Defense against Execution affecting the property of a person other than the debtor

26/07/2022

In practice, during the enforcement of a decision (execution), it happens that a bailiff seizes property that does not belong to the debtor, but to a third party not involved in the enforcement proceedings. This third person has a right to the property that excludes enforcement (in particular the right of ownership, but also the right of possession). In such cases, this person may defend himself/herself by filing a motion to strike out the property from the inventory and, where appropriate, file an exclusion (extinction) action.

If the bailiff does not use assignment of the claim or deductions from wages and other income to effect the execution, or if these methods do not lead to the payment of the claim, he may proceed to the sale of movable or immovable property.

In the case of immovable property, it is rare (due to ownership publicity in the cadastre), for a bailiff to distraint immovable property owned by a person other than the debtor. However, also a pledgee or mortgagee may, in certain circumstances, be placed in the position of a person with a right over immovable property which precludes execution.

Movable property is inventoried by the bailiff in the course of execution (mobile execution). The general public is aware of the existence of "yellow stickers" with the bailiff's stamp, which mark the seized property. If the person with the right to the item precluding execution is present at the inventory, he or she may present documents proving this right to the bailiff on this occasion (e.g. a purchase or donation contract proving their ownership). The bailiff may, upon assessment, refrain from inventorying of the particular thing, but the bailiff can also decide to include it in the inventory.

Application for removal of an item from the inventory - attention to deadlines

In the case of an inventory of movable property, the person with a right to the property not allowing execution may defend themselves by filing a motion to strike the property from the inventory. The application must be made in writing to the bailiff who took the item into inventory (typically the bailiff in charge of the execution) and must be filed within 30 days of the date on which the claimant became aware of the inventory. The petition must be accompanied by documents and deeds proving the right to the non-executable property - these items must then be identified, e.g. by reference to the item number in the inventory. However, a situation may arise where the person with the right to the thing is not present at the inventory and thus may not have the necessary information to file the motion. In such a case, the bailiff is obliged to provide that person with the necessary information (e.g. the file number or the name of the debtor) upon his request.

The bailiff is obliged to decide on the application for removal from the inventory within 15 days of receipt of the application. If the bailiff then assesses the complete, comprehensible and specific application as justified, or if the creditor agrees to the removal of the thing, the bailiff shall decide on the removal of the thing(s) from the inventory.

Rejection of the application and bringing of the action - further time limits

If the bailiff rejects the application, even partially, the claimant may, within 30 days of the receiving of the rejection decision, file an action for the exclusion of the property from the inventory with the Enforcement Court (the Court of the debtor's local jurisdiction or the Court in whose district the debtor has property). The defendant is not the bailiff, but the creditor, and the subject of the proceedings will be the determination of the existence of the plaintiff's right to the property which excludes the execution.

It should be noted that the failure to file an application for the removal of an item from the inventory is not an obstacle to bringing an action. At the same time, however, an action for exclusion of the property from the inventory cannot be brought if the inventoried property has already been sold. In such a case, the person whose thing has been sold may claim from the creditor the proceeds of the sale of the goods by way of an action at law.

Conclusion

As can be seen from the above, both the law provides persons whose property has been unreasonably affected by the enforcement of a decision with tools to defend their rights. However, the effectiveness of these tools must be assessed in the context of the reality of everyday life experience. While proving the existence of a third party's right to the property is a condition for its exclusion form enforcement, evidence of that right may be scarce or non-existent. Often, property of the family living together with the debtor is affected by the execution. The exception is matrimonial property, which can be affected to certain extent under the law. At the same time, each of us owns a lot of things, often of considerable value, for which we can hardly find proof of ownership - for example, not everyone receives a file of donation agreements on Christmas Eve. In the proceedings on the exclusion of the property from the inventory, unlike in the case of an application for removal from the inventory by a bailiff, the Court assesses evidence - documentary evidence, as well as witness testimonies may prove the existence of ownership rights.

If the bailiff has inventories or distrained a thing that belongs to you during the execution against someone else, we recommend not to delay solving the problem and preferably to contact a lawyer immediately.