Cyprus Mail
Property

Injunction prohibiting the sale of a property

law books
The injunction secures the future execution of a court judgment

When filing a lawsuit, a plaintiff can apply for an injunction to prohibit the defendant from the alienation or encumbrance of their immovable property under the law of equity. The purpose is the possibility of satisfying a court judgment that may be issued in favour of the plaintiff. This remedy is offered for a wide range of cases.

In order for the applicant to succeed, they must place before the court the facts and documents, as well as a valuation report for the property. Moreover, there is a legal principle that the applicant must disclose all the facts, or may be held as having misled the court and any order will be annulled. The applicant also needs to apply as soon as possible and not leave the issue pending for a long time, or will be considered as having waived such a right unless other circumstances justify the issue of the order. One can apply through an ex parte application or by summons and the court has discretionary power to order the application to be served to the interested opponent so they can be heard too. Under such circumstances both parties will be heard at a very early stage and the court will decide whether it is just to issue the order.

The court does not make findings on the substance of the case, but proceeds to consider the matter based on article 32 of the Courts Law and article 5 of Civil Procedure Law, Cap.6. It is enough to consider the cause of the action.

For the court to decide in favour of the issue of an injunction prohibiting the sale or disposal of an immovable property for the purpose of ensuring the execution of a judgment, there are three requirements: (a) the applicant must prove there is a serious issue to be tried, that is whether he has an arguable case, (b) that there is a possibility that the plaintiff is entitled to a remedy, that is, to demonstrate they could succeed and (c) that unless the interim injunction is issued, it will be difficult or impossible to administer justice at a later stage. Having examined these conditions, the court proceeds to decide whether it is just or convenient to grant the injunction.

According to article 5(2) of Cap.6, such an order is not issued unless it seems that with the sale or transfer of the property to a third person, the plaintiff may be hindered from satisfying the judgment to be issued in his favour. As mentioned in case law, it is not a necessity to give evidence about the defendant’s real intention for alienation or encumbrance. What matters is the potential impact that these would have on the satisfaction of the court judgment that may be issued. If the third condition is cumulatively satisfied and on the basis of testimony the court finds that the balance of probabilities is in the favour of the plaintiff, it examines whether the issuance of the injunction is appropriate in the circumstances.

In a judgment issued by the District Court of Limassol on June 4 concerning a mortgaged property pending sale at auction by a creditor, the court found that the plaintiff was in violation of their duty, since they hadn’t disclosed that property was mortgaged. According to the court, this is an essential fact that differentiates its legal status and, consequently, its real possibilities. The plaintiff actively concealed that the property he was seeking to restrain was mortgaged for the benefit of a third party and presented a false picture. This fact, which also constitutes misleading the Court, resulted annulment of the injunctions issued.

 

George Coucounis is a lawyer practicing in Larnaca and the founder of George Coucounis Llc, Advocates & Legal Consultants, [email protected]

Related Posts

Limassol property sales hit €6.3bn in last 5 years

Kyriacos Nicolaou

Landlord refusing to collect rent

George Coucounis

Are we lucky to live in Cyprus?

Antonis Loizou

Notice of reference by an acquiring authority

George Coucounis

We need to get our act together

Antonis Loizou

Trapped buyers get extension to protection

Elias Hazou