Actions for annulment of disposition are filed with the request of cancellation of transactions made by the debtor that harm the creditor’s right to claim. Thanks to this lawsuit, the actions of the debtor can be invalidated against the creditor. In the law, the situations in which the action for the annulment of the savings can be filed against the debtor are specified. In all of these cases, it is not envisaged that the debtor intends to harm his creditor or one of his creditors in order to file an action for annulment of disposition. For example; It is also possible to file an action for annulment of savings for the cancellation of the transactions made by the debtor during the time periods specified in the Law and defined as the doubtful period, while he is in debt. Here, the debtor’s intention to smuggle goods from the creditor and proof of this is not expected from the plaintiff. 280 of the Enforcement and Bankruptcy Law.
In this bulletin, we will focus on the intention to harm the creditors and the proof of this intention in the case, which is usually encountered in the attempts of the debtor to smuggle goods by transferring, donating, or pretending to sell his goods to others.
1. Situations in which the Cancellation of Savings may be requested
The cases in which the actions for annulment of disposition can be filed are generally listed in the Law, and not all of the reasons for annulment are specified one by one. In its decision, the Court of Cassation made the following determinations regarding the cases of annulment of savings and the outcome of the case;
“ The purpose of the lawsuits for annulment of the savings regulated in Article 277 and the following articles of the Execution and Bankruptcy Law is that some of the savings made by the debtor before his attachment or bankruptcy and which are actually valid are invalid or inconclusive against the creditor due to “contrary to the rules of goodwill”, and therefore, you will receive the forced execution on that property . to provide education.
If the action for annulment is fixed, the claimant acquires the authority to obtain his right through forcible enforcement on the property subject to disposition, and if the subject of disposition is immovable property, the defendant may request the sequestration and sale of that immovable without the need for correction of the record on the third party. ). For this legal reason, the action for annulment is a lawsuit arising from the law of a proportional nature, which provides the creditor with the opportunity to collect his receivables; It is not related to the same goods subject to disposition.
The debtor’s dispositions subject to annulment before his insolvency or bankruptcy are regulated under three groups and in Articles 278, 279 and 280 of the İİK. However, all the savings that can be canceled in these articles are not counted as limited. The law makes a general definition for some dispositions subject to annulment and leaves the determination of which dispositions are subject to annulment to the discretion of the judge (İİK.art.281). For this legal reason, even if the plaintiff relied on one of the articles 278, 279 and 280 of the İİK. In general, it can be said that the debtor’s savings that can be canceled are the gratuitous or incapacitated savings made with the intention of harming his creditors. ”[one]
2. Conditions for Cancellation of Transactions Made with the Purpose of Harming Creditors in Actions for Cancellation of Disposition
According to Article 280 of the Execution and Bankruptcy Law, transactions made by a debtor whose assets are not sufficient for his debts, acting with the intention of causing damage to the creditors or one of them, are cancelable. In order for annulment to be achieved, certain conditions must exist and these must be demonstrated in the case.
Pursuant to Article 280 of the Enforcement and Bankruptcy Law, the existence of the following conditions is required in order for a savings made by the debtor to be canceled with an action for annulment of savings;
- The enforcement proceedings against the debtor must have been fruitless,
- The debtor’s assets should not be enough for his debts, his liabilities should be more than his assets,
- The transaction must have been made within the time period defined as the “suspicious period” in the Law,
- The debtor must have the intention to harm the creditors or one of them,
- The third party, with whom the debtor is dealing, should know or be able to accept that he/she has acted with the intention of harming the debtor’s economic situation and the creditors.
3. Burden of Proof in Actions for Cancellation of Disposition
The burden of proof in cancellation of disposition cases is on the plaintiff creditor. In this case, the creditor is obliged to prove that the above-mentioned conditions are fulfilled. As a matter of fact, the conclusion reached within the framework of the general proof rules is in this direction, since it is the party that will be entitled to the annulment of the disposition in its own favor.
Due to the difficulty of proving due to the nature of the case, various proof facilities have been given to the plaintiff creditor, specific to the cancellation reasons for which the intent of the debtor is sought. These; These are the presumptions that are accepted in the Law and are in favor of the plaintiff creditor, with the approximate proof being accepted as sufficient based on the indications. It is accepted as a sufficient level of proof in terms of annulment of the transaction that the plaintiff proves his claims directly or approximately based on the signs or the plaintiff’s proving the fact that is the basis of the presumption. If the plaintiff proves the basis of the presumption, this time the debtor must try to refute this presumption. However, it should be said that the creditor is in a more advantageous position in this case in terms of proof.
If the plaintiff creditor filed an action for annulment of disposition in order to cancel the actions of the debtor with the intention of harming himself, he must prove the following matters in particular in this case. These;
- Proof that the debtor acted with the intent to harm the creditor,
- Proof that the person transacting with the debtor knows or should know the financial situation of the debtor and the intention to harm the creditor in the transactions made.
Below are explanations on how the proof activity should be done in both cases.
4. Proof of Debtor’s Intention to Damage
The reason for the cancellation of the savings in article 280 of the EBL covers the actions taken by the debtor with the intention of harming his creditors. What must be understood by the intent to harm the creditors here is that the debtor acts with the will to smuggle property. If the debtor aims to prevent the creditor from obtaining his receivables in his transactions, the intent of the debtor to harm the creditor can be mentioned here.
The debtor’s intent to cause harm is not an easy situation to prove. Because caste is the purpose, intention and thought of a person in his inner world. This can be difficult to detect from the outside. Since no one can read anyone’s mind, the events and facts occurring in the outside world must be taken into account in the judge’s reaching an opinion on this matter.
In the face of the difficulty of proving the intent to harm, the legislator provided some conveniences to the plaintiff creditor. Accordingly, in two separate cases, it was seen as a presumption that the debtor acted with the intention of harming the creditor. One of these two situations is when the party dealing with the debtor is someone from his family. The second situation is the transfer of the commercial enterprise. If we examine these two situations and their conditions separately;
4.1. If the Debtor is a Family Member of the Person With whom the Transaction is made
If the debtor has made the savings that is requested to be canceled with his/her spouse, sibling, parents, children, grandchildren or up to the third degree (uncle, uncle, aunt, aunt and sibling/niece) or in-laws (relatives of the same degree of the spouse), this savings is for the purpose of kidnapping. is considered to be intended. The purpose here is to protect the goods from foreclosure by the creditor and sale by enforcement. Because, as it is known, only the goods in the debtor’s assets can be seized for the debtor’s debt. It is not possible to impose a lien on the debtor’s debt on property belonging to others.
There is a clear provision in the law regarding the cancellation of the transfers made by the debtor to which persons. Therefore, on the basis of this presumption, it is sufficient for the plaintiff creditor to reveal the kinship relationship between the debtor and the counter party dealing with him. In addition, the debtor does not need to prove the purpose of kidnapping. Here, it is up to the defendant to prove that the transaction does not aim to smuggle goods.
It is not accepted that there is a direct aim of smuggling in transactions with friends or other relatives other than relatives listed in the law. Here, the phenomenon of abduction needs proof. If transactions are made between people who have an affinity other than kinship, such as business partners or close friends, for the purpose of smuggling, this connection alone is not sufficient to prove the intent to harm. Some indications are also needed here, such as the closeness of the parties to the transaction, their long-standing friendship, business partnership and, therefore, a relationship of trust. In the Supreme Court decisions, such connections between the debtor and the third party are called organic bonds. For example, organic bond in terms of legal entities; the defendant companies are under the same group roof, the company partners are related to each other, It can be revealed in the form of a legal or de facto connection between companies in terms of field of activity or address. Again, situations where the debtor transfers his immovable property to the company of which he is the controlling shareholder or the debtor company transfers its goods to a shell company with which they have an organic bond are among the common examples in practice.
In summary, in order for the transactions made outside the relatives listed in the Law to be canceled with the action for the annulment of the savings, the organic link between the debtor and the third person making the transaction with the debtor must be revealed. Below is a summary of a Supreme Court decision on the subject;
“… it cannot be proved that the defendants’ property was disposed of with the aim of harming the malicious creditors, and that the goods subject to the case were compensated and the defendants’ Even though it was decided to reject the case because it could not be proven that he made savings with the will to harm the creditors, that is, the conditions specified in Article 280 of the 2004 SY were not present, and moreover, the plaintiff’s attorney did not present a temporary or final insolvency document regarding the defendant debtor, but the conclusion reached was the scope of the file and the available evidence. situation… In case of existence of pre-conditions, it should be investigated whether there are cancellation conditions written in Articles 278, 279 and 280 of the EBL. In particular, in Article 278 of the EBL, the court should examine whether there is a difference between the charges, as the debtor accepts a very low price as an imposition according to the value of what he has given at the time of the contract, and the savings that are subject to annulment as a pardon in the law must be cancelled. The degree of kinship listed in the same article, etc. should be investigated. Likewise, in the article 280 of the İİK, it is regulated that all transactions made by a debtor whose assets are not sufficient for his debts, with the intention of harming his creditors, the financial situation of the debtor and the intention to harm are known by the other party of the transaction or in cases where there are clear signs that require it to be known, the savings will be canceled. intent should be investigated. On the other hand, the reasons for cancellation are also listed in article 279 of the İİK. Pursuant to Article 282 of the EBL, annulment actions are brought against the debtor and the persons who have had legal action with the debtor or who have been paid by the debtor, and their heirs. Moreover, An action for annulment can also be filed against malicious third parties. An annulment decision can be made for those who acquire goods not directly from the debtor, but from the person sold by the debtor; only possible if they are proven to be malicious. The purpose of bad faith is that the situation of the debtor is known or can be known by the buyer. The burden of proving bad faith falls on the plaintiff creditor. In case the bad faith cannot be proven, the case will be filed with the 283/2 of the EBL. becomes a price according to the article. The burden of proving bad faith falls on the plaintiff creditor. In case the bad faith cannot be proven, the case will be filed with the 283/2 of the EBL. becomes a price according to the article. The burden of proving bad faith falls on the plaintiff creditor. In case the bad faith cannot be proven, the case will be filed with the 283/2 of the EBL. becomes a price according to the article.
According to Article 283/II of the EBL, if the action for annulment concerns the value that replaces the goods disposed of by the third party, the third party must be sentenced to compensation in cash (not more than the claimant’s receivable) in proportion to these values. In this case, the amount for which the third party is responsible is the actual value of the disposed property at that time. In other words, if the case and the person holding the dispositioned property cannot be proven to be in bad faith, the case will not be rejected completely, and the debtor and the dispossessed person should be sentenced to compensation in proportion to the actual value of the dispossessed property and limited to the amount of the receivable. In this case, the court should investigate whether the defendants and the debtor deceased have any affinity such as friendship, kinship, commercial relationship, business partnership,[2]
4.2. Transfer of Commercial Entity or Commodity in the Workplace
The legislator interprets the debtor’s transfer of his commercial enterprise or all or a significant part of the commercial goods in the workplace to third parties, even though he is in debt, as an intention to harm the creditor. Since it is accepted by the law that the debtor acts to the detriment of the creditor, there is no need to prove this fact. The plaintiff creditor can only win the case by proving that the debtor has transferred all or a significant part of the commercial enterprise or the commercial commodity in the workplace.
5. Proof that the Third Person Transacting with the Borrower Knows or Should Know the Financial Status of the Borrower and Intention to Damage the Creditor
In order for the plaintiff creditor to win the action for annulment of disposition, he must prove not only that the debtor acted with the intention of harming himself, but also that the person who made the transaction with the debtor was aware of this. Here, the subject of the plaintiff’s proof is two separate issues. First, it is necessary to prove that the person transacting with the debtor has knowledge of the debtor’s financial situation, that is, that he is in debt. The second subject of proof is the proof that the third party knows that the debtor has done the transaction with the aim of harming the creditor. The plaintiff must prove both points.
Here, the proof that the third person knows the situation and intent of the debtor can be proved by the signs reflected to the outside world. For example, the fact that the debtor and the third person live in a small settlement or operate in the same sector are strong indications that they are aware of each other’s financial situation. Again, in cases where the debtor and the third party are in relations such as close friends, neighbors, business partnerships, it may be possible to form an opinion in the court that information is available on the financial situation.
One of the arguments used to prove that the third party, who is the opposite party of the transaction, knows the financial situation of the debtor and his intention to cause harm, is that the transaction is contrary to the ordinary course of life. For example, in cases where the goods are sold for a price far below the real value, donations are made without a valid and reasonable reason, and the debtor makes an extraordinary payment, it is accepted that a transaction is made against the ordinary course of life.
In addition, if it can be convincingly demonstrated before the court that the third party has initiated a large number of enforcement proceedings against the debtor, that a lien has been imposed at his workplace or home, that the debtor knows or has clear indications of the status of his business relations, the plaintiff creditor will be able to determine the third party’s intent to cause harm in the transaction and The debtor can be deemed to have proven that he knows his financial situation.
6. Sufficient Approximate Proof
It is tried to prove the intentions and purposes of the parties involved in the action for the annulment of disposition, which is not an easy task. Considering the difficulty of the proof, some presumptions were accepted in favor of the plaintiff, and a proof that the plaintiff would make at the approximate level of proof based on some signs was considered sufficient. To put it more clearly, the plaintiff creditor does not have to fully prove that the debtor and the third party have done the action in order to harm himself, to fail to pay his right to receivable, or to smuggle goods. It will be sufficient for the plaintiff to show the accuracy of these claims as highly probable, based on various indicators, to win the case.
Conclusion
Actions for annulment of savings are lawsuits with their own specific conditions and consequences. At the forefront of these unique conditions is the rules of proof in the case. The subject of proof in the cancellation of savings cases is a technical issue. Winning or losing the case is possible by understanding the rules of proof correctly and applying them properly. The above-mentioned explanations are of a general nature and to give an idea, and the subject to be proved and the form of proof will vary for each concrete case. Expert legal support is extremely important in order to prevent possible loss of rights and increase the chances of success in the case.
You can ask for help from our team for more detailed information and consultancy on the subject.
Regards.
Solmaz Law and Consultancy Team.
References
Güray Erdönmez, (2017), Cancellation of Savings Made with the Intention of Harming Creditors , Onikilevha Publications, Istanbul, p. 159-189.
İdil Tuncer Kazancı, (2015), Proof in Actions for Cancellation of Disposition , Yetkin Publishing, Ankara, pp.168-186.
17th Civil Chamber of the Supreme Court, 2016/8097 E., 2019/4909 K.
17th Civil Chamber of the Supreme Court, 2015/4819 E., 2017/10158 K .
[1] 17th Civil Chamber of the Supreme Court, 2016/8097 E., 2019/4909 K.
[2] 17th Civil Chamber of the Supreme Court, 2015/4819 E., 2017/10158 K .
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