April 2023

Judgment of the Athens Court of Appeal on the Suspension of the Auction due to Non-Existence of the Attachment Report

The decision of the Athens Court of Appeal (67/2023) was issued, suspending the auction of a property used for a commercial business. The appellate court presumed the merits of the appeal brought by our client against the first instance decision which, wrongly, dismissed her appeal against the enforcement procedure and, therefore, granted the application for suspension under the new article 938 para. Despite the late submission of the relevant application, the latter was filed only four (4) working days before the auction day and not five (5) working days, as required by law in Article 938 para. 3 of the CCP, the same was deemed admissible. In particular, a request for the restoration of the property to its previous state (pursuant to Article 152 of the CCP) was submitted together with the appeal - application for suspension and was granted, which requested, on the merits, the shortening of the preparatory period for the exercise of the suspension remedy due to force majeure in the observance of the statutory time limit. That is because the decision at first instance and subsequently challenged on appeal was delivered only four (4) working days before the auction, and it was factually impossible to comply with the five-day time-limit for filing the application for suspension with the Court of Appeal. In practice, it is very often the case that decisions on appeals against enforcement are issued literally at the last minute, leaving extremely limited scope for the alleged debtors to react procedurally if their appeal is rejected. That practice requires the alleged debtor to be fully alert, given the strictness of the case-law, which requires the latter to make the application for suspension of enforcement even on the same day as the judgment at first instance, if that is the last day for lodging an appeal within the time-limit.

The reason that was presumed by the Court of Appeal to be valid was the lack of service of the seizure report. In particular, the debtor had notified the creditor company that her residence had changed, yet the latter served the attachment report at her old residence. As we have also written here, the following was also recently decided in AP 936/2020: 'The failure to serve a summary of the seizure report of a property is also equated with the service of the report at a residence other than the actual residence of the person to whom the service relates, since, because of this incorrect service, he is unaware of the auction that has been called and can, if it is held, challenge it, without more, as invalid within the time limit of Article 934(1). c of the CCP, with an objection in which he will rely for its admissibility that the person who expedited the execution knew his actual residence or that he had timely notified him of any change in it (OLAP 3/2007, AP 477/2019, AP 1869/2017, AP 1081/2014, AP 8/2011)'.

Finally, it is important to emphasise the following: in order for a suspension application to be admissible before the Court of Appeal, the latter must accept irreparable harm to the applicant. This is usually presumed in cases where the auction is being accelerated for a property which is used as the debtor's primary residence. However, it has been accepted in case law that irreparable harm is also suffered by a debtor who is at risk of losing lucrative property from which he derives income to cover arrangements with third party creditors. In the case at issue, this was indeed accepted on the following grounds: "It is also likely that the continuation of the enforcement would cause irreparable damage to the applicant, since the property is lucrative (leased by the applicant for a monthly rent ..... €/month) and with the proceeds the applicant is already fulfilling its settled debts to the AADE and the EFKA, while at the same time it can make a relevant arrangement with the defendant in order to gradually pay off its debt to the defendant'.

(for more see here and here)