Court grants stay of execution for stricken debtor but requires monthly payments to balance creditor hardship.

[*173] 1976 February. 25

(PIKIS, AG. P.D.C.)

IN THE DISTRICT COURT OF FAMAGUSTA SITTING

AT LARNACA

Andreas G. Tsokkos,

Applicant,

and

Georghios Economides,

Respondent.

(Application No. 7/75).

Debtors Relief (Temporary Provisions) Law, 1975 (Law 9 of 1975) - Forced sale - Stay of

- Scope and implications of the Law - "Stricken debtor" - Meaning - Section 2 of the Law - Even if applicant a stricken debtor stay of execution not automatic - It may be refused depending on the criteria laid down in section

3 of the Law - Applicant a stricken debtor - Respondent has himself suffered from the 1974 events -Stay of execution subject to terms.

Forced sale - Stay of.

E. Samoutas, for the Applicant.

Z. Katsouris, for the Respondent.

JUDGMENT

The following judgment was delivered by:-

PIKIS. AG. P.D.C.: The applicant is a dentist [*174] of Famagusta, now employed as a Government doctor at Larnaca hospital. Before his displacement he ran a surgery of his own at Famagusta and had set up an auxiliary surgery at Frenaros village.

On 7th April, 1975 the applicant had been adjudged to pay to the respondent a sum of £2,460, the value of surgery equipment supplied to him by the judgment creditor. The aforesaid amount carries interest at the rate of 4 per cent per annum.

The applicant prays that execution of this judgment debt be stayed on the ground that he is a stricken debtor in accordance with the provisions of Law 9/75. The application is opposed, on two grounds:-

(a) That applicant is not a stricken debtor within, the meaning of the Law; and

(b) even if the contention of the applicant that he is a stricken debtor is upheld execution should not be stayed for the reason that this would entail greater hardship for the respondent as provided in section 3(d) of Law 9/75.

1. Scope and Implications of the Debtors Relief Law 9/75 A. Scope. Law 9/75 is one of a series of laws that were introduced to alleviate the plight of persons prejudicially affected by the tragic events of 1974. mostly designed to give a breathing space to displaced persons. In particular the object of this law is to relieve debtors stricken by the events of 1974 from the [*175] consequences of forced sale of their properties. It is a species of social legislation and, like every enactment intended to cure a social evil, it must be applied for constant reference to the mischief it is purposed to suppress. The Court is vested with wide powers to enquire into the means and circumstances of the parties for the purpose of making an effective survey of every relevant factor to the exercise of the powers of the Court. It is for this reason that the rules of evidence are relaxed.

B. Implications. The first prerequisite, for the invocation of the provisions of the law is that the debtor should he stricken within the meaning of the law. Section 2 - Law 9/75 - defines a stricken debtor as “any debtor whose work or business has been affected, as a result of the abnormal situation, to such an extent as to render him unable to meet his contractual obligations out of which the debt arose". In accordance with the wording of this definition before a person is classified as a stricken debtor it must be proved -

(a) that his work or business has been prejudicially affected as a result of the abnormal situation created by the Turkish invasion. Such adverse repercussions on his financial position must be the direct consequence of the abnormal situation and then the degree to which the debtor has been stricken must be such as [*176]

(b) to render him unable to meet his contractual obligations out of which the debt arose. What amounts to inability to pay is a matter of fact and degree and in answering the question the Court will have regard to the overall financial situation of the applicant

If the Court is satisfied that the applicant qualifies as a stricken debtor stay of execution is not automatic and may be refused, depending on the criteria laid down in

s. 3 of the Law. Such criteria relate to the value of the property sought to be sold, the market conditions prevailing at the probable date of sale and lastly whether, having regard to the financial circumstances of the judgment creditor, greater hardship will result by ordering stay of execution. The object of the exercise hero is to balance the circumstances of the parties in order to do social justice between them.

2. Facts of the Case

The applicant earns £147 per month. He is single and resides at Sunhall Hotel, Larnaca, where he pays £22 per month for his accommodation; in addition, he has to incur, as he informed us, a daily expense of £1 for his meals. Before the invasion he had just completed setting up his own surgery at Famagusta that he had to abandon with all its contents in the wake of the Turkish invasion. However, this was not the case with his second, minor, surgery at Frenaros that was equipped with what the applicant [*177] described as second hand equipment, valued at £490. Despite the lapse of nearly one year since judgment had been given in this case the applicant paid nothing towards his debt. The applicant told the Court that he made a gift of the surgical appliances of his surgery at Frenaros to a displaced colleague.

Very recently the applicant has acquired a new car that he purchased for £900. For the purpose of meeting the expense of this new acquisition he sold an old car for £450 that he paid towards his debt and contracted a loan for the payment of the balance from the Popular Bank, payable by instalments of £28 per month.

In the submission of counsel for the applicant his client should be treated as a stricken debtor with ability to pay only £10 per month towards his debt, that is an amount that mostly covers interest and leaves a very small sum for the repayment of capital.

The respondent has himself suffered an awful lot on account of the events of 1974 inasmucha as his pharmacy at Nicosia has been occupied by the Turkish forces, losing goods and merchandise to the value of £6,000 to £7,000, that was stored therein at the time of its occupation. His import business of dentist's surgical equipment has likewise been shattered as debts amounting to thousands of pounds, due by displaced dentists who left Cyprus, remain unpaid with no sure prospect of repayment in the future. With the aid of a loan from the National [*178] Bank of Greece for an amount of £4,500, he set up a new pharmacy elsewhere in Nicosia and his net monthly profits, as he informed us, amount to something in the region of £100 to £150. The respondent is a family man who owns a house at Nicosia and is responsible for the maintenance and upkeep of his wife and two sons, one a university student and the other a student of the 5th form of the Gymnasium.

The main reason put forward in support of the contention that the applicant should be ordered to pay no more than £10 per month are the needs of his aged mother and widowed sister. He pays his mother, as we have been told, £15 per month end approximately £35 per month to his sister for her support and that of her two orphaned children. I was rather surprised to hear that he contributes £15 per month for the upkeep of his mother, given that she stays rent-free at Frenaros, that she has no family obligations and that she receives £15 per month from the social insurance fund. Of course the applicant can be generous with his mother; but not at the expense of his creditors. His sister gave evidence in support of the contention that her brother gives her £35 per monthc She was a most evasive witness who, in my judgment lied to the Court. She tried to play down, as I believe, the income from the immovable property left by her husband and she lied about whether her brother changed his car, evidently in the hope of strengthening his case. [*179]

I have given careful consideration to the evidence before me in the light of the legal principles, referred to earlier in this judgment. I am satisfied, on the whole, that the applicant classifies as a stricken debtor, considering the loss he suffered in consequence of the events of 1974. Likewise the respondent has himself suffered from the same events. It has been a difficult task to balance the competing claims to relief claims that are very finely balanced. In the end, I have decided to make an order for stay, subject to the applicant paying £45 per month towards the discharge of his debt until the debt is repaid, or further order. Payment will commence from 1st March, 1976. No order as to costs.

Order for stay of execution

subject to payment of £45.- per month.