On 8 January 2018 The Supreme Court has issued an interesting judgment on the crime of fraud occurring in Article 286(1) kk (II KK) 259/17.
The ease of obtaining a payment order cannot go hand-in-hand with the lack of examination of the grounds for issuing it, as this may be the beginning of problems of a reliable entrepreneur who may be the victim of a fraud who holds a ruling issued on behalf of the Republic of Poland.
The Supreme Court stated that in the case of an invoice order which does not document actual economic events, the person issuing it may commit a so-called ‘trial fraud’.
Too short a deadline to raise objections
The judgment in question was given in the following facts. Company X concluded an agreement with Company Y. This agreement was terminated by Y because it did not comply with its provisions.
But after that, 9 months after Y’s termination of the contract one of the members of the Management Board of Company X issued a VAT invoice documenting the allegedly works performed, representing the amount 240,000 PLN.
Shortly after the invoice was issued, a registered letter was sent to Y, which was de facto only an empty envelope sent to the company's address. Company X then applied to the court for a payment order.
On the basis of the annexes to the application submitted by Company X, the court issued a order for payment and ordered Y to pay or to object within the time limit 14 days. Y did not raise any objections within the time limit due to irregularities within the company.
After verification of the documents, Company Y established that the invoice issued by Company X had been wrongly issued and for this reason it was decided to apply for the restoration of the deadline for objecting and a notification of the offence was made by the person issuing the VAT invoice.
Y failed to restore the deadline for objecting to the order for payment.
Eventually, she filed a subsidiary indictment against a member of the board of directors of Company X, in which she accused him of having since 19 August to 8 October 2013, acting jointly and in agreement with another person in order to obtain the property benefit, as Vice President of the Management Board of X Sp. z o.
o., he misled the district court in [...] by filing a lawsuit for payment 240,000 PLN v Y Sp. z o.o., joined by an invoice confirming false circumstances, dated on 21 March 2012, which led to an adverse regulation by the defendant by issuing a order for payment, i.e. offences with Article 286(1) ed. Article 294(1) k.k.
Grounds for prosecution of trial fraud
The Court of First Instance found the President of Company X guilty and sentenced him to a year of imprisonment which he suspended conditionally for a trial period of 5 years and fines. After examining the appeal of the defense attorney and the district prosecutor who brought the appeal in favour of the defendant, the court of the second instance issued an acquittal. Judgment of the Court of First Instance was abrogated by the Supreme Court.
The Supreme Court did not agree that the dispute which was raised by the issuing of the VAT invoice "should be settled in civil proceedings rather than in criminal proceedings". In favour of this, he spoke a number of circumstances which should be examined before the judgment was given in the course of the appeal procedure.
This concerns the verification of Y’s claims that Company X did not carry out any activities, the presentation of documents proving the execution of works, the absence of any activity to determine why the contested invoice included an amount of such an amount, and the omission of sending an empty envelope to Company Y.
All these circumstances entitle the Supreme Court to conclude that there were grounds for attributing the so-called procedural fraud to the defendant in the case in question. The Supreme Court noted that it should be "discussed to the misconception of the inability to attribute procedural fraud in the event that some of the civil claims in question are justified or otherwise justified."
Doors in law used by unfair counterparties
In commenting on the Supreme Court's ruling, attention should be paid to a kind of civil court practice that can be used by unfair contractors. Namely, the courts are limited to examining the formal requirements of the lawsuit before issuing the order for payment, so that they briefly examine the material conditions for issuing it.
As shown by the example of the case in question to issue a payment order for the amount of 240,000 PLN only the VAT invoice issued in accordance with the provisions of the Act was sufficient. The courts assume that any irregularities will be raised by the defendant in a possible objection.
The time limit for its transfer shall be 14 days, which may sometimes be too short.
The ease of obtaining a payment order cannot go hand-in-hand with the lack of examination of the grounds for issuing it, as this may be the beginning of problems of a reliable entrepreneur who may be the victim of a fraud who holds a ruling issued on behalf of the Republic of Poland.