Abstract: A method and apparatus for detecting leakage of flowing liquids from pipes includes an upstream flow-rate sensor positioned between a source of a flowing liquid which is conducted from a source to a destination terminal such as a VAV heat exchanger, and a downstream flow-rate sensor positioned between an outlet port of the destination terminal and a return line for the flowing liquid. The apparatus includes electronic control circuitry which is responsive to a differential flow-rate between upstream and downstream measured flow rates which exceeds a predetermined limit value in removing a valve-opening signal to the upstream shut-off valve, thus closing the valve to interrupt flow of liquid through the valve if the differential flow-rate signifies a leak. Optionally, the apparatus also includes a downstream shut-off valve positioned between the destination terminal and a return line, which is also closed in response to a differential flow-rate exceeding the limit value.