Success in Court Proceedings

Robert Němec’s team, led by Lenka Konvalinová, successfully represented the complainant in Constitutional Court proceedings that contested an order to reimburse the costs of execution proceedings as well as the confirmatory resolution of the district court. The controversial issue in these proceedings was whether the obligor’s depositing of the principal gave rise, in accordance with Section 54(5) of Act No. 120/2001 Coll., on Court Executors and Enforcement Activities (Execution Procedure Code) and on Amendments to Other Acts (the “EPC”), to the same consequences, in terms of execution costs, as in the case of Section 44a(2) of the EPC.

In the case at hand the complainant – in response to the executor’s request for payment of outstanding performance – deposited in the executor’s account the payment for the recovered claim (principal), the costs of the execution as well as the costs of the entitled party. Subsequently, an execution order was issued in which the execution costs and the executor’s remuneration were calculated as half of the original amount, due to the fulfilments of the obligor under Section 44a(2) of the EPC. But according to the executor, the nature of the principal had changed once the complainant filed a motion to postpone and discontinue the execution proceedings because the complainant disputed the enforceability of the execution title as a circumstance decisive for the execution to be carried out. The executor and the execution court maintained that, by submitting a motion to postpone and discontinue the execution proceedings, the qualification of the reason for which the obligor deposited the outstanding amount to the executor’s account changed, and as a result the executor was entitled to calculate the execution costs.

In the reasoning of the judgment, the Constitutional Court first of all reminded that the executor’s remuneration should reflect the complexity, responsibility and effort of the execution activity. In this specific situation, the debtor had fulfilled its obligation and as a result of the execution the creditor had a guarantee that its claims would be satisfied if the legal title were recognized as lawful. To the complainant’s favour, the Constitutional Court stated that, regarding the execution costs, it is essential that the composition of the executed amount greatly simplifies the work of the executor, who already received a reasonable amount of remuneration and did not have to carry out any other activities related to the execution. If additional costs had been incurred by the participants in connection with filing the obligor’s motion to postpone and discontinue the execution proceedings, there would have been nothing to prevent the executor from claiming these costs from the obligor.

Since the interpretation carried out by the state authorities failed to respect the fundamental rights and freedoms of the complainant, the Constitutional Court found that both the order to reimburse the costs of the execution proceedings and the confirmatory resolution of the district court infringed on the complainant’s property rights guaranteed under Article 11(1) as well as on the complainant’s right to a fair trial guaranteed under Article 36(1) of the Charter of Fundamental Rights and Freedoms. The Constitutional Court annulled the decisions contested in the constitutional complaint.