18Availability of defences

1. This section applies only if, in a proceeding brought in a court, a claim is made in reliance on this subpart by a beneficiary against a promisor.

2. The promisor has available, by way of defence, counterclaim, set-off, or otherwise, any matter that would have been available to the promisor—

3. if the beneficiary had been a party to the deed or contract in which the promise is contained; or
4. if—
   1. the beneficiary were the promisee; and
   2. the promise to which the proceeding relates had been made for the benefit of the promisee; and
   3. the proceeding had been brought by the promisee.

5. However, a set-off or counterclaim against the promisee is available under subsection (2) against the beneficiary only if the subject matter of the set-off or counterclaim arises out of, or in connection with, the deed or contract in which the promise is contained.

6. In a counterclaim brought under subsection (2) or (3) against a beneficiary,—

7. the beneficiary is not liable on the counterclaim, unless the beneficiary elects, with full knowledge of the counterclaim, to proceed with the beneficiary’s claim against the promisor; and
8. if the beneficiary so elects to proceed, the beneficiary’s liability on the counterclaim may not exceed the value of the benefit conferred on the beneficiary by the promise.

9. Subsections (2) and (3) are subject to subsection (4).

Compare

• s 9