In a recent case, handled by our law firm, on behalf of a judgment creditor, the District Court of Limassol, upon the application of the judgment creditor – (and after a contested hearing) – issued an order extending the powers of an interim Receiver – (whose appointment was extended post-judgment) – for the sale of a Villa situated outside Cyprus, which was beneficially owned and substantially controlled by the judgment debtor through a network of a Cypriot and overseas companies in order to assist in the equitable execution the judgment against the judgment debtor.
While analyzing the power of the Court, the Judge stated that this power shall be exercised rarely and only in those cases where the execution of the decision is practically impossible via the conventional methods of execution. The Court in its decision adopted the above principle with reference to the book Commercial Injunctions of Steven Gee Q.C. where a special reference is made under the title «Appointment of Receiver by way of equitable execution». Namely the court quoted, inter alia, the following path:
“The legal theory was that a judgment creditor who wished to enforce his judgment against land of the debtor which could not be reached by legal execution, could obtain the assistance of equity to do this. This was not because the judgment gave him an "interest" in the land of the debtor; what he had was a right to be paid on the judgment and a need for the assistance of equity to obtain satisfaction of the judgment. The procedure was available because there was an impediment to execution being had at common law and an asset which could be realised through the appointment of a receiver.
That impediment had to be formally proved. The High Court of Chancery granted equitable relief so as to put the judgment creditor in the same position as if he had been able to proceed with legal execution….”
The Court adopted the principles set out in VB Football Assets (VBFA) v. Blackpool Football Club (Properties) Limited  EWHC 530 (Ch) and further stated that the appointment of a Receiver is not something usual and it is just and convenient to appoint a Receiver by way of equitable execution, when there are difficulties or impediments to the execution of the decision via the conventional methods of execution and appointing a receiver is the only realistic available solution for the judgment creditor. A receiver by way of equitable execution will not be appointed of the Court is satisfied that the appointment will be fruitless, for example because there is no property, which can be reached either by law or equity.
By adopting the above principles the Court granted powers to the Interim Receiver to proceed to evaluate a villa, situated outside Cyprus which was legally owned by a Cyprus company whose shares were beneficially owned by the judgment debtor, and also to sell same.
For further information on this topic please contact
Mrs. Anna Lamprou( email@example.com ) at SOTERIS PITTAS & CO LLC,
by telephone (+357 25 028460) or by fax (+357 25 028461)
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