the material facts, not the name of the defence.

The ordinary pleading discipline still applies. Under r 149(1)(b), plead material facts rather than evidence; if relying on an Act, identify its provision under r 149(1)(e). r 150(1) requires matters likely to take the opposite party by surprise to be specifically pleaded, and r 157 requires necessary particulars. The guide to pleadings and particulars in Queensland and the guide to matters that must be specifically pleaded develop those requirements.

For confession, record commencement, the later event, service of the defence and the costs sought. For tender, identify the obligation, sum, date, terms and readiness to pay. For set-off, identify the cross-demand, parties, transaction, legal basis, connection to the plaintiff’s claim and any positive relief sought. The guide to drafting a defence and reply addresses the surrounding response and admission rules. Where the plaintiff seeks early judgment, the evidentiary position and the pleaded connection both matter; see the discussion of summary judgment in debt recovery.

The decisive question is what happened to the plaintiff’s entitlement, and when. A later event may justify ending an otherwise proper suit with costs preserved. A proper earlier tender may make the suit unnecessary. A qualifying set-off may mean the plaintiff never had an enforceable claim for the gross sum asserted. Those consequences should be considered before the defence is filed, because the label attached to a pleading cannot supply missing facts.

Special Defences in Queensland therefore require separate attention to timing, payment and the legal relationship between opposing demands. The applicable rule supplies the procedural route; the pleaded facts must justify using it.