A favourable verdict by the District Court in Legnica
The District Court in Legnica issued a verdict regarding action pauliana in favour of our law firm’s client and found, that a fiduciary transfer of a real property ownership as a security of a loan agreement is a gratuitous act unless the contract states otherwise. Such standpoint supports the dominating standpoint in the Supreme Court’s jurisprudence, which was initiated by the Supreme Court’s verdict of 24th September 2015, V CSK 667/14.
The abovementioned verdict was issued in a case in which our Client initiated enforcement proceedings against his debtor. However, a few days earlier the debtor had entered into a loan agreement which had been secured by a fiduciary transfer of ownership of a real property. The transferee claimed that he had no knowledge of his contractor’s debts. Nevertheless, the District Court in Legnica ruled that in such situation the matter of bad or good faith of the real property’s transferee is irrelevant on grounds of Article 528 of the Polish Civil Code.
The District Court stated that a security transfer of ownership agreement – an example of a fiduciary deed – has a character of a nude contract. As a result, on grounds of the actio Pauliana regulations the transferee’s state of awareness is virtually irrelevant and the creditor can proceed with the real property enforcement proceedings regardless of the fact whether the debtor entered into a security transfer of ownership agreement or whether the transferee did or did not know about the debtor’s financial problems.
The abovementioned verdict rules accordingly to the consolidated line of Supreme Court’s and common courts’ jurisprudence and should be pointed out as a warning sign for all transactions, in which the Parties decide to resign from physical collateral (e.g. mortgage or registered pledge) and apply a security transfer of ownership instead.
The case was led by advocate Miłosz Tatarczuch from MyLo law firm.