The execution of the Judicial Decisions of the Cypriot Courts is undoubtedly one of the major and long-standing problems of justice in Cyprus that concerns the Courts, the Lawyers and the citizens who are directly concerned, as there are countless cases where a citizen, after a long legal battle, secures a Judgment in his favor, but this is not “executed” either because the debtor by decision refuses and neglects to pay his debt resulting from the Decision or is generally and vaguely claiming financial difficulties.

As stated by the Supreme Court in the judgement National Bank of Greek A.E. v. Konstantinou (2000) 1 (Β) Α.Α.Δ. 1034, 1038 (in our own free translation) “The execution of judicial decisions is an element directly concluded with the validity of the judicial process. The credibility of justice depends on its effectiveness. Otherwise, mistrust is created for its mission with similar corrosive effects.” Equally settled are the jurisprudential principles according to which the recognition of the validity and enforcement of judicial decisions are top issues of public interest for which it is essential to uphold public confidence that judicial processes are effective and that justice is not administered in vain.

Legislative arsenal regarding the means of execution of a Judicial Decision of a Civil Court (i.e. not criminal or other special jurisdiction) is the Civil Procedure Law, Chapter 6 (hereinafter referred to as ‘Ch. 6’) as amended to date, which includes the filing of a relevant application by summons filed by the judgement creditor or his lawyers before the Court, by which the judgment debtor is summoned to appear before the Court and be examined, giving substantiated evidence and providing all necessary information regarding his financial circumstances. In particular, the purpose of Part VIII of Cap. 6 is to secure the enforcement of court judgments, a matter that is fundamental to the effective administration of justice.

In order to facilitate a clearer understanding of the nature of an examination / financial inquiry application and the reasoning applied by the Court in such matters, we consider it appropriate to set out at the outset the relevant legal aspect of the case, with reference to the applicable statutory provisions and to the pertinent case law on the subject as established by the decisions of the Courts.

Pursuant to Section 14 of Chapter 6, a judicial order or judgment directing the payment of money may, subject to the provisions of Chapter 6, be enforced, among other methods, by the examination of the judgment debtor under Part VIII (see Section 14(1)(e)) and by the issuance of an order under Part IX. As has been held in case law, the procedure of applying 2 for an examination of the debtor’s financial affairs is of an investigative nature¹. Section 85 permits the examination of the judgment debtor and witnesses, under oath or by another acceptable means, even in the absence of the debtor².

Caselaw³ confirms that the burden of proof for the debtor’s financial capacity rests upon the debtor. The debtor is obliged to make full disclosure of their assets so that their ability to satisfy the debt can be assessed, or so that a monthly payment amount can be determined. The judgment creditor cannot be expected to know the debtor’s assets, which may justify the issuance of an order for payment of the judgment debt in instalments. Regarding the powers of the Court in such Applications, pursuant to Section 87(1) of Chapter 6, the Court may, following the examination of the debtor, issue, among other orders, an order for payment of the debt in monthly installments. The Supreme Court has repeatedly considered the application of this measure, particularly in relation to installment payment orders, emphasizing that the guiding criterion is to ensure that enforcement does not disrupt the debtor’s and their family’s accepted standard of living⁴. With respect to caselaw on this matter, as noted by the Supreme Court, the issuance of an order for the repayment of a judgment debt in installments is connected to the enforcement of court decisions, a factor that is directly tied to the integrity of the judicial process⁵. Naturally, beyond the integrity of the judicial process, the Court, in exercising its discretionary powers, must also take into account the need for the debtor to maintain a dignified standard of living⁶.

In cases where the application concerns an individual, the Court takes into account the debtor’s salary and/or other income, as well as their personal and family needs, and orders the payment of an amount representing the surplus of income after deducting a reasonable and necessary sum for the maintenance of the debtor and his dependents.

With respect to determining the debtor’s financial capacity, caselaw provides that the needs of the debtor and their dependents are to be considered, including housing, food, medical care, children’s education, and the debtor’s ability to meet regular financial obligations⁷. In determining the debtor’s financial standing, account shall be taken, in accordance with the caselaw, of the needs of the debtor and his dependants regarding housing, nutrition, medical care, education of children and financial mobility of the debtor⁸.

According to caselaw, in determining the amount of a monthly installment, the Court takes into account, among other factors, the total amount of the debt in relation to the time required for its repayment through the proposed monthly installments⁹. Expenses related to the consumption of tobacco and alcohol, as well as expenditures on entertainment, cafés, and similar items, are not considered necessary expenses¹⁰. Furthermore, caselaw establishes that a debtor cannot create obligations beyond those necessary to meet the essential living needs of themselves and their family and then rely on such obligations as a justification for their inability or incapacity to repay the judgment debt¹¹.

It has also been established in caselaw that an order for payment in monthly instalments may be issued against a debtor even if they are unemployed, provided it is shown that the debtor has the capacity for gainful employment but chooses not to work. This principle has been recently confirmed by the Supreme Court¹².

Subsequently, once it has been determined that the debtor is capable of repaying the debt, the Court proceeds to precisely determine the amount to be paid on a monthly basis.

Finally, it should be noted that following the issuance of an order for the payment of a judgment debt in installments, the provisions of Sections 91A(3) and 91B(3)(b) of Chapter 6 apply, which provide that the failure to pay any installment constitutes an act of fraud, considered a criminal offence. Under Section 91B(1) of Chapter 6, a judgment debtor who commits such an act may be punished with imprisonment for up to twelve months and/or a fine of up to £1,000 (€1,707.60), without prejudice to the powers of the Court to issue any order under Chapter 6 or any other law. It is clarified that the above provisions are statutory in nature and do not affect the constitutionally guaranteed presumption of innocence of any individual.

Demetrios Chrysanthou

The information contained in this article is provided for general informational purposes only and should not be construed as legal advice. The content of this article does not create a lawyer–client relationship and does not constitute legal advice or an opinion regarding any specific case. For specialized legal guidance, it is recommended to consult a qualified lawyer.

¹ Gesico Photographics Ltd v. JK. Video Art Co. Ltd, (1991) 1 A.A.Δ. 134 and Flangophas v.
Ataleza Ltd, (1989) 1 (E) A.D. 686).
² Michael, et al. v. Poullou Brothers Ltd, (1997) 1 A.A.D. 1759)
³ Vassiliadis v. Tsouris, (2007) 1A A.A.D. 43
⁴ Flangophas v. Ataleza Ltd, (1989) 1(E) A.D. 686
⁵ National Bank of Greece v. Konstantinou (2000) 1 A.A.D. 1034
⁶ Nitsa Christaki or Pagonitsa Christaki Panagiotou v. Maro Michael (1998) 1 A.A.D. 422
⁷ Gesico Photographic v. J.K. Video (1991) 1 Α.Α.Δ. 134
⁸ Michael v. Laiki Bank (Financing) Ltd (1993) 1 A.A.D. 812
⁹ National Bank of Greece v. Nicos Trihinas (1976) J.S.C 411
¹⁰ Soteriades v. Koutsiou (1970) 1 CLR 25 και Chrysostomou v Athanasiou (1981) 1 C.L.R. 669
¹¹ Anestos Adamou Kokoni v Xenophon Ioannides (1963) C.L.R. 468 και Σ.Π.Ε. Αραδίππου v Έλλη
Ιακώβου (1999) 1 ΑΑΔ 2032.
¹² Sotiriou v. Universal Bank Public Ltd, Civil Proc. 271/2013, d. 9.3.2020