RELEVANCE OF THE CASE – Cluj Attorney for Preliminary Injunction
In practice, the process of obtaining an enforceable title for the recovery of amounts owed by the debtor can take a considerable amount of time, especially due to the heavy workload of the courts. The adjudication of a complex case can sometimes take years, during which the debtor may dissipate its assets, thereby causing, in some cases, irreparable damage to the creditor’s estate.
The legislator considered these aspects and established protective measures precisely to safeguard the rights of the creditor who is in the process of obtaining an enforceable title. It is important to mention that both precautionary seizure and garnishment are exceptional measures and can only be imposed under the special conditions provided by law.
Precautionary seizure is a measure aimed at freezing the debtor’s attachable movable and/or immovable assets in their possession or in the possession of a third party. Garnishment, on the other hand, can be applied to monetary amounts, securities, or other attachable intangible movable assets owed to the debtor by a third party or that will be owed in the future based on existing legal relationships.
Summary of the Facts – Cluj lawyer for preliminary injunction
Between the defendant company, as the promissory buyer, and a third-party individual, as the promissory seller, a framework contract was concluded for the promise to transfer to the promissory seller a 1,700 sqm share of a 2,700 sqm plot located in Cluj-Napoca, along with the promise to assign to the defendant the benefit of two building permits issued for the 2,700 sqm plot.
The defendant undertook the obligation to build and complete the construction permitted by the building permits for a collective residential building by July 2019.
In 2018, the claimant company, as the promissory buyer, represented by Brisc Legal attorneys specializing in preliminary injunction measures, entered into a promise of sale-purchase agreement with the defendant, as the promissory seller. The defendant committed to acquiring ownership rights over three apartments in accordance with the framework contract. These apartments were later to be sold to the claimant in exchange for €400,000.
In 2020, an addendum to the promise of sale-purchase was concluded between the claimant and the defendant, modifying the price to €650,000. Up until the emergence of problems, the claimant had paid €560,000 of the agreed total.
Due to the defendant halting the construction of the collective residential building, the claimant refused to pay the remaining installments, justified by the defendant’s inability to fulfill its obligation to sell the three apartments.
At the end of 2020, the individual owner of the land notified the defendant of the automatic termination of the framework contract and continued the construction through another specialized company.
The claimant, represented by Cluj-Napoca real estate attorney Horațiu Brisc, identified numerous lawsuits involving the defendant on the court portal, related to the construction of the building subject to the framework contract. The claimant attempted to clarify the legal situation and recover the €560,000 already paid as an advance from the defendant. The defendant refused to return the amount, citing the exception of non-performance of the contract due to the unpaid €90,000 by the claimant.
In 2023, the claimant formally notified the defendant of the unilateral termination of their promise agreement and filed a lawsuit requesting the court to order the defendant to return the €560,000 due to the unilateral termination, along with legal interest and an adjustment for inflation.
LITIGATION IN THE FIRST INSTANCE, AT THE BISTRIȚA-NĂSĂUD TRIBUNAL
Through the lawsuit, the claimant requested the court to impose the following protective measures against the defendant:
- Precautionary seizure on all movable and immovable assets of the defendant, up to the amount of €560,000.
- Garnishment on all monetary sums, securities, or other attachable intangible movable assets owed to the defendant by a third party or that will be owed in the future based on existing legal relationships, up to the amount of €560,000.
The Brisc Legal attorneys argued that the same conditions must be met for both precautionary seizure and garnishment. Regarding the requirement for the claim to be documented in writing, they demonstrated that the promise of sale-purchase, the addendum, proof of payment, and the notice of unilateral termination serve as documentary evidence of the claim.
Furthermore, the claimant, through Brisc Legal Cluj attorneys specializing in business law disputes, proved that the claim’s enforceability resulted from the notice of unilateral termination sent to the defendant. As a result of the termination, the contract was rescinded, and the parties were restored to their prior positions, obligating the defendant to return the €560,000 to the claimant.
The claimant also demonstrated that they had filed a lawsuit to recover the €560,000, thus seeking an enforceable title for the claim, which justified the protective measures.
Regarding the requirement to pay a security deposit, the claimant stated that they would comply with this obligation if the court deemed it necessary when ruling on the protective measures.
Despite the facts and all the legal arguments presented by the claimant, the Bistrița-Năsăud Tribunal unexpectedly ruled that the first condition—whether the claim was documented in writing—was not met. The court argued that the claim was not documented in writing because the possibility of unilateral termination was not explicitly detailed in the promise of sale-purchase.
The court erroneously held that the repayment of the paid price was contingent on declaring the rescission within the legal prescription period for filing a lawsuit to obtain a judgment in lieu of an authentic sale-purchase agreement—i.e., within six months from when the sale contract should have been concluded. Since the termination notice was not given within this prescription period, the court found that the claimant’s claim was not documented in writing.
As will be shown below, following an appeal filed by Brisc Legal attorneys, the decision was entirely overturned by the Cluj Court of Appeal, which ordered the imposition of protective measures.
LITIGATION IN APPEAL, AT THE CLUJ COURT OF APPEAL
The claimant, through Cluj attorney Horațiu Brisc, appealed the decision, seeking to overturn the lower court’s ruling and have the case retried by the Cluj Court of Appeal, which was requested to grant the protective measures. The claimant argued that the lower court had misapplied the law, as all conditions for the imposition of precautionary seizure and garnishment were met.
In alignment with the arguments presented by Brisc Legal attorneys from Cluj, the appellate court held that the prescription of the claimant’s right to recover the €560,000 should be analyzed in conjunction with the enforceability of the claim. It found that the lower court had unlawfully invoked the statute of limitations on its own initiative. Moreover, the court ruled that the prescription defense had been incorrectly applied.
The Cluj Court of Appeal determined that the unilateral termination notice should be subject to the prescription period for a lawsuit seeking contract rescission, rather than the period applicable to obtaining a court ruling substituting for an authentic sale contract.
The appellate court confirmed the enforceability of the claim based on the unilateral rescission notice and held that the defendant was put in default when this notification was sent. Additionally, the court acknowledged that a lawsuit for the recovery of the €560,000 was already pending before the Bistrița-Năsăud Tribunal.
Regarding the security deposit, the court found that it was within the court’s discretion under Article 953(1) of the Civil Procedure Code, and given the nature of the case, it was unnecessary to require the claimant to pay a deposit.
Thus, the Cluj Court of Appeal allowed the appeal, ordering:
- Precautionary seizure of all the defendant’s movable and immovable assets.
- Garnishment on the defendant’s bank account balances and future income.
As a result of this favorable ruling, the claimant, represented by Brisc Legal attorneys, successfully enforced the protective measures, freezing the debtor’s bank accounts and securing an attachment on the debtor’s real estate property, thereby preventing its potential sale.