Compulsory Registration of Property Rights in the Name of the Non-Debtor Owner by the Creditor’s Legally Binding Decision According to Georgian Legislation (Obligation to Register Real Estate - Review of a Specific Court Decision)

Abstract

The enforcement of a legally valid court decision is the right of the person who has restored his violated right through the court, and the enforcement of this right by the interested person (creditor) through coercion (registration of the property right in the public register) also requires a new court decision. Court proceedings and judicial practice have long known the legal interest of the party and the claim of appropriation based on this interest, at which time the interested party applies to the court with the request for forced registration of the defendant as the owner of the item, and this happens in the case when the person (the true debtor) avoids registering his ownership right with the Civil Registry Office in the National Public Registry Agency. Employees of administrative authorities often do not investigate certain circumstances in administrative proceedings, which in themselves violate the rights of individual persons, and this leads to provoking disputes in Georgian courts, which are sometimes fairly or sometimes unfairly carried out against the circle of persons whose constitutionally recognized rights have been violated. The purpose of this article is to develop critical thinking in the reader based on a specific court decision so that he or she can conduct a broad analysis of the content of the court’s decision that has entered into legal force and the features of its execution.

Keywords: Non-debtor owner, Creditor, Public Registry.

Introduction

N.P. filed a civil lawsuit in the Tbilisi City Court. The subject of the dispute was recognition as the owner of the immovable object, invalidation of the mortgage agreement, and cancellation of the enforcement document by the notary. The lawsuit was based on the criminal verdict according to which the following circumstances were established: J.B. using a fake power of attorney in the National Public Registry Agency, N.P., self-registration of the owned immovable object and then loading it with the right of a mortgage in favor of the creditor.[1]

After the end of the dispute, N.P.’s right of ownership was restored to the disputed real estate, however, based on the fact that Articles 312 and 185 of the Civil Code of Georgia serve to protect the interests of the bona fide purchaser, N.P.’s right of mortgage remained on the property in favor of the creditor.[2]

Based on the fact that N.P. was not a real debtor and the loss of his property rights resulted from an illegal decision of the public registry, N.P. filed an administrative lawsuit in the Administrative Affairs Board of the Tbilisi City Court, with a request to impose material damages against the defendant - administrative body.[3]

1. Administrative Claim Against the LEPL National Agency of Public Registry for the Imposition of Compensation for Damages

During the dispute between N.P. and the National Agency of Public Registry, the creditor applied to the National Public Registry Agency and demanded the enforcement of the claim settled by N.P. in the civil dispute. As we mentioned in the introductory part, the lawsuit of N.P. was partially satisfied, namely in the part of the owner’s certificate, although N.P. did not register this right in the public registry agency. The creditor indicated in his statement that his legal interest was the sale of the mortgaged real estate,[4] although based on the fact that N.P.’s mortgaged immovable property was not registered, for this reason, the enforcement proceedings could not continue, which hindered the enforcement process. The creditor submitted a legally binding decision to the public register, according to one of the clauses of which N.P. was known as the owner, however, as you know, the creditor did not have a writ of execution and was not authorized to execute such a decision for one simple reason: N.P.’s claim related to recognition of the real estate as its owner, the creditor was not a party in this dispute.

2. Review of the Court Decision related to the Forced Execution of the Decision that Entered into Legal Force by the LEPL National Agency of Public Registry

The National Agency of the Public Register, without considering N.P.’s legal interest, against his will, registered the right of ownership and issued the relevant extract. After that, the enforcement proceedings were resumed. N.P. filed an administrative lawsuit in the Tbilisi City Court and demanded the annulment of the individual administrative-legal act, according to which the property right was registered in his name without showing his will. The lawsuit was based on several circumstances, namely:

The first and second parts of Article 95[5] of the General Administrative Code of Georgia - “Participation of interested parties in administrative proceedings”:

1. The administrative body has the right to involve the interested party in the administrative proceedings based on his request, and in the case defined by the law, he is obliged to ensure his participation in the administrative proceedings.


2. The administrative body is obliged to inform the interested party about the initiation of administrative proceedings if an individual administrative-legal act may worsen his legal situation and to ensure his participation in the administrative proceedings.

In the case under consideration, it is established that the creditor applied to the National Agency of Public Registry and requested N.P.’s registration as the owner; the administrative body started administrative proceedings based on this application. It is obvious and indisputable that according to Article 95 of the General Administrative Code of Georgia, the most accountable person in this administrative proceeding - N.P. was invited to the discussion. It should have been, however, that the National Agency of Public Registry violated the norms of the above-mentioned article and decided compulsory, without N.P.’s participation.

The first and second parts of Article 96[6] of the General Administrative Code of Georgia - “Investigation of the circumstances of the case”:

1. During the administrative proceedings, the administrative body is obliged to investigate all the circumstances that are important for the case and to decide based on the evaluation and mutual reconciliation of these circumstances.


2. It is not allowed to base the issuance of an individual administrative-legal act on a circumstance or fact that has not been investigated by the administrative body in accordance with the law.

Based on the above, it is unequivocally confirmed that during the lawsuit proceedings, the creditor was not a party to the claim for the restoration of ownership rights. Based on the above, the legally binding decision of the Tbilisi City Court and the writ of execution were not issued to the creditor. The party interested in the execution of the said request is N.P., based on whose request a legally binding decision and an enforcement document will be issued. It is N.P. The person who, based on the existing legal situation, has the right to demand the execution of a legally effective decision within the time specified by the legislation and by coercion between them.

3. Judicial Practice

Georgian litigation and court practice have long known the legal interest of the party and the claim based on this interest (attribution), where the interested party applies to the court with the request to register the defendant as the forced owner of the item. To substantiate this reasoning, we will refer to the practice of the Supreme Court of Georgia,[7] Case N As-1154-1299-08 (subject of clarification): Obligation to register property rights in the public register. The mentioned decision is a clear example of how the creditor should act to register the N.P.’s defective real estate. The creditor is obliged to file a claim in the Tbilisi City Court and justify his legal interest in the Registration of the real estate in his name.

4. Substantiation of the Decision of the Administrative Court

The court of first instance did not satisfy N.P.’s administrative lawsuit, and the aforementioned was substantiated by the fact that the civil decision submitted for registration was legally binding, and the legally binding decision is binding on the entire territory of the country, and it must be enforced, although the panel ignored the fact that the legally binding decision was submitted by an unauthorized person, who, as already mentioned above, did not represent a party in that civil dispute.[8]

5. Enforcement Writ and the Essence of the Attributive Claim

Given that in this article, we are talking about the registration of property rights, it is necessary to correctly explain the essence of the writ of execution and its need at the stage of registration. Immediately after the legally effective decision in favor of the plaintiff, the person can receive a copy of the same decision certified with a seal and an enforcement sheet, which is the resolution part of the same decision, in which it is unequivocally indicated in what part the person’s claim requirements were satisfied. By submitting the two above-mentioned documents, and based on the relevant application, the National Agency of the Public Registry, starts administrative proceedings, after which it approves or rejects the application of the person. It should be noted that if the claimant has recovered his damaged property right by the force of the court, the enforcement of this decision is only the right of the claimant and not of any other third party. If the third “interested person” believes that his right is violated by the non-enforcement of the legally effective decision (the enforcement process is suspended, and he cannot meet his requirements), then he must request the assignment of the ownership right to the non-debtor owner with an independent lawsuit to indicate his legal interest as well. The attributed lawsuit is also called an enforcement lawsuit,[9] since the court decision issued in connection with it is the basis for issuing a writ of execution and can be enforced if the defendant does not voluntarily fulfill the obligations imposed on him by the court. For example, the debtor has a debt to a creditor that he does not pay, the debtor inherits real estate, which he does not register because he believes that the creditor will make it enforceable as soon as it becomes a civil turnover. If the creditor finds out about the existence of the inheritance certificate, does the creditor have the right to bypass the court and register the inheritance property in the name of the debtor by applying the registration authority? In this case, the creditor is obliged to file a claim in court and demand the obligation to register the right of ownership and to indicate the existence of his overdue claims against the debtor as a legal interest was not a personal debtor of the creditor, and that is why the court had to judge whether the National Agency of the Public Registry of Public Registry had the right to carry out this type of registration, especially at a time when the National Agency of Public Registry represented the defendant in a dispute over compensation for damages initiated by N.P.

Conclusion

In conclusion, I would like to mention that the National Agency of Public Registry of Georgia under the Ministry of Justice of Georgia cannot fulfill the fundamental tasks assigned to it. The Ministry of Justice of Georgia is the guarantee of legal security in our state; it is obliged to correctly reflect the rights recognized by the constitution in its actions, which is a necessary condition in a democratic state. There are positive signs in the Georgian judicial system in this regard since individual judges appointed to the Chamber of Administrative Affairs are very carefully and thoughtfully considering administrative disputes, which is welcomed.

Bibliography

Research and Textbooks:

1. Nachkebia, A. (2000-2013). Definitions of civil legal norms in the practice of the Supreme Court (Case N As-1154-1299-08, Vol., p. 111).


2. Kurdadze, Sh., Khunashvili, N. (2015). Civil Procedural Law of Georgia, Second Completed and Revised Edition, “Meridian” Publishing House, p. 355.

Normative Material:

1. General Administrative Code of Georgia.

Court Decisions:

1. Tbilisi City Court. (2017, May 31). Judgment on the criminal case, N 1/630-17.


2. Tbilisi Court of Appeal, Civil Affairs Chamber. (2019, April 15). Decision, N 2b/298-18.


3. Tbilisi City Court, Administrative Affairs Board. (2021, September 21). Decision, N 3/4312-20.


4. Tbilisi City Court, Civil Affairs Board. (2017, November 30). Decision, N 2/15811-17.

Footnotes

[1] Tbilisi City Court. (2017, May 31). Judgment on the criminal case, N 1/630-17.

[2] Tbilisi Court of Appeal, Civil Affairs Chamber. (2019, April 15). Decision, N 2b/298-18.

[3] Tbilisi City Court, Administrative Affairs Board. (2021, September 21). Decision, N 3/4312-20.

[4] Tbilisi City Court, Civil Affairs Board. (2017, November 30). Decision, N 2/15811-17.

[5] Article 95 of the General Administrative Code of Georgia.

[6] Ibid., Article 96.

[7] Nachkebia, A. (2000-2013). Definitions of civil legal norms in the practice of the Supreme Court (Case N As-1154-1299-08, Vol., p. 111).

[8] Administrative Affairs Board of the Tbilisi City Court. (2023, March 2). Decision No. 3/6202-21.

[9] Kurdadze, Sh., Khunashvili, N. (2015). Civil Procedural Law of Georgia, Second Completed and Revised Edition, “Meridian” Publishing House, p. 355.