The view expressed by the Poznań District Court that being a member of the debtor's family does not always mean having a close relationship with him, within the meaning of Article 527(3k).c. and does not give rise to the presumption that a family member is aware of the injury to creditors, which is a condition for handling a Paulian complaint.
On 9 October 2018 District Court in Poznań, XIV Civil Division based in Pile, on the signature of Act XIV C 592/17, dismissed the action for declaring the legal act unsuccessful, brought by the Treasury, represented by the Chief of the Tax Office.
Disposal of property to a relative and receivables
In the present case, the contested legal action was a sales contract concluded in the form of a notarial act whereby the cooperative property right to a dwelling was sold. Importantly, the defendant in the case was the cousin of the seller.
As per content Article 527(1) c. where, as a result of a legal act of the debtor, a person has been injured by the creditor third has obtained a property benefit, each creditor may demand that this act be regarded as ineffective in relation to him if the debtor acted with the awareness of injury to the creditors
It is also worth noting that the subject of the protection was a public liability for income tax and tax on goods and services. It is clear now that the institution of the Paulian complaint may apply by analogy to the protection of tax claims. (SN statement dated 27 October 2010, II CSK 227/10). Order dated 2 March 2018, IV CSK 441/17 The Supreme Court reiterated its position, stating that the Paulian complaint also serves to protect public claims.
Dismissal of the action in the case occurred with two fundamental reasons. After first the court has indicated that the provision Article 527 k.c. it is clear that the Paulian claim is only valid if the debtor acted with the awareness of injury to creditors (e.g. SA in Warsaw with 11 October 2017 V ACa 100/17, L.).
Such awareness accompanies the debtor when he realizes that he may be unable to satisfy creditors with his assets as a result of his legal activity. On the other hand, the Court of First Instance held that, in the case at issue, it was impossible for the debtor to be aware that, when selling to the defendant, he would harm the plaintiff.
In fact, the sale contract was concluded on 14 June 2012, However, the audit procedure was initiated only on the day of the decision of the Director of the Tax Office 26 April 2013 The claimant’s claim against the debtor was not known until the defendant had been served.
Closeness ratio and Paulian complaint
In the present case, it was also important that the debtor and the defendant had a family relationship – the defendant was the debtor's aunt's brother. However, the Court of First Instance held that it was difficult to accept that there was a relationship of closeness between the persons mentioned above Article 527(3) k.c.
The defendant's testimony, as well as the witnesses questioned, including the debtor, indicated that the defendant's contacts with the debtor were sporadic and only at larger family ceremonies, not more than once two twice a year.
As per content Article 527(1) c.
where, as a result of a legal act of the debtor, a person has injured the creditors third has obtained a property benefit, each creditor may demand that this act be regarded as ineffective in relation to him if the debtor acted with the awareness of injury to the creditors and the person third She knew this or could have known it with due care.
By section 2 that provision, the legal act of the debtor shall be detrimental to creditors if, as a result of that act, the debtor has become insolvent or has become insolvent to a higher degree than it had been before the act.
Further – according to content section 3 the referenced provision if, as a result of the legal act of the debtor with the injured creditors, the person in close relationship with him is presumed to have known that the debtor acted with the awareness of the injured creditors.
The grounds for the Paulian complaint
It follows from this provision that, in order to grant the creditor protection based on the institution of the Paulian action, the following cumulative conditions must be fulfilled:
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- the existence of a claim;
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- act with a person third;
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- to act with the detriment of creditors;
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- the personal gain third;
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- acting with awareness of the injury to creditors;
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Person action third in bad faith.
The existence of the above conditions renders the debtor’s legal action ineffective with regard to the creditor (relative ineffectiveness) and the Court of First Instance’s decision in a constitutional manner in proceedings brought against the person third, with which the debtor has acted, or by way of a charge raised against that person.
Author: Michał Wasilenko
Lawyer, Associate in the Legal Department, member of the Bar Association in Lublin, graduate of the Faculty of Law and Administration at Maria Curie-Skłodowska University in Lublin. He specializes in commercial and civil law law.