The orientation hearing is the main stage in the foreclosure procedure. It is at this hearing that the debtor can put forward his arguments. It is also at this orientation hearing that the case is directed towards an amicable sale or an auction.
An analysis of the process, the role of the enforcement judge and the most common requests.
The course of the orientation hearing
The role of the enforcement judge
Article R. 322-15 of the Code of Civil Enforcement Procedures requires the court to verify ex officio that :
- The creditor is the holder of a writ of execution evidencing a claim that is due and payable.
- The writ of execution is final.
- When the decision has been rendered by default and the time limit for lodging an objection has expired.
- The seizure relates to an immovable property.
The case law of the Court of Justice of the European Union also requires it to check for unfair terms.
Once this analysis has been carried out, it sets the amount of the debt and determines the procedures for continuing the proceedings.
Involvement of a lawyer
The parties must be present or represented. They must appoint a lawyer (article R. 311-4 of the Code of Civil Enforcement Procedures). The seizure of property procedure is so complex that the legislator wanted to protect the debtor. The quality of his defence is guaranteed by the intervention of a court officer.
The only exception concerns the request for an amicable sale, where the debtor alone can request authorisation for an amicable sale.
The need to raise all defences
The debtor must present all his objections and incidental claims at the orientation hearing.
The debtor will no longer be able to raise a defence after the referral judgment. Only events occurring after the referral ruling may be contested (article R. 311-5 of the Code of Civil Enforcement Procedures).
The orientation hearing is therefore a crucial stage, as it seals the proceedings.
Postponement of the orientation hearing
The request for referral is made orally at the orientation hearing.
The Court of Cassation has ruled that this request for referral is admissible and that incidental claims must be lodged no later than the referral hearing (Civ. 2e, 23 October 2008, no. 08-13.404).
Furthermore, the referral hearing does not necessarily have to take place within a maximum of 3 months from the date of the summons (Civ. 2e, 24 June 2010, no. 09-67.887).
The most common complaints and requests
It is impossible to draw up an exhaustive inventory of the defences that debtors may put forward. Each case is unique and debtors do not all pursue the same objectives. Nevertheless, certain claims are expressly provided for in the Code of Civil Enforcement Procedures. These are the ones we are going to analyse.
For a more in-depth study of the means of defence, readers can refer to our dedicated publication. Legal professionals will be able to find out more about our defence file.
Wrongful seizure of property
Article L. 111-7 of the French Code of Civil Enforcement Procedures states that :
"The creditor has a choice of measures to ensure the performance or preservation of his claim. The execution of these measures may not exceed what is necessary to obtain payment of the obligation.
Article L. 121-2 of the Code of Civil Enforcement Procedures adds that :
"The enforcement judge has the power to order the release of any unnecessary or abusive measure and to order the creditor to pay damages in the event of abuse of seizure.
Article L. 121-2 mentions two criteria: uselessness and abuse.
With regard to uselessnessIn this case, a debtor invoked it to fight a seizure on the grounds that he could pay his debt in 10 months. The Court of Cassation upheld the attachment (Civ. 2, 22 June 2017, no. 16-16.871).
With regard to abusecase law identifies three criteria:
- The small amount being recovered,
- The existence of alternatives to foreclosure,
- The fact that the sale does not enable the pursuing creditor to be paid.
The position of the Courts of Appeal is relatively uniform in this respect (Aix-en-Provence Court of Appeal, 15 June 2009, Agen Court of Appeal, 19 June 2012, no. 12/00688).
Confinement of the seizure of property
Article L. 321-6, paragraph 1, of the Code of Civil Enforcement Procedures authorises the debtor to request that the seizure be confined:
"In the event of the simultaneous seizure of several of the debtor's properties, the debtor may ask the court to limit the seizures.
Seizure can be limited to one or more of the debtor's properties. The judge may authorise the attachment if the debtor can prove that he will be able to pay his debts.
A stay of proceedings within the meaning of Article 378 of the Code of Civil Procedure:
"A stay of proceedings shall suspend the course of the proceedings for the time or until the occurrence of the event that it determines.
The request for a cantonment will therefore be submitted in limine litis. Failing this, it will be deemed inadmissible pursuant to the provisions of articles 73 and 74 of the Code of Civil Procedure.
Manifest inadequacy of the reserve price
Article R. 322-5 of the French Code of Civil Enforcement Procedures states that :
"In addition to the information required by Article 56 of the Code of Civil Procedure, the writ of summons shall include, on pain of nullity :
[...]
5° An indication of the upset price as set out in the conditions of sale and of the possibility of contesting the amount on the grounds of manifest inadequacy;".
The summons for the orientation hearing will include an indication of the upset price set in the terms and conditions of sale, which the debtor may contest at the orientation hearing:
"The debtor may, in the event of a manifest inadequacy in the amount of the reserve price, apply to the court to have a reserve price set in relation to the market value of the property and market conditions. However, in the absence of a bid, the debtor may only be declared the successful bidder for the initial reserve price. (article L. 322-6, paragraph 2, of the Code of Civil Enforcement Procedures).
The debtor must show that the upset price is manifestly insufficient. The interests of the debtor and the creditor are sometimes antagonistic in this respect:
- It is in the creditor's interest to set a low reserve price. If there is a lack of bids, the creditor will be declared the winning bidder. This is a penalty that the creditor will want to avoid by guaranteeing the sale with a low reserve price.
- The debtor, on the other hand, will want to rule out unserious bidders. To attend the auction, you must have a cashier's cheque for 10 % of the hammer price. A high bid means that only the very wealthy have access to the auctions.
The grace period
The period of grace may be granted by the enforcement judge.
Article 510 of the Code of Civil Procedure states that :
"Subject to the following paragraphs, the period of grace may only be granted by the decision whose enforcement it is intended to defer.
In urgent cases, the interim relief judge has the same power.
After service of a summons or writ of seizure, or from the date of the hearing provided for in thearticle R. 3252-17 of the French Labour Codeas appropriate, the enforcement judge has the power to grant a period of grace.
Reasons must be given for granting the extension.
The debtor may not request a period of grace:
- if it is in receivership,
- or if he has reduced the guarantees that he had given by contract to his creditor.
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