December 2023

Judgment of the Magistrate Court of Agrinio on the Reversal of Seizure of Property (1019 CCP)

Decision No. 258/2023 of the Agrinio Magistrate Court was published, which reversed the foreclosure that had been imposed, under which an auction of the debtor's property was being accelerated. 

In the case in question, the Servicer imposed a foreclosure on the debtor's property in order to satisfy the claims of the foreign special purpose company and an auction of the property was scheduled. However, on the date set for the auction, the auction, although it took place, was declared inconclusive due to the lack of bidders. After the auction was aborted and for a long period of time the Servicer sat idle without exercising any subsequent enforcement action and came back after 15 months declaring the auction to continue before the Notary who had been appointed as the auction officer. Following the declaration of continuation submitted, a new auction date was set, pursuant to the same seizure report, within thirty (30) days of the submission of the declaration of continuation (pursuant to Article 966 para. 2 of the CCP, the auction that was cancelled due to lack of bidders shall be resumed with the same first bid price and on a date set by the auction clerk within forty (40) days from the date of filing of the resumption statement by the auctioneer). 

In our petition filed before the Magistrate Court of the place of execution (the place where the seized property is located), we requested the reversal of the imposed seizure, since a period of more than one year had elapsed from the date of the imposition of the seizure without an auction having been held, pursuant to Article 1019 of the Civil Code. Under that article, if the foreclosure has not been followed by an auction within one year of its imposition or by a re-auction within six months of the auction, it may be reversed at the request of any person having a legitimate interest by a decision of the Magistrates' Court in the district in which the foreclosure was imposed, which shall hear the case in the proceedings for interim measures.

The Court held that at the relevant time of the hearing of the appeal, a period of more than a year (365 days) had elapsed since the imposition of the foreclosure without an auction having taken place, holding that the inactivity of the Servicer after the failure of the first auction was not justified, nor was it in any real or legal impossibility to continue the auction. For this reason, it reversed the seizure imposed by ordering the Notary appointed as the auction clerk to refrain from continuing the enforcement proceedings and to suspend the auction scheduled to take place in a few days. 

Finally, it should be noted that the reversal of the foreclosure is effective against all parties from the publication of the decision ordering it and has the effect of terminating the enforcement proceedings.