Cancellation of auction by Objection - Decision 9619/2023 ΤΥ

The Single-member Court of First Instance of Thessaloniki with the no. 9619/2023 Decision of, in a case successfully handled by our office, accepted the Objection our principal against foreclosure.

The Court upheld the objection on the ground it concerned failure to present (on behalf of the claims management company representing the foreign fund) the necessary documents, according to the provisions of the article 925 of the Civil Code. In particular, in the opposition, we raised the failure of each management company to communicate the entire documents of the transfer and management of receivables contracts. This resulted in her not proving her legitimacy to continue the enforcement process.

The opposition, as a legal remedy, is exercised at different stages of the forced execution. It is the main means of defense of the borrower. Depending on the stage, the opposition may aim, in particular, at cancellation of a Payment Order (632 of the Civil Code) or the annulment of acts of forced execution (933 Civil Code) or the correction of the first offer price of a property (954 KPolD)¹.

MDE Lawyer, Partner of our Office, Ms Varvara Eleftheriadou (AM 13365 DSTH). The body of the decision is listed.

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Decision Number: 9619/2023

Objection Filing Number: ……/………/2023

THE SINGLE-MEMBER COURT OF FIRST INSTANCE OF THESSALONIKI

Special Procedure for Property Disputes

COMPILED by Judge Angeliki Polymeni, Court of First Instance, who was appointed by the President of the Three-Member Administrative Council of the Court of First Instance and by the Secretary ……………..

He MEETED publicly in his audience on 31.05.2023 to try her with no. cat. …………………./…………./2023 opposition, between:

OF ANAKOPTONTOS: ………………………………… of ……………., resident of Thessaloniki (TIN: ………………………………..), who appeared by the power of attorney Varvara ELEFTHERIADOU (AMDSTH: 13365), who submitted proposals.

OF KATHIS THE ANAKOPI: Of the anonymous company with the name of ……………………………………., which is based in Athens (TIN: ……………………..), and is legally represented, as manager of the special purpose company named ……………………, with its registered office in Dublin, Ireland, universal successor of the limited liability banking company named ………………., which was represented by power of attorney of the lawyer ……………………..(AMDSTH:………………), who filed motions.

DURING THE DISCUSSION of the case, the attorneys of the parties requested that what is stated in the minutes of the public meeting and their proposals be accepted.

AFTER STUDYING THE LITIGATION

CONSIDERED ACCORDING TO THE LAW

In the present case, with the contested objection, the objector requests, for the reasons mentioned therein, the annulment of no. …………………/2-2-2023 report of the compulsory seizure of immovable property of the bailiff of the Court of Appeal of Thessaloniki………………….. after the excerpt of the above seizure report with the number ……………… as well as the 18-11-2022 check for payment of the following copy of the first enforceable inventory of the payment order of the Single Member Court of First Instance of Athens with number ………………./2014, as well as to order the defendant to pay his court costs.

With this content and requests, the present objection is admissibly submitted for adjudication before the competent Court in terms of content and place (art. 584 and 933 par. 1 of the Civil Code, the universal or special successor of the beneficiary cannot start or continue the forced execution before the check and the documents legitimizing it are communicated to the person against whom the execution is directed.

That is, he must notify the defendant of the check to be executed and the documents legitimizing it. This obligation is imposed both for the initiation and for the continuation under the licensor of the initial execution, and it is independent and must be done even when the defendant who executed it received knowledge of the succession from another source.

Documents legitimizing the successor are understood as proof of succession and must be communicated, whether they are public or private. It is necessary to submit the entire documents, not excerpts. These must be shared as original official documents. of insufficiency, of the simple mention of these in the check.

The violation of article 925 par. 1 of the Civil Code. entails invalidity of execution regardless of damage, since the statutory phrase <<may not commence or continue enforcement>> is equivalent to the threat of invalidity.

Furthermore, with regard to the obligation in particular to communicate the legalizing documents and in the case of the quasi-universal succession, which occurs due to the merger of joint-stock banking companies, given the complexity and variety of the individual acts that make up the merger of joint-stock banking companies, so and the corresponding documents certifying it, the requirement to communicate to the defendant the execution debtor, in the context of the regulation of article 925 par.1 of the Civil Code, of all the documents required by law for the completion of the merger, except that it is not accompanied by the spirit of the regulation of article 925 par.1 of the Civil Code, is particularly luxurious, extremely costly, but also introduces serious obstacles, unjustifiably obstructing the access of creditors to the enforcement procedure.

Forcible execution usually puts form before substance, but not to the extent that it approaches the limits of abuse. Of necessity, as the regulation of the law itself indicates, only those documents should be selected that prove the completion of the merger and document the legalization of the expediter. As the results of the merger come automatically from the law and without any other wording both for the merging companies and against third parties from the approval and registration of the approval act of the administration in the Register of Joint Stock Companies, and from the same point in time the claims and the obligations of the new company are assumed, it is obvious that the legalization of the latter begins precisely from that time (All. AP 12/1999).

So, the documents certifying the above operations and completing the merger, are the only ones that are critical and should be communicated to the debtor with the check. All of the foregoing, whatever importance and seriousness they present for the merger process per se, do not cease to be elements concerning the internal relations of the merging companies.

Outwardly, the merger becomes flesh and blood only with the approval and registration of the approval deed in the Register of Joint Stock Companies. The documents that therefore legitimize the new company, which came from the merger of the banking joint-stock companies, are the decision of the Minister of Development, by which their merger is approved, as well as the relevant announcement of the registration of the mergers in the Register of Joint-Stock Companies.

The notification of these documents is sufficient and fully complies with the legal format of the documents required by article 925 par.1 of the Civil Code. As for the notarial merger document, its possible mandatory notification, after the immediately above documents, not only does not find any support in the law, but also does not serve any practical purpose, while on the contrary it only causes obstacles to the execution and a disproportionate burden on the debtor. Of course, it is true that the notarized merger agreement constitutes, from an essential point of view, the most important condition and the most essential document of the merger process.

It is not, however, of decisive importance for the legalization of the accelerated company, which came from the merger. It does not constitute a document that proves the legalization of the new company in place of the old ones. The merger agreement may include all the terms and special agreements of the contracting companies, but this is of little interest to the debtor.

The debtor is not interested in the strength or solvency of the new company, but only if it legally succeeded the original companies. As long as the legal form of the merger is certified by the competent administrative authority, after the legality check, and the legal entry in the Register of Joint Stock Companies follows, the new company is automatically restored to the rights and obligations of the absorbed company by way of universal succession (All. AP 12 /1999) and the legalization of the new company is thus fully proven and the rights of the debtor in execution are also fully secured in every respect, just as it happens in universal succession, where the notification of the probate is sufficient for the fulfillment of the legal form of article 925 par.1 of the Civil Code.

In the case of (supposedly) universal succession, there is no need to verify the bearer of specific succession rights. The assets of the absorbed company are transferred as a whole to the absorbing company, so that the documents certifying this total transfer of assets are sufficient to prove the change of the carrier of all the essential rights and obligations, and therefore of the legalization (AP 345/2006 Law ).

However, contrary to what is required in quasi-universal succession and universal succession, as stated above, the contract of substantive law must be notified in the case of special succession, because there it is necessary to refer to the individual agreements (e.g. the assignment), in order to establish the bearer of the disputed right, which is an essential component of legalization.

In addition, if the execution had already begun, the successor should be notified of a (new) check with the relevant documents legitimizing the succession. The notification of said documents cannot be ruled out to precede or follow the check (Vathrakokoilis, interpretation of the Civil Code in article 925 par.3). The notification of the check and the documents in question is required even if the succession occurs automatically by law or by a court decision (Brinias, par. 124 I), such as in the awarding of an inherited business to one of the heirs of the beneficiary, according to the article 483.

The documents proving the succession, public or private, as previously stated, should be communicated in the original or in official copies, in their entirety and not in excerpts (MPrZak 179/1969 ArchN 1969/567), and if more are required for the completion of the succession, it is required to notify all e.g. in the sale of the beneficiary's property, both the relevant contract and the transfer certificate. The provision should be considered to apply also in the case of entrusting the management of receivables from bank loans or credits to a management company under article 1 of Law 4354/2015, as amended, which must notify the relevant management contract, as also when the its management has been assigned by a company for the acquisition of such claims and a certificate of registration in the public book of article 3 of Law 2844/2000 of the contract of sale and transfer thereof to the latter.

Violation of the provision entails nullity regardless of damage, due to the strictness of its wording, which is equivalent to a threat of nullity (AP 345/2006, Hellenic Law 2006.807-808, Faltsi, Law of Enforced Execution, 2017, I, p. 450) and it is irrelevant if the defendant had otherwise received knowledge of the succession (AP 345/2006 ibid., see P. Mazis in Interpretation of the Keramea-Kondyli-Nikas Ordinance, 2nd edition 2021, article 925, p. 163-165).

Furthermore, the problem of non-performing loans and the effects they have on the equity and liquidity of credit institutions has taken on particularly large proportions in recent years, leading the Greek legislator to enact Law 4354/2015 on the possibility management or acquisition of claims from such loans and credits from special purpose companies.

In particular, Law 4354/2015 provides two possibilities for dealing with non-performing loans of credit institutions and financial organizations: a) assigning their management to a loan and credit receivables management company and b) transferring them to a loan receivables acquisition company and credits.

In the case of the assignment of receivables management, the credit institution remains the beneficiary of the receivables and the special purpose company only undertakes the management. This may consist (article 2 par. 2 para. b of Law 4354/2015) <<especially in legal and accounting monitoring, collection, carrying out negotiations with debtors to manage claims and entering into settlement agreements in the sense of of articles 871-872 of the Civil Code or debt settlement regulation, in accordance with the Code of Ethics, as established by the no. 116/25.8.2014 decision of the Credit and Insurance Committee of the Bank of Greece pursuant to article 1 paragraph 2 of Law 4224/2013>>.

When only the management is delegated, the entity to whom the management is administered does not appear outwardly as the beneficiary of the claim, but acts in the name and on behalf of the assigned credit institution or the company acquiring receivables from loans and credits.

According to an express provision (art. 2 par. 4) the management companies are authorized, as non-beneficiary parties, to raise any legal aid and to take any other judicial or extrajudicial action for the collection of the receivables under management, while the res judicata of the relevant decisions applies in favor of and against credit institutions or companies acquiring receivables from loans and credits (for the above see A. Georgiadis, The transfer of ``red'' loans by banks and the protection of the borrower's personal data, ΧΡΙD 2018.3. D. Rousi, the special law of the assignment of claims – From the agency and securitization to the disposal of claims due to the management or sale: systematic harmonization with the general law of assignment of the AK, CHRID 2016/569. Z. Tsolakidis. Transfer of claims from non serviced loans, CHRID 2016/641).

In this case, the management companies act both on the substance and on the procedural field as <<non-entitled managers of other people's property>>, with the consequence that their exceptional legalization is derived directly from the law, since of course the prescribed contract has been concluded from Law 4354/2015 contract (see Kitsara, The further transfer of claims from loans and credits after its initial acquisition by an <<acquiring company>> of Law 4354/2015, in CHRID 2019/305 and that the exceptionally legalization of a non-beneficiary party requires a provision in a special legislative provision in N. Nikas, Civil Procedure vol. 1 par. 23 no. 5, A. Pleuris, Non-beneficiary and non-obligatory parties in civil proceedings, pp. 35-36, 59-60).

The extent and content of the legalizing authority of the management companies depends on and is the subject of the relevant management agreement (loan portfolio assignment agreement), which must be drawn up in writing and contains a) the overdue and non-overdue receivables to be managed, b) the agreed management fee, and c) the management operations, which the management company may carry out (see related D. Diakopoulos, Claims Management Companies (EDADP) and GDPR: Challenges and concerns. DEE 2018/1400).

Given that the enumeration of the legal powers delegated to the management company is indicative (article 2 par. 2b' of Law 4354/2015: <<in particular>>) it is submitted that the will of the parties may freely determine the delegated management acts, allowing or excluding some of the administrative operations referred to in article 2 par. 2 of Law 4354/2015.

However, if it is agreed as the content of the management the legal management and the collection of the claims, then this also includes the actions that lead to the satisfaction of the claims through the broad sense of judicial pursuit of them, that is through the diagnostic trial, the process of forced execution and of the insurance measures (see P. Kolotouro, Procedural authority of loan and credit claims management companies CHRID 2019/464, L. Kitsaras, ibid. and D. Rousi, ibid., and for all the above MonPrThes 10411 /2019 Pir Nom 2020.136 and Law).

With the fifth ground of his objection, upon due consideration of its content, the objector requests the cancellation of the forced execution procedure expedited against it by the objected defendant pursuant to the challenged execution act, citing that this procedure is invalid for the reason that the defendant, in violation of the provision of article 925 par. 1 of the Civil Code, did not notify her of the 18-11-2022 check for payment and the imposition of the forced seizure with the number ……/2023 confiscation report, the documents proving the legalization of the special purpose company with the name <<……………………………….>>, universal successor of the anonymous banking company with the name <<…………… …………..>> and by extension the legalization of the defendant as administrator of the latter. This reason for objection is legal according to the above legal consideration of the present and must be further investigated in terms of its substantial validity.

From all the documents that the parties legally invoke and provide, the following facts were proven:<<………………………….>> succeeded in issuing the no. /2014 payment order of the Single-Member Court of First Instance of Athens for her claim arising from the no.………………../….-….-2011 interest-reducing loan agreement, by which she was ordered to pay her the total amount of … ……….,…… euro.

Subsequently, the aforementioned Bank sold and transferred to <<………………………………>>, the claim in dispute with the sale and transfer agreement of ….-…-2019 registered with the number of first …… ./…-…-2019 in the volume…… with a/a … of the Athens Preservation Office, whose name was changed to that of the respective d by …..-…-2020 and with no. first ………………… announcement of registration in GEMI in conjunction with the Official Gazette t.B. ……../…-…-2017.

By serving the objector with a check for payment from 11-18-2022 and imposing a forced seizure of immovable property, the defendant submitted to the objector a summary of the above contracts of sale and transfer and assignment of the management of the disputed claim, and specifically the above with no. . prot…….. /….-….-2019 and ……./….-…-2019 publications of the Athens Preservation Office.

However, the expedited forced execution (delivery of the challenged check for payment and imposition of seizure) was carried out by the defendant company as manager of the above beneficiary company-special successor of the original lending banking company, which never and in any way did not proceeded, as required by law, to also notify its legalizing documents, as provided for in article 925 of the Civil Code and, in particular, did not notify the objector of the entire text of the original contract from ….-…-2019 for the transfer and assignment of claims and the one from ….- ...-2019 of the receivables management contract, except for the above documents of the Athens Bailiff Office where the summary of them is recorded.

With the communication of the transfer contracts in question in their entirety and the extract from the list with the specific requirement, the execution-stopper defendant would have the opportunity to adequately and fully check the active legalization of the one speeding up the execution and especially if the management contract the claim of the creditor bank is included, if the assignment contract has been drawn up legally and if it foresees the possibility of judicial pursuit of the claim, while the conditions of the transfer contracts that possibly contain quantitative or time limitations regarding the transfer or the judicial could be checked pursuit of the imposed requirements, disputes regarding them or even the external elements of legality of the transfer contracts, in order to present any invalidities thereof by the objector, which he is entitled to present according to article 261 of the Civil Code.

It is noted that the requirement to notify the legalizing documents of the expediting party to the defendant referred to in the entire text of the transfer agreements and on the page of the Annex that concerns the respective expediting claim and not in the entire Appendices thereof, which refer to details of all the transferees claims, so that in this way excessive costs and particular practical difficulties are not created during the service stage, nor is there any question of sharing personal data of third party debtors or other information covered by bank secrecy, according to the provisions of Regulation 2016/ 679 of the European Parliament and of the Council of April 27, 2016 for the protection of natural persons against the processing of personal data and for the free movement of such data.

In any case, even if it were to be appreciated that the purpose of the legislator was for the content of the publication forms of the contracts of sale and transfer of business claims to constitute at the same time the minimally necessary material that is communicated to the defendant in order to inform him of the resulting special succession, so the content of the forms should contain all the necessary information referred to in the provisions of Law 2844/2000 and in the Ministerial Decision in force at the time of publication.

Therefore, in accordance with these provisions, the amount of the transfer price, the essential terms of the contract, the capital owed per business claim and per total and the amount up to which it is insured must be stated, as well as the type of transferred business requirements through their general description and the currency (art. 10 par. 8 of Law 3156/2003, in conjunction with the Official Gazette 161338/2003, Official Gazette B, 1688/18-11-2003, Official Gazette 20783/2020, Official Gazette B' 4944/9.11.2020 and par. 14 and 16 of article 10 of Law 3156/2003).

Except, however, in this case, in no. …………/…-…-2019 form published at the Athens Bailiff Office, regarding the amount of the purchase price, it is noted that this is determined in accordance with article 3 of the business receivables contract dated …..-…-2019, without any other determination , and in the section of these under the title <<other essential terms>> no term is mentioned. In addition, while, in the no. 3 a' term of the contract from ….-…-2019 in the General Description of the business claim it is written that the claims of the transferor company will be described by business claim capital, accrued interest and claims from expenses, in the numbered …… appendix extracted from the books of the Athens Preservation Office in the volume ….. dated c/o ……., which was communicated to the objector, the capital per business claim after accrued interest and claims from expenses is not mentioned in detail, in accordance with the above condition.

After this, the notification of the entire transfer and receivables management contracts with the above information, and not only the excerpts and summaries thereof, is necessary, in accordance with the provisions contained in the main clause of the present (see also EfAth (Mon) 8/2023, MonEfThessal 2103/2021 civil law, Greek Law 298/2022 civil law, Greek Law 13/2022, civil law, Greek Law 9462/201 TNP LAW).

The claim of the defendant that the notification of the entire transfer contracts is not required in this case, but the excerpts are sufficient, is not legal, according to what is contained in the legal reasoning herein, since in the event of a special succession, as in this case, the entire the contract of transfer. After all, as developed in relation to the main consideration of the present, the violation of article 925 par. 1 of the Civil Code entails the invalidity of the execution regardless of damage, given that the phrase of the law <<may not start or continue the forced execution>> is equivalent to the threat of invalidity.

Consequently, the above ground of objection must be accepted according to the above as essentially valid, without the investigation of the other grounds of objection and additional grounds of objection, since they aim at the same result, to accept the objection under consideration, to cancel the numbered ……/…-….-2023 report of forced seizure of immovable property of the bailiff of the Court of Appeal of Thessaloniki ………………………………… after the number …………. extract of the above confiscation report, as well as the 18-11-2022 check for payment of the following copy of the first executable inventory of the no. ……………/2014 payment order of the Single-Member Court of First Instance of Athens and to condemn the defendant's opposition due to her defeat in the present trial to the payment of the court costs of the objector (art. 191 par.2 and 178 KPolD 58,63, 65, 66, 68, 84, 166 of Law 4194/2013), as defined in the ordinance.

FOR THOSE REASONS

JUDGES opposition of the parties.

GRANTS the objection.

CANCELLS the report numbered ……../ ….-….-2023 of forced seizure of immovable property of the bailiff of the Court of Appeal of Thessaloniki ……………after him with number …………. extract of the above confiscation report, and the check from 11-18-2022 for payment of the following copy of the first executable inventory of the no. ……………/2014 payment order of the Single Member Court of First Instance of Athens.

CONDEMNING the defendant's objection to the payment of the court costs of the objector, which he sets at the amount of eight hundred (800) euros.

JUDGED and decided on 12-07-2023.

THE JUDGE THE SECRETARY

PUBLISHED at an extraordinary public meeting in his audience, in Thessaloniki on 12-07-2023 (and considered the same day).

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1. Objection is admissibly exercised within short period from the notification of the contested act. For this reason, it is special immediacy of communication to provide legal support is important.
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