Irish & German Law on Enforcement of Judgements

GERMAN LAW

1.1. execution of judgement in general
The execution of judgement which is found in §§ 803ff. of the Rules of Civil Procedure (Zivilprozeßordnung- ZPO) is a public method used for pushing private claims through and is carried out by state organs who act at the request of the Titelinhaber (bearer of a public document- the title of execution) against the opponent. In this case the state organs act sovereign but the bearer of the title has a right to get the execution of judgement enforced.

A bearer of a Vollstreckungstitel (title of execution) is every person who possesses a public document (a document issued by a public authority) which entitles to issue execution against the opponent (e.g. final decree/ judgement). Before issuing execution it is necessary that the public document is provided with a court certificate of enforceability, a Vollstreckungsklausel (writ of execution) and is served to the debtor. Because an enforcement of the judgement without the Vollstreckungsklausel (writ of execution) is not possible, the writ of execution is used for the protection of the debtor, accordingly.
Also the Vollstreckungsklausel is useful for the Vollstreckungsorgan (state organ which enforces the judgement- mostly the sheriff) which is not allowed to examine if the goods at the debtors premises belong to the debtors property. Because of the reason that the Vollstreckungsorgan is only allowed to ascertain if the goods are in the safekeeping of the debtor and not to ascertain if the goods belong to the debtor the writ of execution is also used for the protection of the Vollstreckungsorgan. With the writ of execution on the title of execution the Vollstreckungsorgan can then seize all moveable goods on the debtors premises, subject only to the limitation of the goods mentioned in §§ 811 ff. ZPO.
The execution of judgement then begins with the first act of enforcement carried out by the state organ, mostly the sheriff’s officer.

1.1.1. general enforcement because of outstanding debt by seizing moveable goods
When considering general execution because of outstanding debt it has to be distinguished between personal property and demands or other pecuniary rights.
The title contains an outstanding debt if it is directed to a payment or if it orders the acquiescence of the execution because of outstanding debt.
The execution of judgement is carried out by seizing the moveable goods which the debtor has in safekeeping. These seized goods are then utilised for discharging the debt. In this connection it is necessary that only the debtor has the seized goods in safekeeping. If another person also has safekeeping on the goods this person has to agree with the seizure.
In this situation an exception exists with spouses only (§ 739 (1) ZPO) and with registered relationships of the same sex (§ 739 (2) ZPO), after which the debtor is – within the framework of § 1362 Bürgerliches Gesetzbuch (Civil Code) and § 8 (1) Lebenspartnerschaftsgesetz (statute for the registration of a relationship of the same sex) – treated independent from the real safekeeping position as an exclusive safekeeper which means that the co- care or safekeeping of the other spouse doesn’t conflict with the seizure.

1.1.2. other types of enforcement of judgement
The other sorts of enforcement of judgement which, here however is not gone into are the enforcement because of pecuniary claims in the non- moveable property (forced sale) after §§ 864 ff., the official administration after § 869 ZPO, the entry of constraint mortgages after §§ 866 ff., the enforcement to obtain the giving up of possession of moveable goods and to obtain acts or omissions after §§ 883-898 ZPO, as well as the conviction to make declarations of intention after § 894 ZPO.

1.2. affirmation in lieu of an oath (affidavit)

1.2.1. prerequisites
In case of the execution because of pecuniary claims after § 807 paragraphs 1 ZPO the debtor in certain cases has to submit a property catalogue and to insure its accuracy by making an assurance/ affirmation in lieu of an oath (affidavit) (cf §§ 899 ff. ZPO).
This is the case,
– if the execution because of pecuniary claims in the mobile property remained unsuccessful or is presumably going to be unsuccessful and this must be proved by filing a “Fruchtlosigkeitsbescheinigung” (ineffectiveness certificate, issued by the bailiff) by the creditor;
– if the debtor has refused to allow the search for attachable goods in his house;
– if the bailiff has not found the debtor in his house repeatedly in spite of advance notices.

As far as the execution refers to the giving up of possession of moveable goods, the debtor has to give assurance that he isn’t in the possession of these goods and also that he doesn’t know where these goods are.
The obligation of the debtor also applies to inform the creditor about a distrained and transferred demand.
1.2.2. procedure
Responsible for the decline of the affirmation in lieu of an oath is the bailiff at the district court in whose district the debtor has his (its) domicile or his (its) place of residence in the moment of instructing the sheriff. The procedure begins with an order of the creditor to determine an appointment for the making of the assurance in lieu of an oath. The bailiff then checks the general validity of the execution and above mentioned presuppositions re the making of the assurance in lieu of an oath and sets an appointment. As far as the presuppositions are not present, the bailiff rejects the application of the creditor.
Then the appointment for making the assurance in lieu of an oath follows and, as far as the debtor appears and is ready to make the assurance in lieu of an oath, the property catalogue is constructed. Herewith the execution against the debtor is concluded in this respect, in that it is then clarified which property or goods the debtor possesses and which other liabilities and debts exist.

1.2.3. warrant
As far as the debtor does not appear at the appointment for making the assurance in lieu of an oath or refuses, however, the making of the assurance in lieu of an oath either without a reason or with inconclusive information, the enforcement judge (not the bailiff!!) – again at the request of the creditor- remits a warrant of arrest against the debtor. The arrest takes place by the bailiff and is used as a Beugemittel (measure to enforce compliance with court orders or disciplinary means of coercion) for the making of the assurance in lieu of an oath. The warrant of arrest also contains the permission to enter the debtors house compulsorily and to search for him. If the debtor in spite of the arrest does not make the assurance in lieu of an oath, he is taken into custody. This can continue up to 6 months but be finished at any time by the debtor by giving an assurance in lieu of an oath.

1.2.4. result
As a result of the procedure to get an affirmation in lieu of an oath or respectively the possibly obtained warrant of arrest the debtor is put down on the Schuldnerverzeichnis (debtor’s catalogue) from which under certain presuppositions information may be given. The making of the assurance in lieu of an oath, as well as the decree of a warrant of arrest and the possibly following arrest and imprisonment of the debtor do not guarantee that the creditor gets his demands paid. Moreover, these procedures have substantial expenses which the creditor must pay for the agency of the bailiff among other things (of course these costs can also be demanded back by the debtor which mostly fails in such cases because of the fact that the debtor has no possibility to pay back the demanded sum).

IRISH LAW

2.1. Execution of judgement in general

Under Irish law just as in German law, in order to enforce a judgement and instruct the sheriff to seize moveable goods from the debtors premises it is necessary to obtain a title of execution (e.g. Decree) against the debtor. This means that the creditor has to obtain a judgement against the debtor which should be served upon the debtor before enforcing it. Therefore the usual steps to institute court proceedings have to be initialised. The enforcement of judgements then goes by the Order 53- Enforcement of Judgements, Enforcement of Court Orders Act, 1926 (No. 18 of 1926), Enforcement of Court Orders Act 1940 (No. 23 of 1940), the Courts (No.2) Act, 1986 (No. 26 of 1986).
The procedure prior to the enforcement of judgement is called debt collection which essentially consists of a written demand to the debtor to pay his debt and if this is unsuccessful to institute court proceedings in order to obtain and then enforce a court judgement.

2.2. Sheriffs Power of Seizure
The execution of judgement is carried out by seizing the debtors moveable goods. For this the sheriff can seize all the debtors moveable goods such as household, furniture, horses, cattle etc. subject to the limitation that the sheriff may only seize such goods belonging to the debtors property (not such goods which are only in the debtors safekeeping). Therefore seizing often remains unsuccessful.
The sheriff has the power to break into premises and no action shall be taken against him (once he makes reasonable efforts to enter without violence).
He may sell goods seized at any time after expiration of 48 hours from seizure and may sell by Auction, Tender or Private Proposal.
Where a sheriff has seized goods belonging to the property of a third party, this party can claim against the Sheriff just as in German law (third party action against execution- Drittwiderspruchsklage or objections against the execution- Vollstreckungserinnerung). To defend the Third Party claim, the Sheriff may issue Interpleader Proceedings.
If the Sheriff isn’t successful in seizing goods at the debtors premises, he then returns the Decree which was forwarded to him to the creditor with “nulla bona” endorsed upon it. This means that the Sheriff has not been able to find any goods worth seizing in order to discharge the debt at the debtors premises and that after several visits paid to the premises in question it was clear that this debtor possessed no goods worth seizing.The alternatives then available are as follows:

2.2.1. Publishing the Judgement in trade journals
The Judgement may be published in trade journals such as Stubbs and the The Experian Gazette at a nominal cost.

2.2.2. Judgement Mortgage

The judgement mortgage is one of the most useful ways to enforce a judgement debt. Under this procedure a judgment can be registered as a mortgage against any registered or unregistered property belonging to a judgement debtor in Ireland. The registration of a judgement mortgage will secure the judgment debt on the debtor’s property and obtain a measure of priority over unsecured creditors.

A judgment creditor can enforce the security afforded by the registration of his judgment mortgage by applying to the court for a ‘Well Charging Order’ (an order for payment of the amount found to be due to him on foot of the judgment mortgage) within a specified time and an ‘Order for Sale’ in the event of default in payment. A creditor must enforce a judgment mortgage within 12 years of obtaining a judgment in the case of an ordinary person or 30 years where the judgment debtor is a state body.

The Land and Conveyancing Law Reform Act 2009 (the 2009 Act) has introduced some significant amendments in the area of judgment mortgages. The 2009 Act has improved the likelihood of a judgment creditor being afforded a remedy on foot of the registration of a judgment mortgage by introducing a range of orders which can be made by the court on application of the judgment creditor.

This method of enforcing the security is effective. Duncan Grehan & Partners are experienced in this area of the law and advise regularly on the practice and procedure involved. Please contact us if you require further advice regarding judgment mortgages.

For additional information regarding some of the changes introduced by the 2009 Act please click here

 2.2.3. Bankruptcy/ Liquidation
The third method is to institute bankruptcy procedures preceded by a warning letter. Because of the high cost, these proceedings should be instituted only if there is a very high amount of outstanding debt. However, a letter threatening same may have some effect.
Bankruptcy is a procedure available only against Debtors who are individuals. A procedure similar to bankruptcy is liquidation, the difference being that liquidation is only available against limited companies. The object of both bankruptcy and liquidation is namely, to hand over assets, liabilities and affairs of the bankrupt to a trustee or assignee for the purposes of realising the bankrupt’s assets and then distributing the proceeds of sale amongst the creditors.

2.2.4. Examination Order/ Committal Proceedings
Comparable to the proceedings of an affirmation in lieu of an oath (affidavit) according to German law the debtor will be required to file a statement of means in court and appear before the court for cross examination by a Judge. For this reason this procedure is available against individuals only. The Judge will then make an Order requiring the debtor to pay in instalments usually of a nominal sum such as € 10.00 per week.
The difference between the proceedings of Examination Order and the proceedings of an affirmation in lieu of an oath is that there is no Order requiring the debtor to pay instalments according to German law, because neither a Judge nor the creditor are involved in the proceedings of an affirmation in lieu of an oath. Only the Gerichtsvollzieher (sheriff) will be instructed (by the creditor) to draw up a Vermögensverzeichnis (schedule of property) together with the debtor which will then be send to the creditor for further proceedings.

If the Debtor fails to pay the instalments due, you can apply for a Committal Order, for a maximum period of 3 months. This is a Court Order, committing the Debtor to prison for failure to discharge outstanding instalments, which is also different to German law. According to Irish law committal proceedings can only be instituted if the debtor fails to pay the instalments. The debtor may also be arrested to attend at the court for the Examination Order which is of course not comparable to the possibility of obtaining a warrant against the debtor according to German law.
To issue and serve the Examination Order and to attend in court will involve solicitors costs and outlays.

We would like to thank our German trainee lawyer, Sascha Wollersheim for his research on this topic.