Absurdities of Enforcement – Those Who Do Not Regularly Check the Right Websites May Lose Their Claims

Since the existence of courts, there has been a problem of enforcement. The exception is court proceedings in which so-called constitutive decisions are made that do not require enforcement, while the rule is those in which enforcement is necessary, in other words, unavoidable. An example of a court decision without enforcement is, for instance, proceedings involving divorce. The best example of a court decision that requires enforcement is one that orders the defendant to pay a certain amount under the threat of enforcement if not paid voluntarily. For a long time now, the idea of relieving the burden has been a fundamental positive trend in the Croatian judiciary, under which many things, both positive and negative, are hidden.

It is notorious that enforcement proceedings heavily burden the courts; it is not a recent fact that several thousand enforcement decisions were found at the second-largest court in our country for which delivery was never attempted. Numerous enforcements at the courts have lasted for years, and no one complained when public notaries and Fina were involved in that process. Now it remains to check whether the objections that Fina behaves in some way as a ‘court above the court’ are justified or not, and according to which legal security and the rule of law are endangered for certain reasons. Here is what it is about.

Inconsistencies of Publications

Parties have somehow gotten used to gathering information about proceedings in which they have an interest through court bulletin boards (including the e-bulletin board). Of course, this is not equally simple and accessible to a legally and/or informatically uneducated person as it is to someone who has knowledge, and if they lack knowledge, they have the means to hire experts to do the job. Since the amendment of the Enforcement Act in 2014, Article 95 has been in force, according to which the sale of real estate is conducted by the Agency (Fina), and the request for sale is submitted to the Agency by the court.

To implement this change, several subordinate regulations have been adopted, including the Regulation on the Types and Amounts of Fees for Performing the Sale of Real Estate and Movable Property in Enforcement Proceedings. According to this Regulation, Fina will publish a call for the payment of an advance for covering the costs of conducting the sale by electronic public auction on its website. If the creditor does not pay the advance in full within the prescribed period, the Agency will not conduct the sale and will notify the court within eight days. According to these provisions, Fina publishes the call for the payment of the advance for the sale of real estate on its web-site, whereby the document is considered delivered at the moment it is published, and the deadline for payment is eight days.

Thus, if the creditor does not check Fina’s web-site daily, they will miss the deadline. It is particularly illogical that there is no indication of the same publication in the Register of Movable and Immovable Property of Fina. These provisions circumvent the usual procedural delivery procedure, allowing Fina to publish on a separate platform, which is considered valid, leading to the suspension of enforcement proceedings that last for years and may also lead to the complete loss of the creditor’s claim due to the statute of limitations. Such a method of delivering documents that can lead to the suspension of enforcement is, at the very least, absurd, and we believe it seriously endangers both legal security and the rule of law as fundamental principles of any legal state.

Of course, anyone can say that the suspension of enforcement proceedings is not a problem because enforcement can be initiated again. However, firstly, all payments from the suspended proceedings are lost, and even more importantly and dangerously, it is possible that at the time of re-proposing enforcement, the claim has expired. Otherwise, the statute of limitations for claims based on a final judgment is 10 years. If this happens because the delivery is considered executed when it has not actually been executed, the situation is catastrophic. In this regard, the solution is quite simple; why, for example, should the announcements made by Fina not automatically also appear on the court’s e-bulletin board?!

Problematic Public Auctions

After the aforementioned problem, another should be added. Namely, since 2014, all those who intend to purchase at a public auction are required to pay a deposit (10 percent). This is not controversial for third parties, but if there is a mortgage creditor, we see no reason to require a deposit payment, especially since an advance has been paid for the auction costs (without which the proceedings would be suspended). Even if we accept that the (mortgage) creditor is not explicitly mentioned anywhere, in the enumeration of those who have the right to participate in the auction, only those who have paid the deposit are included (Article 132 of the e Enforcement Act). The real question is whether a creditor, almost ruined by the debtor’s obstructions, must have the means to pay the deposit?

To avoid the impression that the only objections are against Fina and the creator of the legal framework, it should be emphasized that even where legal expertise is usually concentrated – in the courts – there are reasons for concern. Recently, we had the opportunity to see a decision of the competent court in which the court completely unlawfully determined which rights and burdens are deleted when the buyer is awarded after an electronic auction of real estate, i.e., what remains unremoved.

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