A CREDITOR may apply to court for the issue of a liquidation order against a company that does not comply with a demand notice to pay its debt. The notice of demand is served to the registered office of the company, through which the company is called to pay the debt within 21 days, and after the deadline passes without payment the creditor is entitled to file an application requesting dissolution of the company since it will be deemed unable to pay its debts.
Along with the affidavit supporting the application, the documents required are: a statement of account stating the debits and credits signed by the debtor company acknowledging the debt and/or by invoices issued and signed related to the account, the demand notice of payment, the certification of the service and the relevant publications in the official Gazette and a daily newspaper.
The court can then issue the order of liquation during a short trial, since the debtor company will be unable to bona fi de and substantially dispute the claim. Even if the company is proved to have the money to pay the debt but arbitrarily denies to make payment of it, the court has a duty to issue the order of liquidation. In a judgement issued earlier this month Judge Talaridou-Kontopoulou examined this issue as well as the issue whether the creditor proved suffi ciently that he was owed a specific and liquidated debt exceeding €5,000. The law provides that a document can be served to a company by leaving it or by posting it to the company’s registered office.
In this particular case, the court held there was service of the claim to the company’s registered offi ce which was received by a company employee.
Subsequently, the service of the application took place at the same address to the company’s director. The lawyers of the company without raising the issue of service notified that they will file an appearance in the procedure. The court, further stated, that the company retrospectively,
intentionally and abusively, having in mind that the application for liquidation was already filed, notified the Registrar of Companies that there was a change in the company’s registered office at a time prior to the service of the application.
The fact that the company did not raise at the appropriate time the issue of validity of service and at the same time it took action to change the address of its registered offi ce retrospectively, indicated that the company with its actions tried to avoid the service. Therefore, the service of
the claim as well as the service of the application at the company’s registered office must be deemed as good service. Therefore, it was held that the company took notice of the claim, as required by the personal right of every individual to know the reasons he is summoned before the court.
The court stated that the written notice of demand for a debt is not a judicial document, however, noncompliance with it gives rise to judicial procedures. Case-law suggests that a determinative element for the service to be set aside is the fi nding of the court that indeed the affected
litigant did not take notice of the procedure. In this case, such a fact was not proven, but to the contrary it was held that the company took notice and took actions with ulterior motives to abuse the valid service. With the existence of the debt and its nonpayment being proved and
with the fulfilment of the necessary requirements, the court issued the order for liquidation.