Stay of execution on the basis of the fiction of the beneficiary's consent From the viewpoint of the Supreme Court
Omission of the beneficiary need not mean permanent loss of the claim
Author of the article: Mgr. Filip Ondřej, ARROWS advokátní kancelář (office@arws.cz, +420 245 007 740)
Imagine a situation where you, as the beneficiary in a foreclosure action, neglected to respond to a bailiff's summons. This seemingly minor mistake could have led to the suspension of the execution and the apparent impossibility to recover your claim again. However, in its latest decision (Case No. 20 Cdo 1604/2024), the Supreme Court confirmed that the suspension of execution on the basis of the so-called fiction of the beneficiary's consent pursuant to Section 55(3) of the Enforcement Code does not constitute an obstacle to a final decision. What does this mean for creditors and debtors?
How does the fiction of the beneficiary's consent work?
Pursuant to Section 55(3) of the Enforcement Code, if the beneficiary does not comment on the debtor's motion to stay the execution, his consent to the stay is deemed to be given after the expiry of the comment period. This means that the bailiff shall stop the execution in accordance with this provision without (materially) examining the reason claimed by the debtor.
Supreme Court: the bar of rei iudicatae does not apply
The lower courts initially stopped the second execution because they considered it inadmissible due to the existence of the res judicata bar. However, the Supreme Court has taken the view that a decision to stay the execution on the basis of the fiction of consent is not a substantive decision on the existence of a claim and that , therefore, the execution proceedings may be reopened on the basis of the same enforcement order.
Key arguments of the Supreme Court
- There was no real (substantive) review of the justification for the suspension of the execution, the bailiff decided only on the basis of the fiction of consent.
- The right holder could lose his claim only because of a formal error, which would constitute a manifest injustice bordering on the rule of law.
- There is no reason to exclude completely the possibility for the creditor to reopen the execution.
Thus, the fiction of the consent of the beneficiary under Article 55(3) of the Enforcement Procedure Code does not constitute an obstacle to a final decision, in other words, the beneficiaries are not forever barred from recovering their claim simply because they did not respond to the bailiff's summons in the original enforcement proceedings,
The impact on the beneficiaries
If the creditor fails to respond, the enforcement proceedings may end without any real review of the merits of the application for stay of execution.
If the execution has been stopped due to the fiction of consent, the beneficiary may propose to restart it. The Supreme Court makes it clear that such a decision does not create a bar to a final judgment.
However, it remains essential for the beneficiary to actively respond to the bailiff's calls during the execution.
The impact on the mandatory
For debtors, this means that if the execution has been stopped on the basis of this fiction, their situation may not be finally resolved. The Supreme Court has now made it clear that in such cases, there is no substantive decision on the discharge of the debt and the obligee can re-petition the enforcement of his claim.
Thus, the strategy of "waiting to see if the obligee responds" is not reliable in the long run.