The Supreme Court of Cassation ordered the entry of a court resolution in favour of the debtor, after he himself had been inactive.
The case was viewed after a refusal to enter a resolution by a registry judge and a subsequent one by the Sofia City Court. The resolution announced a preliminary contract as final at the request of the debtor.
The registry judge refused the entry on the grounds that the proceedings have not been initiated by a person with a legal interest and that the debtor is entitled to request entry of the in-force resolution within a six months term. The creditor appealed before the Sofia City Court.
Sofia City Court, for its part, interpreting the norm of Article 115, paragraph 2 of the Property Act, which sets a six-month period for the plaintiff to request the entry, decrees:
“These court resolutions under Article 19, paragraph 3 of the Contracts and Obligations Act, are subject to entry, as on the grounds of Article 115, paragraph 2 in conjunction with Article 114, letter b of the Property Act, the court shall give the plaintiff six months to make this entry, and after the expiration of this period the entry of the claim shall cease to have effect. Thus, the law explicitly indicates the person who can duly initiate the entry of the in-force court resolution, which upheld a claim under Article 19, paragraph 3 of the Contracts and Obligations Act. At the same time, the applicant is not a plaintiff in the proceedings under Article 19, paragraph 3 of the Contracts and Obligations Act.”
The creditor has argued that he has an interest in initiating proceedings for entry of an in-force court resolution, which upheld the claim with legal grounds Article 19, paragraph 3 of the Contracts and Obligations Act, as he has the quality of a creditor of the plaintiff, and his inaction threatens his interests in the enforcement proceedings. Sofia City Court stated regarding the creditor’s arguments:
“At the same time, if the exercise of the debtor’s right does not consist in filing a claim, as is the case under consideration, the creditor, in order to perform the action, must be authorized by the court under a secure claim proceeding, pursuant to Article 134, paragraph 3 of the Contracts and Obligations . There is no legal possibility within the security proceedings for entry of the in-force court resolution, which upheld the request under Article 19, paragraph 3 of the Contracts and Obligations Act, the registry judge to assess the legal interest of the applicant on his claimed grounds, in the absence of express authorization by the court to initiate such proceedings.”
With Order № 147/10.09.2020, under private court case № 147/2020, first civil division, the Supreme Court of Cassation categorically states that:
“The current panel accepts the conclusion that any person who has a legal interest may initiate the entry in the Real Estate Register of an in-force resolution on the grounds of Article 115, paragraph 2 of the Property Act and Article 14 of the Regulation on entries”
And supplements on the provision of Article 115, paragraph 2 of the Property Act that the addressee of the provision is the court that upholds the claim. The disposition of the provision stipulates an obligation for the court in the dispositive part of its resolution to instruct the plaintiff to enter the resolution within six months, as after the expiration of this period the entry of the claim loses its effect. As the Supreme Court of Cassation specifies that Article 115, paragraph 2 of the Property Act does not resolve at all the question whether another person is entitled to initiate the entry of the in-force resolution. The Supreme Court of Cassation also emphasizes that the existence of a legal interest should be assessed by the registry judge, and on the appeal against his refusal – by the district court, which views the appeal, as according to Article 278, paragraph 2 of the Civil Procedure Code, if the court annuls the appealed refusal, it decides the issue under the appeal regarding the existence of a legal interest in the person.