Account

Articles

The Modern Remedy of Account – 1987 Adelaide Law Review Vol 11 p. 1

Account Stated

In a claim for money due on an account stated, a bare admission of a sum certain may be sufficient to found a cause of action; the ultimate question is however whether the debt is truly owing. An account stated “involves no more than an admission of liability for a specified sum. An IOU is a simple instance of this type of account stated.”: Lewis v Wilson (1997) 42 NSWLR 228 at 232. See also the following article on this issue: Lewis v Wilson: Account Stated Rears its Ugly Head (1997) 12 JCL 160

Choice between Account of Profits and Equitable Compensation

An account for profits and an award of damages are alternative and not cumulative remedies. Normally, where both remedies are available, a plaintiff must elect between them. Ordinarily, the election need not be made before the trial starts and may be delayed until determination of the cause of action. There is therefore no difficulty where the plaintiff claims both equitable compensation and an account of profits in the prayer for relief, however, election must be made when (but not before) judgment is given. Where the plaintiff does not know which remedy is more favourable at the time of judgment on liability, the court may order discovery or other orders designed to give the plaintiff the information it requires to make the election: GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 at [56]

General

Whether there is a mutual obligation to account – “A court will only order the taking of an account if it is satisfied that the parties are in an accounting relationship with each other: that is, if the court is satisfied that one party would be liable to pay the other anything which is found on the taking of the account to be owed: Re Cyril Sharp and Ors [1992] FCA 616 and Lang v Simon (1952) 53 SR (NSW) 508, at 514. With respect to joint ventures, parties are entitled to an accounting between them unless the joint-venture deed negatives this right: Marcolongo v Mattuissi [2000] NSWSC 834 at [71].” From Russo & Ors v Russo & Ors [2015] NSWSC 17 at [175]

Liability to Account as a Fiduciary

Following from Humphris v Jenschol (1998) 160 ALR 107 “Stated comprehensively in terms of the liability to account, the principle of equity is that a person who is under a fiduciary obligation must account to the person to whom the obligation is owed for any benefit or gain (i) which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed between his fiduciary duty and his personal interest in the pursuit or possible receipt of such a benefit or gain or (ii) which was obtained or received by use or by reason of his fiduciary position or of opportunity or knowledge resulting from it. Any such benefit or gain is held by the fiduciary as constructive trustee.” See also Commonwealth Bank of Australia v Smith (1991) 102 ALR 453 at 477

Running Accounts

Whether uninterrupted supply punctuated by payments provides a strong foundation for inference that the appellant had accepted the need to continue supplying in order to keep the company trading and paying – Whether liquidator can choose the relevant point of time which gives the payee a preference – Whether the entire transaction should be considered – Whether there was a promise to continue to trade or freedom to refuse further supply – Whether it is reasonable to apply the running account principle when payments have increased net indebtedness to the creditor, and effected a corresponding increase of the bankrupt’s estate: CSR Ltd v Starkey13 ACSR 321