By George Coucounis
Transactions are made daily on credit and the creditors who can be a bank, a vendor, a professional service provider, a trader and others, keep a statement of account for the transactions. Such a statement, when acknowledged and accepted by the debtor, constitutes an account stated and the debtor is estopped from denying it. The details and the balance of such an account are considered to be correct and that the debtor has promised to repay the balance due. In the event an action is brought before the Court by the creditor claiming the balance, he is not obliged to plead and prove separately each one of the details of the account. The account stated is considered a new agreement between the parties and there is no need for a new consideration. It is important to note that delivery of the statement of the account and the acknowledgement of the debt by the debtor is significant, since it makes the account stated and protects the creditor from any denial of the balance due.
The acknowledgment of the debt by the debtor created for previous loans granted to him and its acceptance through a new agreement in the form of a letter specifying not only the interest payable, but also the mode of payment of the amount due in instalments, make such an agreement an account stated. This has been decided by the District Court of Larnaca in a recent judgment whereby the plaintiffs were claiming a substantial amount of money due under a loan agreement, as well as default interest and an order for the sale in public auction of the immovable property mortgaged belonging to the defendants. The Court referring to the case-law as adopted by the Supreme Court with regard to the meaning of an account stated, held that it means an agreement between the parties according to which all the details of the account and the balance due are correct, accompanied with a promise by the debtor, expressed or implied, to pay the balance. It also stated that the defendants-debtors were barred or estopped from coming back to question the correctness of the balance, which they had already agreed that it was due and payable. Moreover, it indicated that the defendants must blame themselves, since they didn’t check the account at the right time and its balance due when they made the agreement and accepted the balance due to the plaintiffs.
The Court also referred to a relevant judgment of the Courts of Scotland whereby the representatives of a company were claiming an amount from a bank, with which, according to their allegations, their account was illegally overcharged. The bank raised various defences among which it stated that the correctness of the account was acknowledged by the company in writing at an earlier time in a manner estopping the company to dispute the correctness of the charges in the said account. The Court decided in favour of the bank, since the company had acknowledged the correctness of the account, its representatives having sent a letter to the bank accepting the account and the amount due. Given the acknowledgment of the correctness of the amount due by the company, it was not necessary for the Court to examine whether the alleged charge was correct or not.
Based on the above, the District Court of Larnaca referred also to the principles of equity which do not allow a litigant to insist in the enjoyment even of his legal rights deriving from an agreement or the law, when according to the circumstances of a case and the relation between the parties, this would be unjust and in violation of the principles of equity. This constitutes the doctrine of estoppel which does not allow a litigant to deny the facts he has already accepted. Therefore, the Court decided that the plaintiffs were entitled to a judgment for the amount due, plus legal interest and issued an order for the sale of the mortgaged property in public auction.
George Coucounis is a lawyer and leading partner of George Coucounis LLC, a legal firm based in Larnaca -Cyprus
E-mail: email@example.com | www.coucounislaw.com | tel.:- 24818288.