Short Reads

Judgement beyond the ambit of the legal dispute

Judgement beyond the ambit of the legal dispute

02.10.2017 NL law

In its judgment of 14 July 2017, ECLI:NL:HR:2017:1357 the Supreme Court decided that the pleadings did not provide sufficient basis for the decision of the Court of Appeal that the contractor's claim was also based on joint and several liability of the alleged client. Moreover, the pleadings provided no evidence that the alleged client acknowledged that the contractor considered the alleged client jointly and severally liable.

On the basis of the judgment of 15 April 2016, ECLI:NL:HR:2016:663 the Supreme Court decided:

"The judge is not free to base his decision on grounds or defences which could be concluded from facts and circumstances turned out in the case, but are not founded on his or her grounds or defences by the relevant party. This would have an adverse effect on the other party's right to defend himself properly (HR 15 April 2016 ECLI:NL:HR:2016:663)."

Background of the case

This case is about whether the Court of Appeal had supplemented the factual basis of the claim in breach of article 24 Code of Civil Procedure (CCP). In other words, whether the Court of Appeal had gone beyond the ambit of the legal dispute.

Article 24 CCP provides that a judge has to examine a case and reach his decision on the basis put forward by the parties in their claim, defence or request. The judge is not free to supplement that basis with facts and circumstances.

In this case, the contractor had performed some administrative work based on an oral contract for services for companies in which the alleged client was involved. The contractor received payments for the administrative work. With the permission of the court in preliminary relief proceedings the contractor levied a prejudgment attachment on bank balances and two islands in Aalsmeer.

In the present proceedings the contractor claimed an order for payment of EUR 9,000 for the administrative work the contractor had performed. The alleged client invoked the defence that it was not him who was the client, but his company. The alleged client lodged a counterclaim and sought the lifting of the prejudgment attachments.

The Court allowed the contractor's claim for payment of EUR 9,000 and rejected the alleged client's counterclaim.

On appeal the alleged client changed his claim and requested a declaratory decision that the contractor had acted wrongfully by selling (executoriaal verkopen) the attached property and that the contractor was liable for the damage suffered or to be suffered.

Court of Appeal

The Court of Appeal confirmed the Court's judgment and rejected the alleged client's changed claim.

According to the Court of Appeal the contractors position/claim implied that a contract had been concluded between the contractor and the alleged client. Under the terms of the contract the alleged client was jointly and severally liable along with the company for the payments for the administrative work. With reference to the pleadings and a letter from the contractor's lawyer the Court of Appeal decided that the alleged client must have been aware that the contractor claimed joint and several liability.

Supreme Court

In the cassation proceedings the alleged client argued that the Court of Appeal had supplemented the factual basis of the claim in breach of article 24 CCP. The Court of Appeal had gone beyond the ambit of the legal dispute. This argument succeeded. According to the Supreme Court the pleadings did not provide sufficient basis for the decision of the Court of Appeal that the contractor's claim was also based on joint and several liability of the alleged client. Moreover the pleadings provided no evidence that the alleged client acknowledged that the contractor considered him jointly and severally liable.

In short

Firstly, this case shows that it is very important to set out all facts and circumstances for the basis of the claim in the pleadings. In this decision, the Supreme Court pointed out again that the judge is not free to base his decision on grounds or defences which could be concluded from facts and circumstances turned out in the case, but are not founded on his or her grounds or defences by the relevant party.

Secondly, this case shows that it is important to verify who the real client is if you accept some work based on a contract for services for a company in which a natural person is involved.

Team

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