Claim between co-defendants: when it is not a counterclaim (Cass. civ., 3 Dec. 2008)

Imagine the scene: you are the owner of a property in Évron, in the Mayenne, and you sign a sale agreement with a buyer. Everything seems to be going well, but the suspensive condition of obtaining a loan is not fulfilled by the agreed date. The seller and the buyer accuse each other of not having done what was necessary. The notary, caught in the middle, finds himself sued. And then one of the co-defendants (the notary) asks to be indemnified by the other (the buyer) without the latter having made any claim against him. Is this a counterclaim? The answer is not trivial: it determines the procedural time limits, the costs and, ultimately, who pays what. In this case, the Court of Cassation ruled: it is not a counterclaim. A decision that changes the game for all parties involved in a property sale.

So, what exactly is a counterclaim? It is a claim that the defendant (the one being sued) makes against the claimant (the one who sued). For example, if your neighbour sues you over a party wall, you can claim damages from him for loss suffered: that is a counterclaim. But here, the notary (co-defendant) sued the buyer (another co-defendant) without the latter having made any claim against anyone. For the Court, this is not a counterclaim, but an "incidental claim" between co-defendants. And that changes everything from a procedural point of view.

What this decision tells you is that if you are an owner, buyer or property professional, you must be careful about the nature of the claims you make or that are made against you. A mistake in classification can cost you months of proceedings or expose you to unforeseen costs. In Laval as elsewhere, the rule is clear: do not confuse a claim between co-defendants with a counterclaim. Explanations.

The facts: a story that happens every day

Mr Y., owner of a plot of land in Évron, signs a sale agreement with Mr Z. The price is fixed, a suspensive condition of obtaining a loan is stipulated no later than 15 February 2006, extended to 28 February. But by 28 February, Mr Z. has not obtained his loan. What happens? The agreement provides that if the condition is not fulfilled, the seller may retain a holding deposit of €2,540 (an amount already paid by the buyer). But Mr Z. considers that the notary, Me A., did not carry out the necessary steps to obtain the loan. The seller, for his part, considers that it is the buyer's fault.

Mr Y. (seller) therefore sues Me A. (notary) and Mr Z. (buyer) before the Tribunal de Grande Instance of Laval to have the agreement declared void and to obtain the deposit. In these proceedings, Me A. (co-defendant) makes a claim against Mr Z. (another co-defendant): he asks him to indemnify him against any liability. Problem: Mr Z. has made no claim against Me A. The court must therefore determine whether this claim for indemnity is a counterclaim or not.

The Court of Appeal of Rennes (which covers Laval) said yes, it was a counterclaim. Consequence: the procedure followed specific time limits (time limit for bringing a counterclaim). But the Court of Cassation quashed this judgment on 3 December 2008, holding that a claim by one co-defendant against another who has raised no claim against him is not a counterclaim. It is an incidental claim, subject to different rules.

The reasoning of the court — explained

The Court of Cassation relies on Article 64 of the Code of Civil Procedure (which defines a counterclaim as a claim by which the defendant makes a claim against the claimant). It recalls that, in order to be classified as a counterclaim, the claim must be made by the defendant against the original claimant. Here, Me A. and Mr Z. are both defendants (sued by Mr Y.). Mr Y. is the claimant. Me A.'s claim against Mr Z. is not directed against the claimant, but against a co-defendant. Therefore, it is not a counterclaim.

This reasoning is logical: the classification of "counterclaim" has important procedural consequences, particularly regarding time limits (Article 70 of the Code of Civil Procedure: a counterclaim is only admissible if it is connected to the original claims). If it is wrongly classified as a counterclaim, it can be declared inadmissible for exceeding the time limit. The Court of Cassation puts an end to this confusion: a claim between co-defendants is an "incidental claim", governed by Article 325 of the same Code (which allows a third party to intervene, or a co-defendant to make a claim against another).

The decision is a confirmation of previous case law (notably Civ. 2e, 18 March 2004, no. 02-13.302) but it provides a useful clarification. Lower courts tended to classify claims too broadly as counterclaims, which created legal uncertainty. Now, the rule is simple: if you are sued together with another person, and you want to claim something from that other person, you are not making a counterclaim, but an incidental claim. The time limits are those of ordinary procedure, not the stricter ones for counterclaims.

Concretely, in our case, this means that Me A.'s claim against Mr Z. was admissible, even though it might have been inadmissible if classified as a counterclaim (because made after a certain time limit). The seller Mr Y. could not therefore rely on the claim being time-barred to avoid the notary being ordered to indemnify him.

What this changes for you — practically

For a landlord owner in Laval: if you sue your tenant and a tradesman for defects, and the tradesman asks to be indemnified by the tenant (without the tenant having made any claim), this claim is not a counterclaim. You cannot invoke a time limit to have it dismissed. The tradesman can therefore turn against the tenant even late in the proceedings.

For a buyer like Mr Z.: if you are sued together with the notary, and the notary claims an indemnity from you, you cannot argue that his claim is inadmissible because it is late (from a counterclaim perspective). You must defend on the merits. In our case, this allowed the notary to obtain indemnity from the buyer, who had to reimburse the holding deposit to the seller.

For a property professional (agent, notary): if you are sued together with a client, you can make a claim against him without fear of dismissal for lateness, provided your claim relates to the facts of the case (Article 325 of the CPC). This is a safety net: you can claim indemnity from your client even after the initial exchanges.

Example in figures: in Laval, a sale agreement for a house at €200,000 provides for a holding deposit of 10% (€20,000). If the suspensive condition of the loan is not fulfilled, the seller can claim this sum. If the buyer and the notary are sued, the notary can ask the buyer to indemnify him. Without this decision, the notary's claim could have been declared inadmissible as late, and the notary would have had to pay out of his own pocket. With this decision, the buyer remains liable.

If you are in this situation, you must check the classification of claims in your proceedings. Do not let a judge wrongly classify an incidental claim as a counterclaim: this could cause you to lose rights. A specialist lawyer will help you present your claims correctly.

Four tips to avoid this type of dispute

• Draft your sale agreements carefully: provide precisely for the suspensive conditions, time limits and consequences of their non-fulfilment. In Évron as elsewhere, a vague agreement is a source of litigation. Have it reviewed by a lawyer before signing.
• Keep all evidence of your steps: if you are a buyer, keep proof of loan applications, letters to the bank, reminders. If you are a notary, document each step. In case of dispute, this evidence is crucial to establish who was at fault.
• When sued, do not delay making your claims: even if a claim between co-defendants is not subject to the strict time limit for counterclaims, it is better to act quickly to avoid any challenge. Consult a lawyer as soon as you receive the claim form.
• Classify your claims correctly in court: if you are a co-defendant and wish to claim something from another co-defendant, title your claim as "incidental claim" or "claim for indemnity", not "counterclaim". An error in classification can lead to inadmissibility.

Further reading: related case law and developments

This 2008 decision is part of a consistent line of the Court of Cassation. Already in 2004 (Civ. 2e, 18 March 2004, no. 02-13.302), the Court had held that a claim by one co-defendant against another is not a counterclaim. More recently, in 2016 (Civ. 3e, 15 December 2016, no. 15-26.693), it recalled that a claim for indemnity between co-defendants is an incidental claim, admissible even after the expiry of the time limit for bringing a counterclaim.

The trend is therefore towards stability: lower courts must clearly distinguish between the two types of claims. In the future, we can expect the Court of Cassation to continue to sanction decisions that wrongly classify claims between co-defendants as counterclaims. This means that lawyers must be particularly vigilant in drafting their submissions.

If you are involved in a property dispute, know that this case law applies to all disputes, not just sale agreements. It also concerns leases, co-ownerships, easements, etc. Wherever several people are sued together, the rule is the same.

Frequently asked questions

What is a counterclaim?
A counterclaim is a claim made by the defendant against the original claimant. For example, if you sue your neighbour for nuisance, he can claim damages from you for harassment: that is a counterclaim. It must be brought within a strict time limit (generally, before the judge delivers judgment, but sometimes earlier depending on the procedure).

What is the difference with an incidental claim between co-defendants?
An incidental claim between co-defendants is one that a defendant makes against another defendant (not against the claimant). It is not subject to the same time limits as a counterclaim. Example: in a tenancy dispute, the landlord sues the tenant and the guarantor. If the tenant asks the guarantor to pay the rent arrears, that is an incidental claim.

Can I still make a claim against my co-defendant if the trial is already advanced?
Yes, as long as the proceedings are not closed (i.e., as long as the judge has not set the date for oral submissions). However, it is advisable to do so as early as possible to avoid any challenge. Consult a lawyer to find out the exact time limit in your case.

What are the risks if I misclassify my claim?
If you wrongly classify your claim as a counterclaim, the judge might declare it inadmissible if the time limit has passed. Conversely, if you classify it as incidental when it is a counterclaim, you risk violating procedural rules and having your claim dismissed. It is better to let a lawyer classify the claim.

Does this decision apply to all proceedings?
Yes, it applies to all civil proceedings, whether concerning sales, leases, co-ownership, etc. As soon as several people are sued as defendants, a claim between them is incidental, not a counterclaim.

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