Conclusive evidential value of a signed agreement

In a recent case the Arnhem-Leeuwarden Court of Appeal ruled on the basis of the conclusive evidential value accruing to signed documents in writing in proceedings. Procedural law lawyer Lennard Noordzij explains this ruling.

Facts of the case

The parties are a father and his son. The father had sold a hotel to his son and a third party. The father thereby lent an amount of € 75,000 to his son. They recorded this loan in a loan agreement The agreement that one party allows a third party to use an item without financial consideration under the condition that that party will return the item.
» Meer over loan agreement loan agreement in writing. At about the same time the father and son also concluded two other agreements, titled ‘Waiver for no payment (remission)’, in which it was set out that the father cancelled in total € 29,000 of the loan. A couple of years later, the father and son had an argument about several business arrangements, including the loan. The father asked the son – in spite of the remission of € 29,000 – to repay the amount of € 75,000 in full within five days. The son didn’t do this.

Tax structure

The father argued that the loan agreement in writing does not concern the real arrangements. According to him, the loan agreement is solely for tax purposes and a paper structure, which was set up by the civil-law notary to minimise the inheritance tax on the death of the father. According to him, the son had actually agreed (verbally) to a return fee of € 750 per month. The son disputed this and argued that the arrangements made are the same as the contents of the loan agreement in writing of € 75,000. According to him, the father also cancelled an amount of € 29,000 for him.

Conclusive evidential value

The principle of free assessment of evidence applies to judges in proceedings. However, this does not apply to specific types of documents. A deed – in accordance with the law a signed document intended to serve as evidence – results in this matter, regarding the loan between parties, in conclusive evidence. This means that the court must assume the contents of the loan agreement in writing to be true.

Ruling of the Court of Appeal regarding the burden of proof

For this reason the Court of Appeal ruled in this case that the father must prove the arrangements argued by him, because he is now relying on the verbal return agreement, which is different from the arrangements between parties in the loan agreement in writing. This is an unfavourable position of evidence for the father.

According to the Court of Appeal, the deeds of remission, which the son relies on, also result in conclusive evidence between parties. It is therefore obvious that the father must provide proof to the contrary that no remissions have taken place. For this purpose the father showed an email from his son, who wrote: “Furthermore, we talked at the time at the office about ‘the extra gifts’, which were also made. These were ‘solely for tax purposes’”. According to the father, this demonstrated that the real arrangements were different from what was written in the loan agreement in writing and the deeds of remission.

The Court of Appeal disagreed. It held that although this email raises questions, this email does not sufficiently negate the contents of the documentation in writing. For this reason, the Court of Appeal allowed the father to also provide evidence on this point.