March 10, 2016

Nowadays, you can hear the statement “I was convicted without knowing” more and more often. The truth is that the current law actually allows a debtor to be convicted quite easily and quickly. However, the problem in this field arises neither from legal possibilities, provided by way of an order for payment proceedings, nor from short preclusive terms, but mainly from the difficulties resulting from the issue regarding serving judicial documents in relation to cases.

Pursuant to Article 38 of the Civil Procedure Code, notices on serving judicial documents in relation to a case of a natural person shall be served at the address specified by the claimant, and where the addressee cannot be found there – at his/her current or permanent address.

Legal provisions in relation to legal entities are quite clear and definite. A legal entity may be served a summons only at its last address entered in the Commercial Register. If the merchant has left its address or moved to another place without, however, entering this information in the Register, it is not a basis on which serving judicial documents shall be done on another address. The principle of absence of registered data in the Commercial Register shall apply, namely – circumstances, which are not submitted to the Register, are considered to be unknown to any third parties.

In view of this, it may turn out that a company, which has moved its business to another place, continues to receive its correspondence at its previous address. Certainly, there is also a possibility that the merchant continues to reside at its address, but no notice has been served on the same for objective reasons, for example, broken doorbell, locked front door, an absence of a representative of the company at a given time and the like. It is also likely that the representatives of the company are intentionally hiding.

All the above determine the need of clear and definitive rules for the service of summonses and serving judicial documents on legal entities, as well as specific criteria for the matter in which cases it can be assumed that documents and summonses are duly served and, accordingly, the proceedings may continue without this subsequently becomes a prerequisite for the revocation of a judicial act or performed procedural action.

A well-known legal principle is that the law treats merchants as professionals. This also means, respectively, that it applies more strictly to them and does not allow deviations from established rules.

A legal procedure, in which the process-server has found that the legal entity does not reside at the address indicated in the Commercial Register, shall be considered complied with provided that the process-server has answered to a few basic questions, namely:

  1. whether there is a sign-plate containing the firm or business name of the legal entity at the registered address of the same;
  2. whether business hours or hours of service are indicated at the address;
  3. are their premises in the building at which the merchant resides; are there any of its representatives,  hired workers, and employees.

The process-server should collect information from the residents of the building as well. The following questions should be answered – whether a merchant conducting business under that business name is known at that place and whether anyone is familiar at all with a legal entity with such a name; has such company ever resided at the address or its representatives or employees, and if possible to be specified when. It is required to record the exact persons with which the process-server has talked, how they have obtained the information; how the process-server has collected the information and under what conditions.

According to the case-law, in order for the process-server to ascertain that the respective legal entity is not at the designated place, he/she should have made effort to find it at an appropriate time. Pursuant to Decision No. 85 of 30 March 2015 on civil case No. 4750/2014, Panel of Civil Judges, 4th Civil Division of the Supreme Court of Cassation /rendered pursuant to Article 290 of the Civil Procedure Code/ „The CPC provides for a visit from a process-server to the registered address of the merchant on a working day and within standard working hours (if such is not indicated at the address), as well as long-repeated (rather than  accidental) lack of access to the office or failure to find a person willing to receive the notice at such place.”

Therefore, the process-server shall also indicate in the receipt to the summons the time of his/her visit at the address, as well as provide evidence for the existence of a permanent lack of access to the office of the legal entity, rather than an accidental absence of its representative. It shall be noted how many times the merchant has been sought – there must be at least two or three visits to the address within a period of more than one month.

All circumstances specified above must appear on the receipt for the service of documents in relation to a case. The lack of any of them compromises the service procedure and therefore creates a prerequisite to being assumed that a party to the case has not been duly served. Only if there is a cumulative presence of all listed prerequisites, the court may conclude that the person could not be found at the address, for reasons not related to random circumstances, and proceed to post a notice pursuant to Article 50 of the CPC.

The main prerequisites for posting a notice on these grounds are two, namely:

  1. the defendant could not be found at the address specified in the case documents or does not reside there or because the same is hiding
  2. finding a person willing to receive the notice – a representative and an employee of the company – is not possible.

Only when all conditions specified above are met and after the expiry of the period indicated in the posted notice, the court may assume that the serving judicial documents is duly done and may be enclosed to the case.

The circumstances, which are not of extraordinary nature, due to which a proper access to the merchant’s premises has not been provided to the process-server, shall not constitute grounds for non-recognition of the fact that the service has been duly performed.

In all other cases in which the existence of such unpredictable and compelling circumstances cannot be proved, it can be assumed that the serving judicial documents are duly performed and the merchant has personally put itself in a disadvantageous position, failing to comply with its legal obligation to ensure access to its office.

It carries a great risk for the company. In accordance with Article 410 or Article 417 of the CPC, a pretended lender, having information about the merchant, could easily obtain a warrant of execution and a writ of execution and initiate enforcement proceedings against the company. Due to the inability to have access to the office of the legal person and failure to find its representatives, the service of documents in relation to the enforcement proceedings shall also be considered duly performed, and hence all enforcement activities will be carried out in accordance with the law. As a result, it may be found that the company’s bank accounts are attached and its movable and immovable property is subject to a public sale. In such cases, the merchant would hardly manage to cope with the situation in comparison with a natural person.

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