Unadjudicated damages claims cannot be set off against other contract sums; recovery clauses apply only to presently due amounts.

A disputed claim for damages does not become a debt until liability is adjudicated and damages are assessed. Clause 18 was construed as a recovery provision limited to sums presently due and payable, so it could not authorise unilateral appropriation of amounts payable under other contracts against an unadjudicated damage claim. The interim injunction merely restrained appropriation and did not compel payment, so it was within the court's power in support of arbitration. The restraint was sustained and the appeals failed.

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Issues: Whether, on a proper construction of clause 18 of the contract, the purchaser could recover its disputed claim for damages by appropriating sums due under other contracts before the claim was adjudicated, and whether an interim injunction restraining such appropriation was justified.

Analysis: Clause 18, read as a whole and in its contextual setting, was held to be a recovery provision dealing with sums presently due and payable. A claim for damages for breach of contract, whether liquidated or unliquidated, does not create a debt until liability is adjudicated and damages are assessed. Since a mere claim for damages is only a right to sue and not a presently due sum, it could not be recovered by unilateral appropriation of amounts due under other contracts. The interim restraint only prevented appropriation and did not direct payment of the other bills, so it remained within the court's power in aid of the arbitration proceedings.

Conclusion: The purchaser had no right under clause 18 to appropriate the respondent's other pending bills towards an unadjudicated claim for damages, and the interim injunction was ?

Final Conclusion: The appeals failed, and the restraint against appropriation of the respondent's amounts pending adjudication of the damage claim was sustained.

Ratio Decidendi: A disputed claim for damages does not amount to a debt presently due and payable, and a contractual recovery clause framed for recovery of sums due cannot be used to appropriate other monies owed before adjudication of liability.

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