Company litigation study, litigation property preservation damage liability constitutes an analysis of the elements.
Published:
2021-04-07
Article 105 of the the People's Republic of China Civil Procedure Law stipulates that if the application is wrong, the applicant shall compensate the respondent for the losses suffered by the preservation. The Supreme People's Court's "Interpretation on Whether the Parties Should Be Liable for Compensation for Losses Caused by Errors in Property Preservation" further stipulates that if the parties apply for property preservation errors and cause losses to outsiders, they shall be liable for compensation in accordance with the law. The specific constituent elements of liability for property preservation errors are not clearly stipulated in the law and judicial interpretation. In practice, the court generally judges whether the applicant for property preservation bears the corresponding compensation liability according to the constituent elements of civil tort (I. e. the subjective fault of the applicant, the illegality of the injurious act, the result of the damage, and the causal relationship between the result of the damage and the injurious act), but there may be many differences in the court's grasp of the constituent elements. In accordance with the relevant jurisprudence of the Supreme Court in applying for compensation for damages for property preservation in litigation, the following analysis is made on the constituent elements of the application for compensation for damages for property preservation in litigation:
Subjective fault of 1. property preservation applicant
The liability for damages for property preservation in litigation is not a special tort under the special provisions of the law, and it should apply the basic principle of tort liability, that is, the principle of fault liability. Whether the property preservation is wrong cannot be judged simply by winning or losing the case, but by combining the specific circumstances of the case to judge whether the applicant is subjectively wrong. Fault includes both intentional and negligent circumstances, and negligence can be distinguished as gross negligence and general negligence, the application for preservation is an important right of action of the litigants, so only in the case of the applicant's intentional or gross negligence of property preservation, there may be a preservation error.
In the process of property preservation, it should be judged in combination with the facts and evidence of the specific case: first, whether the basic legal relationship of all or the main litigation claims of the applicant is true, whether the main evidence on which the basic legal relationship is based is legal and effective, if the basic legal relationship is not true or the main evidence on which it is based is forged, the applicant is subjectively at fault; second, whether the applicant's claim obviously exceeds the damage result or the amount calculated according to the contract, that is, whether calculated according to tort or contract, the amount claimed obviously exceeds the direct loss or foreseeable loss; third, the claim claimed by the applicant has no practical feasibility or legal litiability, if the applicant knows that the contract can no longer be performed, it is still required to continue to perform the contract.
It is difficult to establish a unified measurement standard for whether the applicant is subjectively wrong. Different parties have different cognitive abilities. Therefore, for the subjective fault of the applicant, the presiding judge should combine the facts identified in this lawsuit and the legal relationship of this lawsuit. Complexity, the subjective judgment ability of the parties and other factors to make a comprehensive judgment.
illegality of 2. acts
The illegality of the act of liability for damages for property preservation in litigation is mainly manifested in two aspects in practice: First, based on the legislative purpose of the property preservation system, the property applied for preservation in property preservation should be equivalent to the claim claimed by the applicant and shall not exceed the scope of its claim. If the amount of the applicant's application for preservation is excessively higher than the scope of the litigation request, it should generally be deemed as an application error. It is worth noting that because real estate and common property are indivisible, applying for preservation of indivisible real estate and common property does not constitute Excessive preservation; second, the property to be preserved should be the property related to this case, in order to ensure the performance of future judgments, if the property preserved belongs to a third party unrelated to the case, the act of preservation is illegal.
Consequences of 3. property preservation damage
The establishment of a tort must be necessary for the occurrence of injurious consequences. The damage caused by property preservation errors varies from subject matter to subject matter, and the following is a list of the losses that may result from the preservation of the most common real estate and bank deposits in preservation practice:
1. Real property
In practice, the more common real estate as the subject matter of preservation is land and real estate, and the seized land and real estate cannot be transferred to the outside world, which may cause certain losses.
(1) Loss of depreciation of land and property
During the seizure period, the land and real estate cannot be transferred. If there is a devaluation loss of the land and house during the seizure period, the respondent needs to prove that a transfer agreement was concluded with a third party before the seizure, and also needs to prove that the transfer was carried out after the seizure to prove that the loss did occur. The difference between the two prices can be used as a loss caused by a preservation error. If the price of the house rises during the seizure period, the respondent cannot claim a depreciation loss even if the preservation is wrong.
(2) Liquidated damages paid for the inability to transfer land and property or financing costs incurred as a result of the inability to transfer land and property
If the applicant has signed a transfer agreement before the land and house are seized, and the breach of contract is agreed, and the land and property cannot be transferred because the land and property are seized, the breach of contract paid is the respondent's loss. At the same time, although no transfer agreement was signed before the preservation, the financing costs arising from the inability to realize the land and property as a result of the preservation act can also be used as a loss to the respondent, although it is difficult to prove in practice.
2. Bank deposits
Bank deposits are the preferred target of preservation, because the implementation of bank deposits is the simplest and easiest procedure, but bank deposits have time value, and bank deposits as the liquidity of enterprises, once frozen, will inevitably affect the operation of enterprises, resulting in losses.
(1) Interest margin on deposits and loans
Frozen bank deposits still continue to generate interest on deposits, but because bank deposits are frozen, can not be used normally, continue to turn around, in judicial practice, the loss of funds occupied is generally calculated according to the bank loan interest rate, so the loss of bank deposits frozen is calculated according to the deposit and loan interest difference.
(2) Liquidated damages caused by the freezing of bank deposits
As mentioned earlier, if the default payment arising from the inability to pay after the bank deposit has been frozen is the respondent's loss, the respondent shall bear the burden of proof in the determination of this loss, and the difficulty of proof is greater.
(3) Late fees arising from the inability to pay tax payments
The freezing of bank deposits may cause the respondent to be unable to pay taxes, and failure to pay taxes will result in late fees, which is a loss to the respondent.
The above only lists the possible losses caused by the preservation of real estate and bank deposits. In practice, the main situations recognized by the general court that cause losses due to the wrong application for property preservation are: applying for property preservation for the respondent's production materials, etc., which affects its normal production work and causes loss of profits; Seizure, seizure, freezing or other methods prescribed by law, restricting the respondent's power of possession, use, income, and disposition, making the respondent unable to perform the contract with others, resulting in losses suffered by the breach of contract; the applicant applied for preservation of the property of an outsider out of malice or gross negligence, Causing losses; due to errors in applying for property preservation, the respondent's goodwill and image suffered losses, etc.
Causal relationship between 4. act and the fact of damage
If the respondent requires the applicant to bear the liability for preservation damages, there must be a causal relationship between the act of preservation and the fact of loss, and the applicant shall not be liable for the damage without causation, even if the application for preservation is wrong.
In practice, the general rules for the determination of causation are as follows: assuming that there is no act of preservation, whether the result of damage occurs: first, if there is no act of preservation, the consequences of damage may still occur, then there is no direct relationship between the act of preservation and the result of damage, and the causal relationship is not established. For example, in practice, the preservation property is damaged or lost during the preservation period. Although it is unknown whether the damage or loss is caused by natural causes or third-party infringement, the respondent cannot prove that the consequence of the damage or loss is caused by the preservation act, so it cannot be determined that there is a causal relationship between the two. In other words, the respondent can claim that the value of the preservation object is depreciated during the preservation period or the loss of financing interest, however, it is not possible to claim the loss of damage to the subject matter of preservation, because the loss is not the damage caused by the act of preservation, and second, if there is no preservation act, the damage will not occur, there is a direct relationship between the preservation act and the result of the damage. In addition, the "general social concept" to judge whether such preservation behavior will usually lead to such damage results. If there is a direct relationship and equivalency between the act of preservation and the result of the damage, a causal relationship can be found to be established. For example, although the applicant has applied for preservation, because the subject matter of the preservation has been mortgaged or pledged, in this case even if the loss is not related to the applicant's preservation act.
To sum up, in the process of litigation, the parties filed an application for property preservation according to the provisions of the Civil Procedure Law, which is the performance of exercising their litigation rights granted by the law. However, due to the parties' legal knowledge, the ability to prove the facts of the case, and the ability to analyze and judge the legal relationship are different, they usually cannot reach the professional level required by judicial decisions, therefore, the parties' judgment of the facts of the litigation and the rights and obligations may not be consistent with the results of the people's court. The duty of care to be exercised by the parties in applying for preservation should not be overly critical. If only the preservation of the applicant's claim is supported as the basis for whether the application for preservation is wrong, it will inevitably hinder the bona fide parties from safeguarding their rights through the litigation preservation procedure in accordance with the law, and affect the function of the litigation preservation system. Therefore, the application for preservation error must be based on the subjective fault of the applicant, the violation of the law, the fact of damage and the causal relationship between the fact of damage and the act of preservation, and it is not appropriate to simply judge whether the application is wrong on the basis of the final outcome of the case.
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