In a ruling handed down on 17 May 2023, the Second Civil Chamber reminds us of the consequences of the principle of indivisibility of the dispute in a property seizure.
I. The principle of indivisibility in property seizure proceedings
A. The need to involve all registered creditors: the basis of indivisibility
The principle of indivisibility in property seizures is explained by the participation of all parties in the distribution of the price. Registered creditors who have not declared their claim are not excluded from the distribution. They retain rights to the price, but are simply downgraded to unsecured status.
The outcome of the appeal may therefore directly affect their chances of being paid, even partially. This is why the Cour de cassation requires them to be called to account under article 553 of the Code of Civil Procedure (Civ. 2ᵉ, 21 February 2019, no. 17-31.350; Civ. 2ᵉ, 2 December 2021, no. 20-15.274).
B. The judgment of 17 May 2023: a significant turning point
In the case decided on 17 May 2023 (Civ. 2ᵉ, no. 21-14.906), a bank had commenced property seizure proceedings against a debtor company. After obtaining a judgment ordering the compulsory sale, the debtor company appealed but without notifying the registered creditors.
The Court of Cassation raised a plea in law of its own motion, quashing the appeal judgment on the basis of articles 125 and 553 of the Code of Civil Procedure. The Court's reasoning is clear: the plea of inadmissibility based on the fact that the registered creditors were not called upon is a matter of public policy.
C. Practical consequences for lawyers
It is therefore essential for the lawyer handling an appeal in a property seizure case to :
- Check the list of registered creditors with the land registry,
- Systematically notify all creditors, even those who have not declared their claims.
Furthermore, you need to be particularly vigilant with regard to the practices of judges. Some judges do not mention non-declaring registered creditors at all in the orientation judgment. Others either make no mention of the registered creditors declaring in the list of parties, or refer to them only in the body of the judgment.
These highly disparate practices reflect a lack of training among judges in the seizure of property procedure. These problems are not confined to small courts, where there are too few judges to be specialists. We have already been confronted with problems of this type in first-rate courts.
II. The court's obligation to note inadmissibility of its own motion
The Cour de cassation also states that the failure to call on the registered creditors constitutes an objection that the court must raise of its own motion under article 125 of the Code of Civil Procedure.
For the appellant, this means that his appeal may be declared inadmissible long after the deadline for regularisation has expired.
This solution echoes a similar solution adopted in relation to appeals to the Supreme Court (Civ. 2ᵉ, 13 April 2023, no. 21-18.006).
III. Regularisation of the call in the event of omission of a registered creditor
A. Regularisation by second statement of appeal
The appellant may rectify the situation by filing a second statement of appeal to notify the creditor(s) omitted. Case law has specified that this second statement of appeal "regularises the appeal, without creating a new instance, which remains unique". (Civ. 2ᵉ, 15 April 2021, no. 19-21.803).
There are, however, strict time limits to this mechanism, linked to the particularly short time limits for appealing against property seizures (15 days from notification of the judgment).
B. Specific features of fixed-date proceedings
When the appeal is lodged against the referral judgment, it is subject to the "jour fixe" procedure. In this case, the Cour de cassation has ruled that when "the proceedings are validly commenced under the fixed date procedure, the first statement of appeal having been preceded or followed by a regular application for authorisation to summon by fixed date, [...] the second statement of appeal does not require a new application to be made". (same judgment of 15 April 2021).
This is a pragmatic solution, although it in no way reduces the difficulty of the procedure.
Sources
- Civ. 2ᵉ, 17 May 2023, F-B, no. 21-14.906, Dalloz actualité, 13 June 2023, obs. G. Payan
- Civ. 2ᵉ, 21 February 2019, no. 17-31.350, Dalloz actualité, 21 March 2019, obs. R. Laffly; D. 2019. 1306, obs. A. Leborgne
- Civ. 2ᵉ, 2 December 2021, no. 20-15.274, Rev. prat. rec. 2021. 8, obs. M. Draillard, A.-I. Gregori, O. Salati and C. Simon; RTD civ. 2022. 209, obs. N. Cayrol
- Civ. 2ᵉ, 13 April 2023, no. 21-18.006, D. 2023. 796; Procédures 2023. Comm. 170, obs. C. Laporte
- Civ. 2ᵉ, 15 April 2021, no. 19-21.803, Dalloz actualité, 5 May 2021, obs. G. Payan; D. 2022. 625, obs. N. Fricero; Procédures 2021. Comm. 165, obs. C. Laporte
- Code of Civil Enforcement Procedures, articles L. 311-2, L. 311-4 and L. 311-6
- Code of Civil Procedure, articles 125, 553 and 620
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