The difference between a debt and a claim for damages: part 1

It is sometimes said that once the time for taxation has expired, a bill for legal fees may be ‘sued on as a debt’.  Quite frankly, I have never quite understood what the difference between a debt claim and a damages claim is, or why it matters in general, though there are certain consequences I’m aware of in terms of the  civil procedures applicable.  By way of first instalment: I just saw this little passage in Copuss Pty Limited v Nix [2012] NSWSC 671, and thought to squirrel it away on the blog:

’56              There is no reason why Copuss should not be entitled to recover the loans it made to Mr and Mrs Nix. The recovery of those loans do not depend on the contract and whether Mr and Mrs Nix were in breach of it. As the High Court explained in Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567:

The common law does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action of debt or by indebitatus assumpsit.

 And later it said (at 569):

 A debt recoverable under an indebitatus count was not and is not now conceived of simply as a cause of action for breach of duty or obligation. In other words it is a mistake to regard the liability to pay a debt of a kind formerly recoverable in debt or indebitatus assumpsit as no more than the result of a breach of contract, a breach which the creditor must affirmatively allege and prove.’

How not to plead a contract

Update, 17 January 2013: this colourful judgment of a Master of the Supreme Court of Western Australia is worth a read. For example:

’23 At par 17, the plaintiff pleads that the agreement was entered into between February and November 2007. That is a remarkably long period. It should always be possible to say when a contract came into existence.

24 In a classical analysis, it is when the offer is accepted. Any uncertainty over the date on which the contract became complete and enforceable only arises because of evidentiary uncertainty about when a particular event occurred: there may be doubt, for example, about whether a written acceptance was delivered, or a conversation took place, on Tuesday or Wednesday. But there will still be a short interval of time during which those things are said to have taken place.

25 Even in the sort of case in which a contract emerges from a course of conduct, such as was considered by the Full Court in Marist Brothers Community Inc v The Shire of Harvey (1994) 14 WAR 69, it is always possible to give a definite date by which it can be said that there is an enforceable contract.

26 In neither type of case is it likely that the point at which a contract came into existence cannot be narrowed down any further than to a nine-month period. Nine months is the gestation period for humans, not for contracts. A plea that a contract came into existence in a nine-month period is embarrassing.’

Update, 4 June 2012:  This post prompted quite a few readers privately to email me sharing various frustrations they have.  One pointed me to an article by a Qld silk, Anthony Morris, venting his top 7 pleading frustrations, ‘Seven Deadly Sins of Pleading’, Hearsay, Issue 32, December 2008.  I completely agree with the first 6 and all of the 7th except for the bit which recommends against using automatic cross-references to other paragraphs of the pleading — technology must have moved on since 2008.  I am in heated agreement with him in relation to his second point, and wonder whether any Victorians consider that pleading in numbered paragraphs what might ordinarily be contained within particulars, so as to force (or even entice) the responding party to state their position in relation to that allegation, might not be permitted for some reason.

Original post: One might think that nothing could be more central to commercial litigation practice than to plead an agreement.  Sometimes the line between facts and evidence — one you plead and the other you don’t — can be a bit blurry, but one might think that it would give a lawyer pause before pleading an invoice given pursuant to an agreement as a particular of the agreement itself.  Yet it happens all the time, perhaps none moreso than in the solicitor who sues for fees, representing himself.

Then there seems to be a pathological inability in pleaders to allege a straight written agreement.  It’s always partly implied to give business efficacy to the agreement, but the implied term is never stated and nor are the reasons why the agreement would be inefficacious in a business sense without the implied term.  And often enough, it’s partly oral too, but the thrust of the words spoken so giving rise to the oral terms are not set out.

Speak up if you can better this pleading (bear in mind in order to be valid all the terms of a costs agreement have to be in writing or evidenced in writing) which is paining my Saturday evening, or just send me your favourite examples of the same phenomenon: Continue reading “How not to plead a contract”