Wednesday, 5 October 2011

When an Admission in a Pleading is not Binding

On the one hand, pleadings frame and guide an action. On the other hand, as demonstrated by the decision in Rana v. Nagra, 2011 BCCA 392, one should not rely too much on the admissions contained therein.

In this case, the plaintiff pled that parties entered into a share purchase agreement and the defendant admitted that fact, and did not plead that the agreement was uncertain. Nevertheless, the trial judge held that the agreement was not binding on the defendant. The Court of Appeal agreed with the trial judge and held that this was not an admission that could not be withdrawn by consent or with leave of the court. Rather, this was merely an admission of fact of entering into the contract, not of the legal effect of this fact:

[16] … However, the issue of whether the agreement was binding was a question of law. The admission by the Nagras of the fact that they had entered into the agreement did not constitute an admission by them of the legal effect of entering into the agreement and, in particular, it did not constitute an admission of the question of law that the agreement was binding. In my opinion, therefore, the admission made by the Nagras did not preclude them from taking the position that the agreement was not binding at law.